Medicare - A Short Take on Medicare Cutbacks

I keep six honest serving men
(They taught me all I knew)
Their names are What and Why and When
And How and Where and Who.

Rudyard Kipling, 1865-1936

What - Medicare cutbacks


Why - Medicare now accounts for ¼ of all federal spending. Health care spending is projected to double to $4.3 trillion by 2017, led by babyboomers, who will start turning 65 in 2011, and by Medicare, expected to increase to $844 billion, by 2017, and Medicaid estimated to increase to $717 billion by 2017. Health care will make up 20% of GNP by 2017. If unchecked, Medicare could devour most of the federal budget by2030. Something, say federal officials, will have to be done to ward off rates of Medicare cost increases.


When - Medicare cuts are now underway, with physician payments set to be slashed 10.6% by June, another 15% in 2009, by refusing to pay for specialty hospital care, by declining to reimburse hospitals for “never, never” complications, by cuts in oncology and anti-anemia drugs, and by reductions in common ticket high tech surgical and imaging procedures, brand name drugs, and systematic across the boards decreases in rate of increases for hospital inpatient, skilled nursing facilities, hospital outpatient, teaching hospitals, inpatient rehab facilities, home health care, hospices, and long-term care hospitals, Medicaid and uninsured cuts with cuts and freezes in many states.


How – This is largely a work in progress – a complex political, legislative, lobbying, and budgetary battle with uncertain outcomes.


Where - In states where re-elections hinge during 2008 and in Washington, D.C, depending on outcome of presidential and Congressional elections.


Who – Depends on success of Mike Leavitt, Secretary of Health and Human Services, other Medicare and budget officials in cutback initiatives and in programs promoting EMRs, other IT programs, price and quality (P4P), and transparency and on who gets elected. Democrats are more likely to resist Medicare cuts.