The mainstream media has been furiously writing the doomsday scenario for Republicans regarding the new Medicare drug benefit. The headline of a recent AP story, “Troubled Medicare Troubles GOP” says it all. As they see it, or rather, as Democrats see it, since there are no quotes from Republicans, Medicare is facing “system wide failure” that “puts the health of our frailest citizens at great risk” (Ted Kennedy). Senate Hillary Clinton has called the program a “man-made disaster” on the scale of Hurricane Katrina. And since tens of millions of seniors are at risk political experts predict Republicans will face enormous electoral consequences.
Republicans can rest easy about the risk of retribution. There is no systemic failure. On the contrary since January nearly 6.5 million seniors have been converted over from Medicaid to the Medicare drug program. Another 15 million are receiving drug coverage from Medicare’s managed care plans or through a subsidy that supplements their private company’s retirement plan. And since November, nearly 4 million seniors with no previous drug coverage have signed up for the drug benefit. Out of that 25 million or so, perhaps 30,000 seniors previously on Medicaid were inadvertently dropped from their new Medicare coverage because of software inconsistencies. That’s hardly a systemwide or Katrina-esque failure. Indeed, some might call it success
But not some Republicans who are inclined to use the headlines as an excuse to regulate the Medicare drug benefit in the name of cost containment or because they legislate in reaction to media or liberal pressure. Predictably Olympia Snowe (R-Maine) will reintroduce her proposal to use the Department of Veterans Affairs price and use restrictions on prescription drugs to save money. The greatest threat to Medicare in 2006 will come from Senate and House Republicans who see regulating the drug and biotech companies as political free throw in a close election race.
It’s probably too much too ask, but Republicans might want to learn something about how the Medicare drug program actually works before they hit the town meetings which will likely be filled with left-wing grannies bused in from seniors centers by the AFL-CIO and Families USA.
In fact, the private companies providing the drug benefit are treating people like real customers who are spending their own cash instead of recipients. The Internet and medical informatics are changing Medicare at a rapidly accelerating rate. People have more real control over health and health care choices than ever before. It’s unlikely that when faced with giving up their customized choices and great service in exchange for one-size-fits-all government programs, Medicare consumers are going to want to give back control.
Technology and market forces have transformed Medicare. Call it the Medicare version of Ray Kurzweil’s Law of Accelerating Returns that technological change is exponential. To paraphrase Kurzweil, because of its complexity, medicine has been slower than some other fields to fully embrace the computer. But the creation of a market for Medicare, along with the Internet and a broad array of advances in computerized systems, is bound to improve all aspects of medicine.
Under the new benefit program companies are providing seniors with monthly statements of their medication use and drug spending. They get tips about which benefit design is best, which drugs are either less expensive or most effective in reducing total health spending. Interestingly, these personalized efforts dilute the efforts of direct to consumer ads to have an impact since people now have hard data about how a drug works. Seniors will be able to enroll in disease management programs that are customized to their particular needs. For example, many drug benefit providers are rolling out a program to help people manage or lose weight that includes lifestyle coaching, screening for depression and encouraging the right use of drugs in order to avoid diabetes. Creating a similar program the government way would involve Congress, bureaucrats, lawyers and lobbyists spending years hashing out regulations to meet every objection.
Finally, the new technologically enhanced marketplace is light years ahead of the turgid Medicare program in its ability to evaluate new technologies and whether they reduce overall spending and improve health. This stands in stark contrast to the Veterans Affairs approach of rejecting most innovations on the basis of cost or price alone.
If Senator Snowe wants a command and control approach to drug cost she should set up a drug plan with the same prices, limited selection, restrictive access, poor customer service and long waits associated with the Veterans Affairs drug benefit and let it compete with the other programs out there. That’s real market competition. That’s the way the GOP should frame the Medicare issue in 2006, Senator Snowe to the contrary.
