Five reasons why Medicare has an unjust funding system

1. Historical Differences in the way Health Care is delivered and reimbursed across the country

2. Medicare population density

3. Greed

4. Politics

5. Seniors Self-Interest

1- Historical Differences in the way Health Care is delivered across the country

            There are substantial differences in the way heath care is delivered and reimbursed across the country. Reasons for this include:

      Is their a tradition of practicing coordinated conservative health care

      If their is a mature managed care market

      An oversupply of providers produces more intense care in other parts of the Country

Dr John Wennberg – Director of Center for Evaluative Clinical Sciences at Dartmouth Medical School

            Has pointed out that “Geography is destiny”

“The reality of health care in the United States is that geography is destiny.  The amount of care consumed by Americans depends more on where they live - the local supply of resources and prevailing practice style- than on their needs or preferences”  - The Dartmouth Atlas
Geographic Variations in Health Care across the country have shown that:
      Variations are totally unrelated to illness
      Underutilization of effective care
      Misuse of Surgical Care
      Increase Medicare Fund = Increase Intensity of Care
      More isn’t better

Geographic Variations in Health Care across the country have shown that:                            

The National Academy of Science concluded in its National Roundtable of Health Care Quality that:

“Serious and widespread quality problems exist throughout American Medicine. These problems may be classified as underuse, overuse and misuse, occur in small and large communities alike, in all parts of the country and with approximately equal frequency in managed care and fee-for-service systems of care.”

The Roundtable estimated that very large numbers of Americans are harmed as a direct result of poor quality care: “Millions of Americans are not reached by proven effective interventions that can save lives and prevent disability.  Perhaps an equal number suffer needlessly because they are exposed to the harms of unnecessary services.”

Lessons to be Learned – Minneapolis and Miami

Medicare statistically pays out about one third of a beneficiaries lifetime benefits during the last six months of a person’s life.  So differences in costs during this time can have a profound impact on Medicare’s finances. For the year’s 1995 and 1996 The Center for Evaluative Clinical Sciences at the Dartmouth Medical School under the direction of Dr. John Wennberg studied Medicare expenditures during the last six months of lives for beneficiaries in Minneapolis, Minnesota and Miami, Florida.

The Center found the cost of that care to Medicare is almost 250% more in Miami than in Minneapolis.  Yet indications are that the “quality of care” is as good or better in the Twin-Cities than in Miami.

Specifically, during the last six months of life:

• Primary care visits in Miami were 226% higher than the Twin Cities.
• Medical Specialist visits were 655% higher in Miami then Minneapolis.
• The numbers of people in Miami seeing 10 or more MDs were 399% higher
• The number of ICU (Intensive Care Units) visits was 216% higher in Miami.
• Major surgery was performed slightly more often in Minneapolis and Miami actually performed slightly more mammographies than the Twin Cities.

Focus: The Sun City Choice – More on health Care and the end of Life

The NewsHour with Jim Lehrer, on September 10, 1999, looked at the high cost of medical care near the end of life. Susan Dentzer of the NewsHour health care unit, a partnership with the Henry J. Kaiser Foundation, visited Sun City, Arizona to prepared this report. 
To view a video of this report click here. (http://www.dartmouthatlas.org/multimedia/newshour.php)

2 - Medicare population density

For-profit HMOs have deliberately located in high population density areas across the county where there is also high Medicare Reimbursement. This obviously does NOT include Minnesota; here HMOs are required to be not-for-profit by law. However with the implementation of the Medicare Modernization Act this may change in Minnesota.

Even though 30 states are being penalized by this system, the remaining 20 are where the highest population lives - hence the majority votes in the US House of Representatives are in high cost reimbursed states.

3.  Greed

·        For-Profit HMOs and insurance companies (such as  Columbia, Humana, Aetna, and United Health Care) have set up shop in high reimbursed states and have rewarded their stockholders very well.

·        In the year 2000, for-profit HMOs decided to drop hundreds of thousands of Senior Medicare patients — because they weren’t making high enough profits and they refused to begin charging any monthly fee.

·        HIGH Payment means that the more services you provide, the more money you make.

·        Minnesota bans profit-making HMOs.  You may or may not like HMO health care, but at least we don’t have the inherent conflict between the needs of stockholders and the needs of HMO patients

4. Politics

·        Claude Pepper (Democrat-Florida) watched out all older Americans but he particularly watched out for older Floridians.  His influence was considerable at the time this reimbursement system was being built.

·        Many in Congress receive huge contributions from the Health Care Industry -- you can believe it’s big business!   Contributions by these major health plans (such as Humana and Columbia) have targeted Representatives and Senators to push for retaining these excessive high payments in their regions.

·        Congress, naturally, wants to “bring home the bacon” of “free health care” to their constituents

5. Beneficiaries Self-Interest

·        Self-Interest of seniors in high-reimbursed states. They have benefited from excessive Medicare reimbursement through $0 premium Medicare Advantage plans that provide few deductibles, co-payments and may even cover most prescription drug costs.

·        They have benefited from this gravy train.  Beneficiaries in these high-reimbursed states get these low costs and high Medicare supplemental benefits at the expense of all of us in the rest of the country.

·        There has been major pressure put on by seniors living in the higher reimbursed regions of the country to get even higher Medicare reimbursement to keep the $0 premium options they have become accustomed to.

·        Seniors living in these areas are not about to give up these perks willingly.