Medicare at 50: Fixing the Status Quo

By  |  April 8, 2015 | 

Several years ago, I was talking with a hospitalized patient whose kidneys were failing about the difficulties she faced accessing care.  She was reluctant to see a primary care physician because she did not have insurance so preferred to wait until things got really bad.  During that hospital stay, I had to give her the bad news that she would need dialysis.  Unexpectedly, she actually smiled… she knew she could now get insured.  After I left her room, I had a conversation with my residents about how Medicare, the landmark legislation that has stood the test of time, is much more than just health insurance to some people.  It was hope for a cure.

Medicare turns 50 years old this year.  For half a century it has been our nation’s insurance plan for our seniors and those with end stage renal disease on dialysis.   While Medicare has been the primary way that our nation’s seniors afford healthcare, my patient’s story also highlights how Medicare is far from perfect.  There is much to be done in the next 50 years.

So what does Medicare 2.0 look like?  Currently, Medicare places a higher dollar amount on volume as opposed to value.  This means we are paid more when a diabetic patient gets an amputation that when the diabetic patient is kept out of the hospital with better control.   My patient’s example is a stark one.  One day you don’t need dialysis and you are uninsured, the next day you have end stage renal disease but congratulations you have insurance.  As an aside, it’s worth reading the method of Congressional testimony that influenced this decision.

Fortunately, change is on the horizon.  Recently, the Center of Medicare and Medicaid Services has stated their goal of moving from volume to value for 30% of their payments. For hospitalists, this means that it will be important to deliver high value care through avoiding unnecessary consultations and testing when patients are in the hospital, and working even harder to ensure the patients they discharge do not bounce back.

While certain fears loom, the status quo is unbearable. Too much time every year has been spent by policymakers, physicians, and Medicare recipients on worrying about whether their doctor will accept Medicare because of the ongoing debates on what to do with the SGR, or the sustainable growth rate, which caps the growth in Medicare spending so it doesn’t exceed the increase the growth in GDP.  Because healthcare spending always outpaces general spending, this has left physicians scrambling every year to avoid a massive salary cut and a Congressional 11th hour ‘fix’ 17 times since 1997! It has been 9 years since I personally testified to the House Energy and Commerce Committee on my birthday about the need to fix the dysfunctional reimbursement system.  Clearly, I did not get my birthday wish. And on April 1st (and no  this is not an April Fool’s Joke), because of a failure by the Senate to act before recess on an unprecedented bipartisan House Bill to rehaul the way Medicare pays doctors, a 21% cut in Medicare physician reimbursement goes into effect.  While the Senate plans to deliberate on returning from recess, this is a lot of wasted time and effort in a system trying to reduce waste.

In fact, Medicare would benefit from a massive kaizen event, with an effort to eliminate red tape, paperwork and practice hassle. As any hospitalist will tell you, the rule for Medicare patients to spend 3 nights in the hospital before they can be eligible to get coverage for rehabilitation does not make any sense.  Fortunately, there are experiments underway to get rid of this rule.

So while I celebrate the 50th year of Medicare this year, I look forward to these future changes and seeing how things develop over the next 25 years… at which point I will be hopefully still be eligible for Medicare.


Vineet Arora is a regular contributor to The Hospital Leader blog. She’s an academic hospitalist at the University of Chicago, Director of Educational Initiatives at Costs of Care, and also co-author of a new book Understanding Value –Based Care. This article originally appeared on MedPage Today on April 1, 2015.

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About the Author: Vineet Arora

Vineet Arora MD, MPP is Director of GME Clinical Learning Environment and Assistant Dean for Scholarship and Discovery at the University of Chicago Pritzker School of Medicine. Dr. Arora’s scholarly work has focused on resident duty hours, patient handoffs, sleep, and quality and safety of hospital care. She is the recipient of the SHM Excellence in Hospital Medicine Research Award in 2007. Her work has appeared in numerous journals, including JAMA and the Annals of Internal Medicine, and has received coverage from the New York Times, CNN, and US News & World Report. She was selected as ACP Hospitalist Magazine’s Top Hospitalist in 2009 and by HealthLeaders Magazine as one of 20 who make healthcare better in 2011. She has testified to the Institute of Medicine on resident duty hours and to Congress about increasing medical student debt and the primary care crisis. As an academic hospitalist, she supervises medical residents and students caring for hospitalized patients. Dr. Arora is an avid social media user, and serves as Deputy Social Media Editor to the Jounral of Hospital Medicine, helping to maintain its Twitter feed and Facebook presence. She blogs about her experiences at and actively tweets at @futuredocs.


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