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A Plan for Medicare
By Setti Warren

The headlines of the past couple weeks have been filled with politicians debating Republican Congressman Paul Ryan’s plan to privatize Medicare.  The Congressional Budget Office (CBO) estimated, in early April, that this approach would actually increase an average senior’s medical costs by $6,400 in a decade.

I believe we must fight against privatizing Medicare, while offering serious proposals to keep the program solvent and confronting the long-term cost drivers in our healthcare system as a whole.

That begins with defending and improving the health reforms signed into law by President Obama last year, which increase the solvency of Medicare, and give 87,000 Massachusetts Medicare beneficiaries access to more than $20 million in tax credits to help them afford prescription drugs.  Repealing the law would increase the deficit by $230 billion while preserving a $136 billion taxpayer subsidy to boost private insurance company profits through overpayments to Medicare Advantage.  Republicans want to turn the clock back on taxpayer savings, seniors, small businesses, and working families.  I would vigorously fight repeal efforts, but health reform is only a start.

Of course we need to forcefully combat waste and fraud wherever we find it.  The CBO estimates that every $1 invested in cracking down on fraud in Medicare and Medicaid returns $1.75 for taxpayers, which would save $50 billion.  This just sounds like efficient government to me, but it’s only a piece of what we must do to control Medicare costs.  My plan is focused on reducing the price of prescription drugs and reforming the way we pay for care.

American consumers pay the highest prices in the world for FDA-backed prescription drugs.  Allowing Medicare to use its bargaining power to negotiate the prices of prescription drugs would have a game-changing impact for seniors on fixed incomes.  Medicare already serves as a model for savings in some areas with administrative costs accounting for only 2% of its total spending, compared to as much as 17% for private insurers.  Negotiating drug prices could save taxpayers an estimated $200 billion.

Also, lifting the federal ban on the importation of FDA-approved drugs would reduce the cost of medications by up to half.  Putting downward pressure on prices would help consumers, including Medicare and Medicaid recipients, afford their medications.  Municipalities across the country, including Newton, Massachusetts, already do this, and its saves millions.  Bills in the Senate, with strong safeguards against counterfeiting and other risks, have received bipartisan support.  This pragmatic approach would save the government $20 billion and consumers another $100 billion in the form of lower prices.

There is bipartisan consensus that Medicare’s reimbursement system, like so much of the rest of our health care payment system, is fundamentally flawed.  The health reform law achieved $200 billion in savings by starting to move the broken “fee-for-service” system to one based more on patient outcomes—without any discernable impact on quality of care.  We need to follow-through on reform, eliminate the “fee-for-service” model entirely, and replace it with a payment plan that rewards prevention, primary care and chronic disease management rather than the number of procedures and tests ordered.  Adopting a model based on patient outcomes would incentivize physicians to achieve savings by coordinating their services, especially for seniors with chronic conditions, reducing total Medicare spending by up to 30%.

In addition, we must ensure that these payments are equitable and encourage providers to remain in the Medicare system.

Physicians currently face a potential 29% cut in reimbursements, and this problem requires a long-term solution.  Seniors, taxpayers, and doctors deserve a system that makes sense, is cost-effective, and rewards quality care.

I balanced two budgets as mayor by slowing the growth of spending to achieve $8 million in savings, as my city grappled with a recession and the spiraling cost of health care.  I believe in smart, efficient, and effective government to bring about these results.  Now is not the time for demagoguery on Medicare, nor is it time for muddling through and playing politics on one of the most important issues before our nation.  It’s time for serious, thoughtful leadership to find the right solution that doesn’t saddle seniors and consumers with higher costs.

Setti Warren, the mayor of Newton, is a Democratic candidate running for U.S. Senate.


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Comment Preferences

  •  You might do better here if you also (3+ / 0-)

    stayed, answered, questions, and provided more than just a press release.

  •  Attack on Medicare masks stealth Medicaid assault (1+ / 0-)
    Recommended by:

    Mayor Warren: how would you strengthen Medicaid when the Republicans are looking to massively cut this program?

