Which major health policy issue should the next President and Congress tackle first: addressing Medicare’s long-term financial challenges or reforming the U.S. health care system?

Both.

The same forces that are driving up Medicare spending — increases in the cost and use of medical services — are also driving up spending by private health plans. For several decades, increases in Medicare costs per beneficiary have mirrored the increases in costs in the health system as a whole.

Therefore, trying to close Medicare’s long-term financing gap through changes in Medicare alone, such as by reducing benefits or limiting eligibility, would merely shift costs to the vulnerable elderly and disabled Americans who rely on Medicare for access to health care.

Medicare, however, can serve as a model for efforts to slow cost growth in the rest of the health care system. MedPAC, Congress’s expert advisory body on Medicare, has recommended a number of steps to slow Medicare costs by promoting efficiency, rewarding quality, and eliminating excessive payments to providers and private plans.

These recommendations deserve Congress’s serious consideration. While they won’t solve Medicare’s financing problems by themselves, they will strengthen the program financially — while also demonstrating the potential payoff of similar reforms in the rest of the health care system.

This entry was posted on Monday, August 4th, 2008 at 2:42 pm and is filed under Politics, Healthcare .