Hey, Super-committee: here’s how to fix Medicare

When it comes to the so-called “super-committee” on Capitol Hill, it’s probably best to keep expectations low. Participants are reportedly trying to identify some kind of debt-reduction compromise, though the odds are against it.

If, however, the panel is going to strike some sort of deal, it seems likely lawmakers will look for significant cuts to Medicare. In a new piece in the print edition of the Washington Monthly, Philip Longman makes the case that the super-committee is looking at this all wrong. The editors’ summary of the story helps set the stage for an interesting piece:

While the partisan gap in Washington is wider than it’s been at any time in living memory, the two parties do have one remarkable agenda in common. Both have proposed cuts in Medicare so drastic that they would have been politically suicidal a decade ago — and may still be. Yet neither party is backing down.

We can be thankful that both sides are sane enough to recognize that the rising cost of healthcare, especially for Medicare, is what’s really driving long term deficits. But here’s the bad news: neither party has a clue how to substantially control costs without wrecking the institution of health care for seniors.

In an important essay in the November/December issue of the Washington Monthly, Phillip Longman tells Congress exactly what it needs to do to save billions and make seniors healthier: announce a day certain and near when Medicare will be out of the business of subsidizing profit-driven, fee-for-service medicine.

Instead, Longman argues, Medicare should contract exclusively with health care providers like the Mayo Clinic, Kaiser Permanente, the Cleveland Clinic, or even the Veterans Health Administration — non-profit, managed care organizations that are renowned for both the high quality and the cost-effectiveness of their work. This track record is no accident: because doctors working at these institutions are not compensated on a fee-for-service basis, they are neither rewarded for performing unnecessary tests and surgeries nor penalized for keeping their patients well.

Industry resistance to such a plan would no doubt be fierce, and seniors are bound to resist changes to the status quo. But Longman’s solution would be far more palatable to older Americans than the Republicans’ proposed system of Medicare vouchers, which simply pass rising health care costs onto seniors, and the notion, suggested by deficit hawks in both parties, of raising the Medicare retirement age to 67. Moreover, unlike these other solutions, it would have the advantage of actually working to control the biggest single driver of federal spending and, at the same time, give Americans better health care in the bargain.

Read Longman’s story “The Cure.”