WASHINGTON -- As the dust continues to settle after Tuesday's election and policy wonks debate what it means for the future of healthcare, an increasing number of experts say Medicare will be the subject of likely reforms in the near future.
In post-election Washington, lawmakers and the president face what is commonly called the "fiscal cliff" -- a series of expiring tax breaks, needed federal spending bills, and a periodic increase in the nation's debt ceiling all coming together at once. Congress and the president must agree on how to lower the country's deficit through spending cuts and tax increases or face across-the-board spending cuts, including an automatic 2% cut in Medicare physician payments.
"I don't think there's any question that entitlement reform will be a part of whatever new agreement is reached," former Senate Majority Leader Tom Daschle (D-S.D.) said at an event here Thursday sponsored by the Institute for Healthcare Improvement. "I do think cost containment for Medicare and Medicaid will be a very important part of the discussion."
Daschle mentioned changes to cost-of-living adjustments for beneficiaries and a means test for Medicare as possible cost-containment initiatives. Others have mentioned raising the Medicare eligibility age to 67 as an option.
Another former Senate Majority Leader, Bill Frist, MD (R-Tenn.) -- who now works with Daschle at the Bipartisan Policy Center -- said at the event that entitlement programs are certainly on the chopping block. He predicted lawmakers will likely agree to $2.50 in spending cuts for every $1 in new revenue to slow the nation's growing debt.
That also means federal agencies -- including the CDC, FDA, and National Institutes of Health -- will all be forced to trim spending. "Unfortunately, I don't think there's any question that discretionary accounts are all going to be adversely effected," Daschle said. "That's a given."
He added that could come in the form of a 10% cut in spending for the Department of Health and Human Services and its agencies.
Those are topics to come early next year after the new Congress comes to Washington. In the short term, lawmakers must deal with the sustainable growth rate (SGR) reimbursement formula or else physicians face a 27% cut in payments starting Jan. 1. Most agree Congress will provide another customary 1-year fix, but larger reforms for the SGR down the road also are likely, the former senators said.
Frist and Daschle agreed that radical reforms to Medicare and Medicare are not likely with Obama in the White House. Republican-backed proposals of moving Medicare to some sort of defined contribution system, such as a premium-support model, are on hold.
"I'm going to tuck it away in my pocket because 4 years later I'll come back and talk about it," Frist said. "But it's kind of been taken off the table now for a period of time."
There is no shortage of cost-saving reform ideas for Medicare when and if Washington policymakers want to tackle them. Some of those ideas were laid out Thursday in a post-election webinar hosted by the Association for Health Care Journalists. They include:
- Further changes to Medicare's fee-for-service payment system, such as bundled payments and accountable care organizations
- Combining Parts A and B and stripping links between traditional Medicare and Medicare Advantage
- Creating a surcharge on people with Medigap and other forms of supplemental insurance
- Creating limits payments on what Medicare will pay for
- Allow providers to charge patients more out-of-pocket for certain services
"In the end, Medicare will have to operate under some sort of cap," Joseph Antos, healthcare and retirement scholar at the American Enterprise Institute, said during the webinar. That was the point of the Republican push for premium support during the presidential election, and also is a focus of the Affordable Care Act's (ACA) Independent Payment Advisory Board.
With the ACA now safe from its final challenge now that President Obama has won reelection and the law is considered non-repealable, providers and policymakers can turn to further implementation and future cost-control efforts.
"I think there's a lot to be debated," John Rother, president and chief executive of the National Coalition on Health Care said during the webinar. "Hang onto your hats."