The Future of Medicare

Transcript for: 
The Future of Medicare

MS. DIANE REHM

10:06:56
Thanks for joining us. I'm Diane Rehm. Medicare is the U.S. government's social insurance program. It serves nearly 48 million Americans. Medicare enrollment is expected to jump to 80 million by 2030. This week, Medicare's chief actuary told a House Budget Committee that controlling cost growth is the program's primary challenge. Joining me in the studio to talk about the future of Medicare: John Rother of the National Coalition on Health Care, Mary Agnes Carey of Kaiser Health News, and Grace-Marie Turner of the Galen Institute.

MS. DIANE REHM

10:07:43
I hope you'll join us with your own questions, comments, 800-433-8850. Send us your email to drshow@wamu.org. Join us on Facebook or send us a tweet. Good morning to all of you.

MS. MARY AGNES CAREY

10:08:03
Good morning.

MR. JOHN ROTHER

10:08:03
Good morning.

MS. GRACE-MARIE TURNER

10:08:03
Good morning.

REHM

10:08:04
Mary Agnes, tell us about this alleged Medicare fraud scheme in Texas.

CAREY

10:08:11
It's a historic case. The federal government says it's the largest Medicare fraud scheme, by dollar amount, linked to a specific physician ever in history. It's a Dallas area doctor who's accused of bilking Medicare of $350 million over a five- to six-year period, billing for home health services that either weren't rendered or weren't deemed to be necessary.

REHM

10:08:34
How did he do that?

CAREY

10:08:36
Well, he had a variety of schemes to get Medicare numbers to bill fraudulently under. He had kind of a boiler room, if you will, of people working to sign his name to a variety of papers and to process these payments.

REHM

10:08:51
And what about the New York case, similar or different?

CAREY

10:08:56
I think it is similar in scope. I mean, these Medicare fraud cases usually provide -- someone sees an opportunity to create fraud, to get numbers to bill the federal government, and it's up to the federal government contractors to catch those fraudulent claims and then go after these individuals. And this has been a big focus for the Obama administration. Last year, they talked about how they had recovered $4 billion of Medicare fraud. And they've got a renewed focus through current operations and also through the federal health law to try to get that waste, fraud and abuse out of the system.

REHM

10:09:30
So how widespread should we assume fraud is within the Medicare system?

CAREY

10:09:41
I think that that might be difficult to quantify, to give a specific number, but it is -- as long as people are out there and they see an opportunity, they're going to go for it. And it's something that has been part of the system and will continue to be. And even with all that the changes in the health care system predicted to happen with the health care law, this continued focus on fraud -- the thought now is to shift. Instead of pay and chase, which has been a lot of the fraud recovery efforts, they want to try to get this before these claims are paid. And that sometimes is the toughest thing to do.

REHM

10:10:13
Mary Agnes Carey, senior correspondent for Kaiser Health News. Grace-Marie Turner, how widespread do you believe health care fraud is?

TURNER

10:10:26
Oh, absolutely widespread. In fact, the fact that this was going on for five years in Texas and that they were able to get $350 million out of the program shows that this is -- that we need a much better fraud detection program and a lot more incentives to actually be able to go after these people. The case in New York is also interesting because it shows that if you have -- we have 111,000 pages of Medicare regulation.

TURNER

10:10:56
And people look at those regulations and they figure out, how can we figure out some channel, some path where we're doing something that's not going to trigger the computers and have all the funds begin to flow? In New York, this was actually private insurers that were built because New York passed a no-fault law for the state, saying that if you have an automobile accident, you can have $50,000 worth of payments without any questions asked for either the driver or the person who was hit.

TURNER

10:11:31
So that was people using this law that New York state passed, this $50,000 limit to bilk the system of millions of dollars in trying to figure out how can we find that channel. As long as this is run from sort of a top-down system and you don't have the bottom-up checks that you have in the normal economy, this kind of thing is inevitable.

REHM

10:11:58
Grace-Marie Turner, she's president of the Galen Institute. That's a research group focusing on free market health care reform and tax policy. Pardon me, John Rother, how widespread do you believe this problem is?

ROTHER

10:12:20
Well, I think we really don't know, but, however widespread it is, it's too much. And it's also clear that fraud takes place not only in Medicare but throughout the health care system. And so we do need to do a better job of making sure that we're not putting in place the mechanisms that prevent -- that allow this kind of abuse. And, I think, we're beginning to see some moves toward not only enforcement, which I certainly applaud, but as Grace-Marie said, some changes in reimbursement to take away the incentive to fraudulently bill.

