Traditional Medicare is here to stay, but it won't include a prescription drug benefit anytime soon. The agency that runs Medicare, meanwhile, is micromanaged by Congress as it struggles to carry out a massive mission with insufficient resources.
Three former administrators of the agency previously known as the Healthcare Financing Administration, now the Centers for Medicare and Medicaid Services, agreed on those points last week when they speculated about the future of Medicare in a three-hour session hosted by the University of the Sciences in Philadelphia.
"The future of Medicare is really the future of our entire healthcare system," said Robert Field, director of the university's health policy program, as he introduced former HCFA Administrators Nancy-Ann DeParle, Bruce Vladeck and Gail Wilensky.
In a wide-ranging panel discussion, the one-time stewards of Medicare said they were optimistic that the program can withstand the influx of 79 million baby boomers from 2010 to 2030. They also agreed, however, that those boomers will be a demanding bunch, and that Medicare's incentives to promote quality healthcare need to be reinvigorated before a new onslaught of retirees enters the program.
"Is it impossible to coordinate? I don't think so," said Wilensky, HCFA administrator from February 1990 to March 1992 and now a senior fellow at Project HOPE in Bethesda, Md.
The difficulty, panelists said, is determining how to improve quality and modernize other elements of federal health programs. Such upgrades include computerized physician order-entry systems and other technologies used to improve clinical decisionmaking and minimize the potential for costly medical errors. One major challenge for CMS Administrator Tom Scully and his successors is figuring out how best to reimburse hospitals for those technology expenditures, panelists said.
Policymakers "are racing after the train once it's left the station" in improving the care seniors receive and doing it in the most cost-effective manner, said Bruce Vladeck, who ran the agency from 1993 to 1997. Vladeck is now senior vice president of policy at 964-bed Mount Sinai Medical Center, New York.
Medicare's immediate future is likely to involve a heated debate in Congress over how to add an outpatient prescription drug benefit. Wilensky and DeParle voiced significant pessimism that lawmakers would reform Medicare this year, despite Senate Majority Leader Bill Frist's recent conclusion that the stars are aligned for real progress.
"If I were the queen of Medicare, I'd like to repeal the tax cut and add a prescription drug benefit," DeParle said, referring to the Bush administration's 2001 tax cut and another round now under consideration that could cut taxes by as much $550 billion over the next 10 years.
DeParle served as HCFA administrator under President Clinton from September 1997 to December 2000. Currently, DeParle is senior adviser to JPMorgan Partners and adjunct professor at the Wharton School of Business in Philadelphia.