The New England Journal of Medicine
December 13, 2001
Correspondence
To the Editor:
Why must the debate about Medicare reform be limited to the offering of two narrow choices? The proposals of both Vladeck and Wilensky (see comment) will reduce health coverage and add to beneficiaries’ costs; both authors acknowledge that the current Medicare benefit package is already inadequate and probably underutilized.
Medicare currently spreads its costs widely through the use of general income taxes. Its benefits, however, go only to a segment of the population, whereas everyone else must have health care coverage purchased by employers or themselves, leaving a large fraction of the population uncovered or undercovered. National health coverage with a defined-benefits model would spread the costs and benefits widely, and thus the high costs and high utilization among the elderly would be balanced by the low costs and low utilization among younger, healthier persons.
Shifting coverage of the elderly into the commercial insurance market would improve insurance companies’ business but would actually reduce coverage, since commercial insurance has administrative costs that account for at least 20 percent of their expenditures, whereas the administrative costs of Medicare account for only about 3 percent of expenditures. The experience with commercial Medicare health maintenance organizations has shown that the savings they achieve by reducing utilization are outweighed by administrative expenses and increasing prices paid to providers.
Using the for-profit insurance market to reform Medicare or keeping it unchanged except to tinker with the benefit package cannot be the only choices. National health coverage would solve the problems associated with Medicare and would address the needs of the 40 million people who currently have no coverage at all. Why not consider this approach?
Robert Clark, M.D. University of South Florida Tampa, FL 33612
Excerpts from the responses of the authors:
I agree with almost everything (he) says.
Bruce C. Vladeck, Ph.D. Mount Sinai School of Medicine New York, NY 10029
I disagree with Clark… I do not believe this country will adopt national health insurance for a variety of reasons, not the least of which involves the tremendous shift in power that would result from transfering the $1.3 trillion health sector to the federal government.
Gail R. Wilensky, Ph.D. Project HOPE Bethesda, MD 20814-6133
Comment: Who said anything about transferring the health sector to the federal government? Dr. Clark is suggesting national health coverage, and Dr. Vladeck essentially agrees. Except for equity, national health coverage (social insurance) has very little in common with a nationalized health care delivery system.
In the original articles (NEJM, Aug. 9, 2001), Dr. Vladeck indicated that we could have corrected the deficiencies in the Medicare program by accepting a smaller tax reduction, while Dr. Wilensky advocated for a premium support approach to reform, stating that it would be readily accepted by newer retirees since they have different expectations by virtue of their experiences with managed care health plans.
Dr. Wilensky seems to suggest that adapting to mediocrity in health care is the price that we must pay to fulfill her libertarian agenda.
Dr. Vladeck suggests that we would have the resources to improve the quality of our Medicare program but for our newly enacted tax policies.
Dr. Clark suggests that we should dilute the Medicare risk pool with low-cost healthy individuals, and that we should reduce administrative waste through public administration of a program of universal coverage. Of course, he is right. Not only should we demand comprehensive coverage for the Medicare population, we should now demand it for everyone. Accepting quality care for all of us is the price that we are going to have to pay for rejecting the libertarian agenda.