Critical Issues In U.S. Health Reform by Eli Ginzberg

Author:Eli Ginzberg [Ginzberg, Eli]
Language: eng
Format: epub
ISBN: 9780367016876
Barnesnoble:
Publisher: Taylor & Francis
Published: 2019-06-17T00:00:00+00:00

Positive Lessons from Medicare

Over the last 27 years, Medicare has had a considerable record of success that offers some positive lessons for those who would reform the health care system. While the Clinton Administration's proposal consciously takes an approach quite different from Medicare, many others have incorporated pieces of the program into their proposals, particularly the benefit package and some of the cost-containment mechanisms.

One of the most important lessons of Medicare is that government programs can be viewed favorably by the population they serve and by the public-at-large. In general, Medicare is well liked by its beneficiaries and has significantly enhanced their economic well-being and access to mainstream health care. Medicare is consistently rated as one of the most valued government programs, its benefits are clear and highly visible, and it is supported by a dedicated revenue source that constitutes a popular means of financing. Despite the Clinton Administration's skepticism about a publicly funded "single-payer" system, Medicare demonstrates that such a program can operate successfully in the United States.

Medicare's innovations include new payment mechanisms for providers, and while hospital administrators and physicians have grumbled about the changes, they have generally adjusted quickly to these new incentives. As a result, Medicare has been relatively successful in holding down costs, particularly those of hospital services in the late 1980s. The prospective payment system for hospitals has been widely accepted as an improvement over the old cost-based method, it changed the basic incentives which guided hospitals and made them more conscious of ways to improve efficiency. In addition, the new Medicare fee schedule for physicians, while controversial, is likely to become a standard for physician payment.5

These two reform efforts, particularly hospital reform, reflected major changes in the way payments were made and required new accounting systems and behavioral responses to the new incentive structures. While not all the responses were positive, the delivery of health care did change rapidly. For example, the average number of days in a hospital stay dropped dramatically when hospitals were paid on a per case rather than per diem basis.6 While a study of the response to these hospital reforms uncovered some problems, particularly regarding patient stability upon discharge, it concluded that quality was not seriously compromised.7 Overall, these transitions suggest that the health care system can respond to change without experiencing significant disruption of services or quality of care.

Figure 9.1 : Ratio of Per Capita Medicare Benefits to Per Capita Spending on Health Source: U.S. Congress, Committee on Ways and Means, 1993 Green Book: Overview of Entitlement Programs (Washington D.C., USGPO, July 7, 1993).

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