ROTHER

10:12:57
And I have to say that we usually use the words fraud and waste together -- fraud, abuse, waste. The waste problem is actually the much bigger problem than fraud because there are billions of dollars in unnecessary care being delivered throughout our health care system every day, some estimates as much as 30 percent of the total spent.

REHM

10:13:20
Give me an example of what you call unnecessary care.

ROTHER

10:13:26
Well, people -- I think an easy example is people go to a doctor when they have a cold and feel that they need to get a prescription, and the doctor feels he should do something when, in fact, you don't need a prescription. Antibiotics don't work. You might as well just go home and rest and recover on your own. There are many other instances of people heading to the emergency room where there's actually no need for that.

ROTHER

10:13:55
Then there are examples of people, particularly specialists, who prescribe and use high tech medicine when much less expensive, lower tech interventions are shown to be just as effective. So we have this throughout our health care system today.

REHM

10:14:11
John Rother, he's president and CEO of the National Coalition on Health Care. He was formerly president of AARP. And if you'd like to join us, 800-433-8850. Send us your email to drshow@wamu.org. Mary Agnes, we now have, what, about 47.5 million people? And this is projected to move up to 80 million by 2030. What about just 10 years from now? What is the projected number then?

CAREY

10:15:05
I know that it's going to increase. I don't have a specific number for 10 years. But I do know that the -- you mentioned the baby boomers are filling into the system...

REHM

10:15:14
Yes.

CAREY

10:15:14
...how that's supposed to grow to 80 million by 2030. That's where a lot of the Medicare discussion is focused on on the Hill. More people coming into the system. How do you make it more efficient to accommodate them and to make not only the care -- looking at the numbers of what's spent, but how to make that care delivered in a more efficient manner?

REHM

10:15:31
And what are some of the ideas being offered?

CAREY

10:15:35
The idea -- for example, in the health law, there's the concept of an accountable care organization, making providers talk to each other more. Now, you've got 75 percent of Medicare beneficiaries in the traditional fee-for-service program. A lot of times those physicians don't talk to one another. You might have a beneficiary in traditional Medicare seeing several physicians. They're not talking to one other.

CAREY

10:15:56
And accountable care organization is thought to increase that cooperation, perhaps lower cost, give better quality care. Another idea in the health law is a bundle payment, a set payment for a certain episode of care with the thought that that's -- to John's point -- that's the incentive to make that care delivered in a more efficient manner, better for the patient, saves money for the health care system.

REHM

10:16:16
John Rother, do we know what the average cost per participant of Medicare is?

ROTHER

10:16:26
We do. I don't have it in front of me, but it's surprisingly high. I think we're in the $15,000 a year range, and it's a much higher figure than in any other country in the world. So we have plenty of opportunity to use those dollars better. Obviously, if you go higher than that, you're really imposing serious cost not only on the system, but on us taxpayers and on the beneficiaries. No one can afford this the way it's going today.

REHM

10:16:59
So $15,000 per individual, but how much of that cost is borne by the government itself? How much is borne by the individual?

ROTHER

10:17:13
Well, here is where it does get complicated because Medicare is financed in several different ways. And the hospital part is financed through payroll taxes, and then it pays the full cost. The part B program, that pays for doctors' premiums, cover 25 percent, and the general revenues pay the balance. So what happens -- I think the more meaningful question is, how much do people have to pay out of pocket?

ROTHER

10:17:41
And there, I think, it's alarming when you're a Medicare beneficiary. You're paying a very significant amount of money out of pocket. I think one figure is that about a quarter of all beneficiaries are paying more than a third of their total incomes toward medical expenses. And I think that's excessive by anyone's (word?).

REHM

10:18:02
And isn't most of that being paid in the latter years of life?

ROTHER

10:18:08
Well, it's paid for when you're the sickest. And oftentimes, that's toward the end of your life. But what's happening today is more and more people have chronic conditions -- high blood pressure, diabetes -- that are expensive throughout your life. And, of course, the longer you live, the more the total expense adds up. So we have a real epidemic of chronic conditions that's driving health care costs today. And the key to that is better prevention and changes in lifestyle, changes in diet. We need to do more to keep that chronic condition under control.

REHM

10:18:43
Short break and right back.

