In Brief: Future of Medicare: Report on Expert Views

Retirement of the Baby Boom generation, the rising cost of health care, and the need to improve health care services for seniors raise critical questions about the future of Medicare. How can Medicare deliver better care, how can it operate more efficiently, and how can its financial viability be assured? AARP's Public Policy Institute asked 20 nationally recognized health policy experts-with views ranging from liberal to conservative-to address these questions.

How to Improve Medicare

Experts consulted for this report identified a number of options for improving the care Medicare delivers and boosting efficiency of the program. Their recommendations include efforts to:

Expand chronic care coordination—Medicare should improve care coordination as quickly as possible by testing ways to pay physicians and other practitioners for managing the care of fee-for-service patients with chronic conditions. Medicare should test the “medical home” model for assisting patients with multiple chronic diseases. This model can be used by individual practitioners and small groups of physicians as well as large group practices. The program also should explore how various care coordination models affect quality of care, patient outcomes and program costs.

Increase the use of most effective treatments—Proven methods for most effectively treating many common conditions are widely known, yet far from universally followed. Medicare should encourage greater use of such “evidence-based medicine.” Some experts suggest that adherence to well established clinical guidelines should be made mandatory, or at least linked to financial incentives that would strongly encourage their adoption. The federal government should also support development of information on the comparative effectiveness of treatments. A federal office should be established with technical capabilities to assess health care technologies and practices and to help translate research results into every day practice.

Reduce waste of resources—Experts generally agree that Medicare needs to address inefficient use of resources. Studies show huge differences in use of medical services around the country, but generally do not show that higher spending in a region corresponds to better health outcomes. Experts also agree that Medicare might apply greater pressure on providers in high-utilization areas to operate more efficiently, particularly those who are “outliers.”

Restructure benefits—Most experts call for comprehensively re-thinking the fairness and efficiency of the Medicare benefit structure. Many suggest “rationalizing” cost sharing by providing better financial protection with a catastrophic cap on out-of-pocket spending, at least for low and moderate income beneficiaries; combining deductibles for Parts A and B; and reducing the attractiveness of Medigap policies. Several experts suggest that Medicare adopt differential co-payments and coinsurance depending on “clinical need.” For instance, patients with chronic illness should face a lower co-payment for drugs and follow-up care than low risk patients.