    IMO the GOP is engaging in their classic game of projection and misdirections. The projection here is their demonstrably false assertion that the Democrats want to end Medicare when the Republican's own Ryan plan would replace Medicare with Vouchercare.

    The misdirection is that while everyone focuses on Ryan's plan to end Medicare, the GOP will try to force the Democrats to agree to cut Medicaid.

    Given that about 2/3 of Medicaid is spent on nursing home care, that would represent a brutal blow to seniors. The rest of the money covers roughly 35 million children. So the GOP is going after two of the most vulnerable segments of our society: children and the elderly.

    What are you going to do about that Mayor Warren?

    •  Medicaid (1+ / 0-)
      Recommended by:

      Hi Dirk, thanks for your thoughts here.  I agree that we have to fight any GOP attempts to cut Medicaid funding or to repeal HCR.  I also believe that we have to do more to invest in community health centers.   These health centers provide care to 1 out of every 9 Massachusetts residents, and nationally they serve 20 million Americans.  I value this primary care-centered approach, and would fight to defend these valued non-profits.

  •  Regarding Medicare... (1+ / 0-)
    Recommended by:

    ...and Social Security, for that matter...why are Republicans being allowed to get away with their blatant lies that these programs are in trouble. They are not. In fact, with a couple of relatively painless adjustments, both of these programs, two of the most successful government-run programs not just in American history, but in world history, can be made solvent well into the next century, while keeping them both intact.

    As far as Medicare, all we really need to do is start means testing the program. Right now, everyone who pays in gets the same benefit, regardless of whether they are millionaires or billionaires. If we limit the amount of medical care that will be provided to those with incomes above, say, $500,000, we can reduce costs without endangering anyone's ability to get whatever healthcare they need. This will leave Medicare solvent for  a long, long time.

    As far as Social Security, two relatively painless adjustments can be made to ensure it's long-term solvency: raise the cap on those paying into the system (currently those earning about $106,800 pay nothing into Social Security on anything earned above that amount, for some bizarre reason)...and means test Social Security, as well. There are currently a lot of wealthy people who have little or no need for Social Security drawing from the system. If we reduce the payments to those with incomes above a certain amount and raise the cap, Social Security will remain one of the most successful government-run programs in world history, well into the next century.

    Why is nobody talking about these simple, easy adjustments that will make Medicare and Social Security solvent for a long, long time? Instead, Republicans are being allowed to lie to the American people, claiming these programs are in deep trouble and then proposing radical, unnecessary proposals that would, essentially kill off both Medicare and Social Security as we know it.

    Can you please start telling the American people, starting with the folks in Massachusetts that these programs are not in trouble and only need some relatively modest adjustments to ensure their solvency?

  •  National Health Care (0+ / 0-)

    Declare it as your goal or don't bother. We've had enough of wishy-washy GOP-lite Democrats. Be a real Democrat or this MA resident will never vote for you.

  •  Here is a question: (0+ / 0-)

    How do you come down on conflicts between what you campaigned on and what the leaders want?

    For example, party leaders seem to be hinting at a "compromise" for Medicare. Assuming the worst, would you oppose what they want if it violates what you campaigned on? Further, would you filibuster such legislation?

    Another example, Sen. Dorgan introduced legislation that would, in-fact, allow for drug re-importation. Despite campaign promises, Democrats largely voted against the legislation because the Obama administration asked them to.

    In a Democracy, everything is politics.

    by Nightshade Q on Tue Jun 07, 2011 at 11:38:42 AM PDT

  •  Sounds OK, so far as it goes. It should be a (0+ / 0-)

    first step towards some sort of Medicare For All.  Business will squawk, of course, but they will eventually come to see that it's for the better.

    "If you love your Uncle Sam, bring 'em home; bring 'em home." - Pete Seeger

    by brae70 on Tue Jun 07, 2011 at 04:09:39 PM PDT

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