REHM

10:20:04
And welcome back. As we talk about Medicare growth, as we talk about fraud, we are welcoming your calls, 800-433-8850. Mary Agnes Carey is with Kaiser Health News. I asked you earlier about the frauds discovered in both Texas and New York. We have an email asking whether these two incidents indicate that fraud makes up a significantly larger portion of waste than previously thought.

REHM

10:20:48
According to the Institute of Medicine, fraud accounts for only 10 percent of health care waste and, conversely, excessive administrative cost, about 25 percent, and overuse of services, about 27 percent, make up more than half the health care cost.

CAREY

10:21:16
That's the -- exactly. I mean, that's the -- you know, you've got waste. John talked about inefficiencies throughout the system, whether it's administrative, whether it's in fraud recovery and detection, whether it's in the patient themselves overusing services.

CAREY

10:21:29
This is the conversation -- perhaps, after we get through the 2012 elections, the large conversation in 2013, as we turn to, perhaps, a less political environment to reduce the deficit, control the debt -- looking at health care spending, not only for the government spending, the federal health care spending, but also in the private side, how do we all work together to make this more efficient?

REHM

10:21:51
And on that note, here's an email from Arthur in North Plainfield, N.J. He asks, "What would it take to have a serious discussion in our nation about end-of-life care and what Medicare's responsibility should be? For example, stage IV cancers that are treated when there is no realistic hope of prolonging someone's life in a meaningful way." John Rother.

ROTHER

10:22:23
This is, of course, a very sensitive issue, and I think it's one that, ultimately, families need to be talking about because they're the ones that are going to make the decision. Medicare shouldn't make this decision. People who have information and understand their options often prefer less expensive treatments in order to keep the person comfortable. And the idea of palliative care is a very important idea that has shown to actually reduce the need or the desire for these more expensive and unnecessary procedures.

REHM

10:22:59
And by palliative care, explain.

ROTHER

10:23:02
It means let's make the patient as comfortable as possible. Let's emphasize that rather than subjecting them to another surgery.

REHM

10:23:10
Hospice care?

ROTHER

10:23:11
Hospice is a part of this. The hospice only comes when there's a diagnosis that this is terminal. Palliative is a broader idea, and that is shown to reduce the demand for these very expensive and often unnecessary interventions.

REHM

10:23:27
Grace-Marie Turner, to what extent do you believe Medicare needs to be basically fundamentally overhauled?

TURNER

10:23:37
Well, there have been a number of commissions over the last 15 years, bipartisan commissions, that have come to similar conclusions, that we need to move to a different model of how Medicare -- the payment structure for Medicare. Right now, we have a fee-for-service system that was designed in 1965. And most of the private health care market has really moved on to systems that have more coordinated care. And one-fourth of seniors have moved voluntarily into Medicare Advantage programs. These are private plans in Medicare.

TURNER

10:24:12
Many of them with the majority are health maintenance organizations that provide people with an environment where they know that their care is being coordinated. So we need to move toward a model in which seniors have more choice and control over how their health care arrangements are made and incentive to make good choices.

TURNER

10:24:32
We've seen through the Medicare prescription drug benefit, for example, that if the government provides a platform for competition among private plans, we can actually reduce the cost of the program, give people more choice and make sure that they get the care they need. That's a good platform.

REHM

10:24:52
How does coordinated care, as you put it, reduce costs?

TURNER

10:25:00
Well, for one thing, I served on the Medicaid Commission several years ago, and we talked particularly about dual eligibles, patients who are eligible for both Medicare and Medicaid. And they are often the poorest, the sickest, the most frail, and yet they wind up getting caught between these two programs where they may wind up with seeing three or four different doctors who are all prescribing different versions of the same medication.

TURNER

10:25:28
Then they wind up in the hospital, and then their medical records haven't followed them. So you wind up with fragmented care because no one's really in charge, and these are the patients who are actually the most expensive on our system, who are often getting the least coordinated care with somebody really looking out for their welfare and their well-being.

REHM

10:25:48
John Rother.

ROTHER

10:25:50
The best idea to deal with this is the idea of a patient-centered medical home. And the idea is that people should have a single place they go where they know everything about your medical care and condition, and they can then make appropriate decisions about -- and recommendations about that care. And it would really eliminate many of the problems that Grace-Marie just identified. And it would save money. It would improve care at the same time.

ROTHER

10:26:17
The problem is that we don't have that kind of primary care workforce out there. We have doctors now going almost overwhelmingly into specialty care when what we need is more primary care physicians.

