© 2008 delmar cengage learning. chapter 14 medicare: the great transformation john oberlander
TRANSCRIPT
© 2008 Delmar Cengage Learning.
Chapter 14
Medicare:
The Great Transformation
John Oberlander
© 2008 Delmar Cengage Learning.
2
Medicare: Offspring of NHI Failure
• Medicare has its roots in 1910s struggle for national health insurance (NHI)
• After repeated policy failures:– Proponents limited ambitions– Sought to expand coverage to “deserving”
group• The elderly
© 2008 Delmar Cengage Learning.
3
Medicare: Offspring of NHI Failure
• Champions of NHI then hoped Medicare would be incrementally expanded to cover all Americans
© 2008 Delmar Cengage Learning.
4
Legacies of Founding Compromise
• To achieve passage:– Medicare proponents were forced to
compromise with conservatives on a host of fronts
– These compromises made it nearly impossible to expand Medicare later
© 2008 Delmar Cengage Learning.
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Provider Accommodation Under Medicare• Compromises were also made with medical
providers
• Payments under Medicare were to be determined by hospitals, doctors
• Led to long-term increases in cost of program
© 2008 Delmar Cengage Learning.
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Effects of Accommodation
• “Blank check” to physicians, hospitals led to dramatic increase in cost of program
• Financial “crises” common in first years of program
© 2008 Delmar Cengage Learning.
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Effects of Accommodation
• Pressure to reform:– Led to institution of Diagnostic-Related Groups
(and successors) in 1980s
© 2008 Delmar Cengage Learning.
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Managed Care and Beyond
• Prospective payment systems lowered cost of Medicare program– But providers made up the difference by
shifting higher costs to private customers
• Businesses responded to higher costs by moving into managed care
© 2008 Delmar Cengage Learning.
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Managed Care and Beyond
• Pressure then built with Republican Revolution of 1994-95 for Medicare to post savings– Incorporate principles of managed care
© 2008 Delmar Cengage Learning.
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The Medicare Modernization Act (2003)
• Passed under President Bush– Complicated program represented vast
expansion of Medicare into prescription drugs
• Prominent role retained for private insurers
© 2008 Delmar Cengage Learning.
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The Medicare Modernization Act (2003)
• Savings partly attained through unique “doughnut-hole” structure– In which benefits curtailed for those facing
middling costs
© 2008 Delmar Cengage Learning.
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Chapter 14 Summary• Medicare was the orphan of the national
health insurance debate• Circumstances at enactment have had
profound effects on the way the program has unfolded
• Providers accommodated by program framers, particularly in terms of payment structures, amounts
© 2008 Delmar Cengage Learning.
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Chapter 14 Summary
• Political accommodation led to spiraling costs– Which were then controlled through
prospective payment systems
• Resultant cost shifting led business to move to managed care plans– Which were later introduced within Medicare