Mayo Clinic: Medicare Expansion Won’t Get Us There

Via the Mayo Clinic Policy Blog

Proposal Would Not Increase Access to Health Care Services or Control Costs

The current Medicare payment system is financially unsustainable. Any plan to expand Medicare, which is the government’s largest public plan, beyond its current scope does not solve the nation’s health care crisis, but compounds it. We need to fix Medicare by moving it to a system that pays for value – quality health outcomes that are affordable over time – and ensure its success, before bringing more people into a broken system.

Expanding this system to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country. A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare. As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices. Despite these provider losses, Medicare has not curbed overall spending, especially after adjusting for benefits covered and the cost shift from Medicare to private insurance. This is clearly an unsustainable model, and one that would be disastrous for our nation’s hospitals, doctors and eventually our patients if expanded to even more beneficiaries.

It’s also clear that an expansion of the price-controlled Medicare payment system will not control overall Medicare spending or curb costs. The Commonwealth Fund has reported this result for Medicare overall by looking at two time periods – one four-year period where Medicare physician fees increased and one four-year period where Medicare physician fees decreased. Overall cost per beneficiary increased at the same rate during each time period. This scenario follows the typical pattern for price controls – reduced access, compromised quality and increasing costs anyway. We need to address these problems – not perpetuate them – through health reform legislation.

We believe insurance coverage can be achieved without creating or expanding a government-run, price-controlled, Medicare-like insurance model.

Mayo Clinic supports the proposed insurance exchange model based on the Office of Personnel Management’s Federal Employees Health Benefit Plan (FEHBP). This system will improve access to insurance, make reforms to the current insurance system that eliminate pre-existing condition exclusions, and create an individual mandate where individuals can purchase private insurance in various ways:

* Through employers,
* On the individual market,
* Through co-operatives, or
* Through an exchange model like the FEHBP.

We also believe that the government should help people pay for insurance premiums through sliding scale subsidies as needed.

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