REHM

10:26:29
So what is the inducement out there to move individuals into primary care service? They come out of medical school with huge indebtedness, so they seek a practice that's going to remunerate them and alleviate those debts, Mary Agnes.

CAREY

10:26:55
Well, in the health care law, I believe, there's an additional payment incentive for folks to go into primary care. There is some help for these people with their expenses while they get trained. But this is going to be sort of a fight, if you will, among the physician community. To John's point, specialists are often more highly compensated. The primary care docs would like a piece of that. Sometimes it's a zero sum game, where we've certainly seen Congress struggle with Medicare physician payments and holding them flat versus stopping them from being cut.

CAREY

10:27:22
So this is, again, part of this ongoing conversation about what is the role of primary care in the health care system and how does that -- how does their compensation -- how does that play off of -- and vary with specialists?

ROTHER

10:27:33
The average primary care physician today is getting compensated around $200,000, where the specialists are more like $400,000. So we've got to narrow that gap and...

REHM

10:27:45
How do you do that?

ROTHER

10:27:46
Well, I think one way would be to cap what the specialists get and then let primary care go up. But, of course, that's going to be controversial.

REHM

10:27:54
You bet.

TURNER

10:27:55
I think that would be very difficult to do, and I think that we need to look at 21st century information technologies that also letting non-MDs be able to do more in the health care system: tracking people through information, telemedicines, monitoring people in their homes. There are lots of things that we can do to really be innovative that's difficult to do under Medicare's fee-for-service structure of -- that's 11,000 pages of regulation.

REHM

10:28:25
Here's an email from Mary in the Woodlands, Texas, who says, "Those opposed to Medicare want to perpetuate the idea that it exclusively is riddled with fraud. Would they be surprised to learn that the private health insurance industry is equally riddled with fraud? Yes. The program does need radical restructuring, but we need Medicare for all." What do you say to that, Grace-Marie?

TURNER

10:29:03
We've had that debate, and, I think, the American people have -- first of all, Medicare's $38 trillion in the red. And it's really hard to see how we can have that program work for everybody when it's on a path right now that's not sustainable financially. And, actually, the chief actuary for Medicare, Rick Foster, testified to that yesterday before the House Budget Committee. And he actually said that he believes that one of the things we should try in Medicare is choice and competition.

TURNER

10:29:35
It's the one thing we haven't tried, to give people more choice in a more competitive market so that they can begin to make smarter choices because they are -- the costs are more visible. They have more choices, and the market has a chance to respond to them as consumers as they do in the Part D drug benefit.

REHM

10:29:54
John Rother.

ROTHER

10:29:55
Yeah, I think this is a tricky subject because I don't think there's any doubt about the fact that Medicare for all would actually be less expensive than our current system, in part because Medicare has a fee schedule and it's more efficient. But, on the other hand, we value choice. We do value competition, and we do value innovation that takes place in the private sector.

REHM

10:30:17
So I think there's a real tension between the desire to keep costs lower, which would move you in the direction of Medicare for all, versus permitting the kind of innovation that often takes place in the private sector, and which we actually are going to depend on to keep costs affordable.

REHM

10:30:34
What do you, John Rother, see as the best ideas or idea for containing Medicare costs out there?

ROTHER

10:30:47
Well, there are several, but I'll try to stick to one or two.

REHM

10:30:49
Sure.

ROTHER

10:30:50
We've talked about the need to change the way that doctors are paid, moving away from a system that just rewards, turning the crank faster and faster -- that's called fee-for-service -- to a system that rewards doctors for doing the right thing and keeping the patients healthy. I think we need to inject more competitive bidding into the system. I think we need to rely more on nurses and other non-physicians who can provide very excellent care for much less cost.

ROTHER

10:31:18
And I could keep on going, but I think that's -- you know, we're talking about real changes throughout the health care system, not just in Medicare. And we're talking about changes in the way health care is delivered, not just talking about changing the financing part of the program.

REHM

10:31:31
Now, would you say that you and Grace-Marie are pretty much on the same page? Where do you differ?

ROTHER

10:31:39
Well, I think that the untested idea is this premium support idea where...

REHM

10:31:45
Explain.

ROTHER

10:31:46
OK. So premium support is a way of limiting what government pays and putting -- shifting those costs onto the private sector. And I think the great risk is that you could have very much greater expenses on employers and on individuals as a result. It's untested, so it -- it's possible that we could maybe design it in a way that would not lead to that, but we don't have the specifics yet. And it's going to be very tricky to try to predict what would happen.

