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Rob on the Road

Medicare: Lowering Costs, Not Making Harmful Cuts to Benefits, Is the Key

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The more I hear from you as I travel across the country, the clearer it becomes: Lowering health care costs, not making harmful cuts to benefits, is the right way to strengthen and preserve Medicare. It's the overall cost of health care for everyone — Medicare recipients, working people and employers — that burdens our federal, state and household budgets.

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The U.S. health care system is the most expensive in the world. Americans spend about $8,200 per person on health care annually. Canadians, by contrast, spend about $4,400; and the French, about $4,000. An average hospital stay in the U.S. is about $18,000; in Canada, the Netherlands and Japan, the next priciest countries, comparable costs are $4,000 to $6,000 less.

Even so, outcomes in the U.S. score mediocre at best and are downright tragic for as many as 100,000 people who die from medical errors annually.

According to the World Health Organization, the U.S. health system ranks 37th out of 191 countries — well below France, in first place, and just above Slovenia and Cuba.

Some responsible, commonsense solutions will help lower costs:

  • Let Medicare negotiate lower drug prices. Medicare cannot use the bargaining power of its 49 million beneficiaries to secure lower drug prices the way private insurers can. We must change that.

  • Reduce fraud and waste. The U.S. health system squanders as much as $750 billion on "unnecessary services, excessive administrative costs, fraud, and other problems," the Institute of Medicine reports. Some experts estimate that Medicare spending would decline by almost 30 percent if wasteful costs could be eliminated.

  • Bring generic drugs to market faster. Some pharmaceutical companies pay generic-drug manufacturers to delay bringing products to market. That means you spend more on brand-name drugs — and health costs go up.

Americans pay into Medicare their entire working lives, and we count on it for our health security.

To strengthen and protect this vital program, we must bring down costs in the overall system. Please visit earnedasay.org to learn more.

Robert Romasco is the president of AARP.

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