The $34 trillion problem[Medicare]

Fortune Magazine ^ | 04 Mar 2008 | Geoff Colvin

[BGHater]

Medicare is poised to wreak havoc on the economy. And our presidential candidates are avoiding the issue.

Twice I have asked Alan Greenspan what he considers the greatest threat to the U.S. economy, and both times he has answered immediately with a single word: Medicare. He isn't so worried about the trade deficit and the housing crash; he figures market forces will sort them out. But Medicare is something else - a multitrillion-dollar problem that's about to get dramatically worse, and one that nobody wants to talk about. You'd think that the greatest threat to America's economy would be Topic A for the presidential candidates. But it's actually a topic they hate to touch.

Especially now. An analysis of their speeches shows that last year Senators Hillary Clinton, John McCain, and Barack Obama would occasionally mention the Medicare mess. But recently, with the economy slowing and voters feeling insecure, all three candidates have turned more populist: Their economic talking points are about feel-good reassurances, not about facing hard realities.

[RichardW]

I think the core solution is to involve the patients and/or their families. We need to know up front what something costs. As it is now, we don’t know and it is a slugfest between the medical providers and he chiseling insurance companies. And we get caught in the middle. Now it is a national problem in that we can’t pay for it. We need to bring the market back. I would start off by publishing the cost of all procedures and medical costs. We have to know what something costs.

I was charged over $10,000 just for one hour in an operating room plus another $1,500 for the recovery room. Total bill came to $30,000 and I’ve only seen a small portion paid by the insurance carrier. Can you believe $47 for a Zocor pill even though I had plenty with me. The stated excuse for now allowing me to take my own pills was that the hospital might get sued if I overdosed? (on a statin drug - give me a break.) The aspirin was downright cheap at only $3.25 for an 81 mg tablet.

[Our man in washington]

The reason they do that stuff is because of Medicare limits. They apply these to all patients. If Medicare will only pay X for a cost, but it costs the hospital more than X, they have to make up the cost somewhere. Pills are a great way to do it.

If Medicare went to coverage for catastrophic care only, this stuff could end. Part of my thinking is that the cost for care up to the catastrophic level would come from tax-free health savings accounts. If Hospital A charged you $47 for a Zocor, you might take your business to Hospital B rather than blow through your entire health savings account.