ROTHER

10:32:15
The whole idea behind premium support, though, is to cap the government contribution, and, you know, that's going to be very difficult to do without hurting other people.

REHM

10:32:25
Grace-Marie.

TURNER

10:32:26
We actually do have a form of premium support in the prescription drug program where people know that they have an allocation that the government is going to provide for their drug benefit. And then they can choose whether or not they want a very comprehensive drug plan, in which case they might pay extra, or whether or not they want a lower plan that perhaps doesn't give as -- give them as much choice, or whether or not they want that benefit to be integrated into a Medicare advantage program, in which case they have an integrated, coordinated care program.

REHM

10:33:01
Grace-Marie Turner, president of the Galen Institute. And you're listening to "The Diane Rehm Show." Mary Agnes Carey, what are the ideas out there that have the most political support now? Or are there any?

CAREY

10:33:22
Well, there are ideas all over the map.

REHM

10:33:24
Sure.

CAREY

10:33:24
For example, John talked about the premium support model. This is something Paul Ryan -- he's a Republican from Wisconsin, head of the House Budget Committee -- he introduced the plan last year that was passed in the House. He's revised that now with Ron Wyden, who's a Democratic senator from Oregon. Paul Ryan's original plan would not have allowed fee-for-service to be in that menu of choices for seniors, but the revised plan with Ron Wyden would. So people are looking at that.

CAREY

10:33:47
There's also a great -- you know, lots of examination on the health care law, some of those payment changes we've talked about: ACOs, accountable care organizations, or bundling. Will those work? How will they shake out? How will a patient-centered medical home work? There seems to be, I think, a lot of agreement on how fee-for-service is basically paid by the service. You are incentivized to do more. That's how you make more as a doctor or a provider in Medicare fee-for-service.

CAREY

10:34:13
And there is agreement that people want to change that because that incentive simply promotes more and more care sometimes when it's not needed.

REHM

10:34:21
And that combination of Paul Ryan and Ron Wyden, is that seen as a compromise on Paul Ryan's part?

CAREY

10:34:36
It is, in a sense, that fee-for-service would be allowed to be a choice. But the key factor, I think, in premium support, whatever the model is, what is the contribution?

REHM

10:34:44
Yeah.

CAREY

10:34:44
The model that Paul Ryan and Ron Wyden are looking at would be based on the second least expensive bid. That's the amount of money that you would receive. If fee-for-service costs more than that, and you wanted to stay in fee-for-service, you've got to pay the difference.

REHM

10:34:58
How would that work for you, John Rother?

ROTHER

10:35:02
Well, in this area, as in so many others, it all depends on the details. And we don't have the details yet, so it's impossible to project what this would actually mean for beneficiaries. I think the idea is worthy of very close examination, but -- and I'm looking forward to seeing a more specific plan. But, right now, it's very hard to make any determination about whether this is actually good for beneficiaries. We know it might be good for the government, but we don't know what the impact would be on people.

REHM

10:35:36
And if you can't determine how good it is -- and you study this all the time -- just think of how hard it is for people listening to understand this complex system and what it could mean for them personally. Are we likely, Mary Agnes, to get any action whatsoever on this until after the election?

CAREY

10:36:05
I don't think so. I think 2013 is the year when these concepts, lots of discussion on the deficit, the debt, entitlements, that's when that kind of discussion kicks in -- taxes -- next year.

REHM

10:36:16
How do you see the difference, John Rother, if a Democrat is elected or a Republican is elected president?

ROTHER

10:36:29
Well, the president does matter. But what matters even more is who controls the Congress, and so there's lots of different combinations. But, in general, Democrats are not enthusiastic about premium support idea, and Republicans are, so that's the most obvious way to compare the two, is a Republican president would probably embrace the idea. And President Obama, if he's re-elected, has expressed concerns about it.

ROTHER

10:36:58
However, I do think that these kinds of health reform ideas we're talking about, terms of changing the delivery and the reimbursement, go forward regardless. So I think that we're going to have...

REHM

10:37:10
They have to go forward.

ROTHER

10:37:12
Well, I think there's real support for pushing that agenda, regardless of whether we go to premium support or not. So I do think there's going to be a period of further reforms in health care.

