Medicare and Medicaid spending cuts of the magnitude proposed in President Clinton's healthcare reform plan shouldn't be made without guaranteed universal coverage and private-sector cost controls, a congressional advisory panel said last week.
The Clinton plan would curb the growth of Medicare spending by $124 billion and Medicaid by $69 billion during a five-year period. In its annual report to Congress, the Prospective Payment Assessment Commission warned that such deep cuts could hamper access to care for patients in both programs unless the reductions were accompanied by universal coverage and systemwide cost controls.
Medicare has been a major revenue source for teaching hospitals and facilities that treat a large number of poor patients, said Donald Young, M.D., ProPAC's executive director, at a briefing with reporters. "If you cut those payments without increasing payments for the uninsured, you put those hospitals at risk" and, in turn, jeopardize the patients they serve, he said.
ProPAC also expressed concern about the elimination of disproportionate-share payments-additional reimbursements to hospitals that treat large numbers of poor patients. Medicare disproportionate-share payments would be cut by $4.8 billion by the year 2000, the report said. But the extent to which these cuts would be offset by universal coverage under the president's plan "is difficult to estimate" ProPAC said.
The reductions should be strictly coordinated with the implementation of coverage, the panel said, because, otherwise, "hospitals that provide care to low-income populations may be adversely effected."
Furthermore, without cost constraints on private health spending, the gap between Medicare and private rates would grow, raising concerns about beneficiaries' access to services, the panel said.
ProPAC didn't specify whether private cost controls should be regulatory or market-oriented. But Dr. Young noted that some health policy experts, including those at the Congressional Budget Office, were "skeptical" about the ability of competitive forces alone to control spending.
ProPAC's report also:
Supported the president's proposal for an all-payer pool to fund teaching hospitals' additional costs, but it raised concerns about the proposed $17.8 billion five-year reduction in indirect medical education payments and its potential effect on access.
Opposed the administration's proposal to eliminate peer review organizations, recommending that the program continue until it can be replaced with one that can be proven to be more effective.
Suggested an increase in hospital payments by an average of 2.7% in fiscal 1995, with a 2.2% hike for hospitals in all urban areas, a 5.3% rise for rural facilities and a 3.6% increase in capital payments.
This year's ProPAC report came as congressional committees began drafting healthcare reform legislation. Yet ProPAC steered clear of volunteering recommendations on such controversial issues as global budgets.
"We didn't want to be way ahead of the political process," Dr. Young said. The panel instead chose to "stay with what we do best-analytical work."
But that wasn't the tack of a sister panel, the Physician Payment Review Commission, which recently voted to recommend in its March 31 report that Congress create a publicly managed healthcare system similar to Medicare.
The new public system, which would pay providers Medicare-type fees, would be one national purchasing alliance for small businesses and individuals not covered through other plans. It would be administered by a quasi-governmental agency.
The reforms that the panel will recommend are similar to legislation being crafted by Rep. Fortney "Pete" Stark (D-Calif.), chairman of the House Ways and Means health subcommittee.