REHM

10:37:24
John Rother. He's president and CEO of the National Coalition on Health Care. When we come back, we'll go straight to the phones, your calls, comments and questions. I look forward to hearing from you.

REHM

10:40:03
It's time to open the phones. And let's go first to Robert. He's in Fort Worth, Texas. Good morning to you, sir.

ROBERT

10:40:14
Good morning. Let me turn my radio down here. Several years ago, mother was suffering from osteoarthritis, and, you know, it affected her to the point she passed away. She was under Medicare and Medicaid. I was confused as to, you know, what the difference between Medicare and Medicaid is. And my confusion lies in the fact that I had to liquidate all of her assets in order for her to take advantage of Medicare and Medicaid.

ROBERT

10:41:01
Liquidating her assets resulted in her -- in me having to send her to a really substandard nursing home. It opened my eyes to the fact that it costs a lot of money for people to go to a very nice nursing home where the people who work there are very patient. And it really -- it just made me wonder, is this system just broken or what?

REHM

10:41:34
John Rother.

ROTHER

10:41:36
Well, your question is one that many, many people have because the two systems, Medicare and Medicaid, are different, and they have trouble working together. So your mother was what we call a dual-eligible. She was eligible for both Medicare and Medicaid.

REHM

10:41:51
Because he liquidated all of her assets.

ROTHER

10:41:54
That's right. So Medicare is a social insurance, and people who pay in earn that benefit and are entitled to it when they turn 65. That's universal. Medicaid, on the other hand, is only for the poor, and your assets have to be under a certain amount -- in some states, quite low -- in order to qualify for Medicaid. And, as you have found out the hard way, it forces people to spend down a lifetime of savings in order to qualify. And then that gives you very limited choices as to the quality type of care that you have.

ROTHER

10:42:31
So it's a very tough system for people who have often lived constructive lives, have been savers, have been economically responsible, yet find themselves in need of expensive health care when they are older.

REHM

10:42:48
Do you want to add to that, Grace-Marie?

TURNER

10:42:50
Yes, actually. And I think Robert's absolutely right. There are 9 million people in this country who are dual-eligible, eligible for both of the programs as his mother was, and yet they consume 25 percent of Medicare's resources and half of Medicaid's resources. So this is a hugely expensive population, and, as John points out, they are often getting substandard care. There is a new office created by the health law called the Federal Coordinated Health Care Office that is really trying to come up with a new policy so we can take better care of, often, these most, most vulnerable patients.

REHM

10:43:31
All right. To Hertford, N.C., good morning, Deanna. (sp?)

DEANNA

10:43:38
Good morning. Thank you for a titillating discussion.

REHM

10:43:41
Good.

DEANNA

10:43:41
It's about time for this subject. I would like to present my own experience. I was providing in-home care for my father in Colorado back in 1991. He suffered an incident where he had to be taken -- he was rushed to a-- I might add, a Catholic (word?) in the ICU. About two weeks after that incident, I received the bill, and it noted on there that his basic insurance and Medicare had been billed.

DEANNA

10:44:17
About two weeks after that, I received another bill for the same amount from that hospital's branch hospital, which did not have an ICU, and that they had billed Medicare and Medicaid -- or, I'm sorry, billed Medicare. Now, the amount was nothing small. It was $26,000 for each bill. I contacted Medicare and alerted them to that, and they said that they would get on it immediately and do an investigation. For the remaining care of my father, which was for the following eight years, that red flag went up, and I inspected every single bill that I received…

REHM

10:45:07
Of course. Yeah.

DEANNA

10:45:08
...to make sure that that double-billing was not going on.

REHM

10:45:12
John Rother, to what extent, do you believe this occurs?

ROTHER

10:45:17
Well, today, it's a serious problem. Tomorrow, as we implement greater efforts to put the health care system into a more modern information technology environment, it should not be nearly the problem that it has been. But, today, it's chaotic in most hospital billing departments. You don't see this anywhere else in the world. But in the United States, you have these huge staffs who are trying to all bill different insurers, and it's very inefficient. And there are sometimes intentional, but, more often, unintentional, errors that result in double-billing.

REHM

10:45:55
Mary Agnes.

CAREY

10:45:56
I think we all need to be doing what the caller was doing.

TURNER

10:45:58
That's exactly right.

REHM

10:45:58
Double-checking.

CAREY

10:45:59
Every time you get -- it's called your explanation of benefits. You get it for Medicare. You get it for private insurance. Look it over. Don't just look at the co-pay, what you pay, what was billed. Were you there that day? Did you receive those services? I agree with John. I think, many times, it's a simple mistake on the part of the practitioner. But it -- this is a wonderful example for everyone to listen to and to follow. Look at your bills. Make sure that they're accurate, you understand them.

REHM

10:46:23
All right. To Monticello, N.Y., good morning, Michael.

MICHAEL

10:46:28
Good morning. How are you guys doing? Very, very informative show.

REHM

10:46:32
Good.

MICHAEL

10:46:33
I have a -- I think as long as we have the government involved, the criminal mind is going to far outweigh what the government is going to implement to put an end to the fraud. I mean, I read the article about the doctor who frauded the government. And I don't know what the figure was. I know three guys, a father and two sons, who did seven years in jail. They frauded New York State out of $57 million 20 years ago.

MICHAEL

10:47:10
Now, I'm sure things were put into place to end those frauds, but I'm sure that if the criminal mind gets involved in this -- in Medicaid and Medicare and the whole deal, and, as one of your experts said, you know, the government can't wade through all those pages nor has the knowledge or understanding. I think the system is completely broken.

REHM

10:47:36
All right. Thanks for your call. Grace-Marie, that goes back to your 111,000 pages and people finding their way through.

REHM

10:47:48
Well, and, actually, New York State, in its Medicaid program, also found that there were dentists who were billing for hundreds of procedures in one day -- physically impossible to do that, milking the system.

REHM

10:47:59
But, you know, just because some criminal minds are out there at work does not necessarily mean the entire system is broken. You will find that it does work for a great many people. John Rother.

ROTHER

10:48:22
Well, two points I want to make. First of all, fraud's not limited to government programs.

REHM

10:48:26
Hardly.

ROTHER

10:48:27
It's also endemic to private health insurance for some of the same reasons. And let's not forget that it is private insurance carriers that actually administer the Medicare program in the billing. The second point is we could point a lot more resources into anti-fraud, but I'm not sure we'd be happy with that because that would mean a lot more inconvenience and perhaps higher administrative cost. And there's a better way, I think, which is to change the way we pay for care so that we're not having to double-check every single bill.

REHM

10:49:00
All right. And to Sigourney, Iowa. Good morning, Tom.

TOM

10:49:07
Hi. I came in late, so I apologize if anyone touched upon this. Often, these conversations, the role of the pharmacist seems to be overlooked. Community pharmacists can play a huge role in the lowering of the overall therapy cost of patients. In particular, you know, the doctors of pharmacy were trained to identify, you know, duplications of therapy or just basic-- you know, they were talking earlier about multiple prescribers. As a pharmacist, it's very easy to identify those and correct those.

TOM

10:49:36
But, more importantly, physicians do not often realize the actual cost of medication. And pharmacists are very aware of the cost because we are on the buying side of it, and we can -- all we often see, overly needless expensive medications prescribed when much, much cheaper medications can lead to the goal.

REHM

10:49:58
Grace-Marie.

TURNER

10:50:00
He's so right about pharmacists -- community pharmacists needing a larger role in the health care system. There's a wonderful project called the Asheville Project that allowed community pharmacists to help do basic checks for patients with diabetes, check their feet, check their A1C levels, check their blood pressure to see whether or not these patients were at risk of larger problems. If they would -- if the patients came in once a month, they got their diabetic materials and meds for free.

TURNER

10:50:32
So there was an incentive for them to do this. They wound up saving a huge amount of money. People were healthier, and community pharmacists were there, present and a really easily accessible resource for people to get care.

CAREY

10:50:48
Pharmacists were definitely a key player when the Medicare prescription drug benefit went into effect. A lot of seniors went to the drug store and asked the pharmacist, what is this thing? What works for me? Now, I can't tell you that pharmacist knew every single option they could receive.

REHM

10:51:00
Sure. Sure.

CAREY

10:51:01
But they tried to talk them through it. And one thing -- to the point of the pharmacist talking about sometimes there's a lesser expensive drug that will serve you -- when you're in the doctor's office or at the pharmacy or both, ask, can I get a generic? What you're prescribing, is there a generic available? It's often much less expensive usually. It has to be the same chemical compound to work the same way on your body. So that's something, again, we're talking about, you know, read your bills, talk to your doctor, can you have a generic, absolutely.

REHM

10:51:26
Of course. And many times, the doctor, him or herself, will say, you know, generic is fine. John Rother.

ROTHER

10:51:36
Yeah, I think, it's important that people understand that generics are just as safe and effective as brand-name drugs. And you should not feel that you're getting an inferior product, and they do save you a lot of money. The point I wanted to make is if you're taking more than four or five medications at the same time, you should make a point of talking to your pharmacist, particularly if they're being prescribed by different doctors.

REHM

10:51:59
I want to go back to Paul Ryan's plan, which I gather would really eliminate fee-for-service option and potentially require future seniors to pay more for coverage. And then a CBO analysis projected that, by 2030, a typical 65-year old would be required to pay 68 percent of the total cost of his or her Medicare covered services as compared with 25 percent they pay now. That sounds like a huge shift to individuals. Grace-Marie?

TURNER

10:52:54
Well, the Ryan-Wyden plan would, in fact, allow traditional Medicare to continue. But traditional Medicare is on a trajectory to -- that's just, A, its costs are unsustainable, but, under the health care law, doctors are expected to be paid less eventually than Medicaid physicians are paid today. There are -- Congress has to pass a law to make sure they don't get a 30 percent cut, which is going to significantly reduce access. That's why we have to change this program.

REHM

10:53:24
And you're listening to "The Diane Rehm Show." John Rother.

ROTHER

10:53:30
I think the idea that we're going to fix this program by shifting more cost to the patients is -- I want to use a stronger word, but I think it's an unattainable idea. I think we are much better off focusing on changes to how health care is delivered to promote efficiency and effectiveness and value. And, I think, under those changes, Medicare, as it exists today, is quite sustainable, except for the fact that it's going to grow so much.

ROTHER

10:53:55
There's so many more people coming into the program, so we can keep the cost per person affordable. But we are going to have to come up with more resources because it's going to serve such a larger part of the population.

REHM

10:54:05
And more incentives to get individuals into primary care...

ROTHER

10:54:11
Right.

REHM

10:54:12
...work. Did you want to add to that, Mary Agnes?

CAREY

10:54:15
Yeah, the -- I just wanted to kind of build on Grace-Marie's answer, that the revised -- it's hard to say -- Wyden-Ryan plan would allow people to stay on fee-for-service. But, again, I just want to get back to the point at how much money will be allotted for individual senior, and how will that compare to fee-for-service. Will fee-for-service cost you more to stay in it? That will guide a lot of behaviors for seniors, whatever that contribution is, which we don't really know if that is at this point.

REHM

10:54:40
And all of this assumes that those 65 and older who are eligible for Medicare, who are not only 65 but disabled in some way and thereby not holding private health insurance will have to pay more.

TURNER

10:55:03
Oh, I think, actually, that the -- that all of the plans would particularly protect older people, sick or the most vulnerable, that they would get a much larger contribution. You don't -- that's -- we already have the Medicare-Medicaid dual payment, that, if that money were combined, it could provide a much better plan. That earlier caller Robert said that his mother would have gotten better care because the care would've been coordinated.

TURNER

10:55:30
There would've been more efficient care. To the delivery system issues that John has talked about, there's so much potential to spend that money more wisely. But we've got to provide incentives for the marketplace to reorganize itself to provide those options.

REHM

10:55:44
John Rother.

ROTHER

10:55:46
Well, those incentives are starting to play out under the Affordable Care Act. They are demonstrations and pilots. But to the extent that they're showing good results, and many are, I think, we're going to see them spread. Most people in health care understand that things will change and need to change. And so we're seeing a tremendous period now of real fundamental shifts in the way that health care is structured.

ROTHER

10:56:13
Most people haven't caught up to that yet, but hospitals are hiring doctors and putting them on salary. And doctors are trying to form these medical homes, accountable care. All the different ideas that we have to change the way we pay for health care and change the way it's delivered are now in process.

REHM

10:56:31
John Rother, president and CEO of the National Coalition on Health Care; Mary Agnes Carey, senior correspondent for Kaiser Health News; Grace-Marie Turner, president of the Galen Institute. That's a research group focusing on free-market health care reform and tax policy. Thank you, all.

ROTHER

10:56:57
Thank you.

CAREY

10:56:57
Thank you.

TURNER

10:56:58
Thank you very much, Diane.

REHM

10:56:58
And thanks for listening. I'm Diane Rehm.

ANNOUNCER

10:57:02
"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn, and the engineer is Tobey Schreiner. A.C. Valdez answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is drshow@wamu.org, and we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.
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