Wyden-Ryan plan's intellectual godmother
The Medicare reform plan offered in December 2011 by U.S. Sen. Ron Wyden and U.S. Rep. Paul Ryan has many antecedents and contributing midwives. But the compromise plan’s true intellectual godmother may be one of Washington’s most familiar and respected policy experts, Gail R. Wilensky.
After the initial hubbub about the original Ryan plan for privatizing Medicare had died down, Wilensky published an article on May 19, 2011, in the New England Journal of Medicine saying, essentially, “Well, yes. But … “
She argued that the Ryan plan was too harsh and would never pass through the gauntlet of opposition among seniors, interest groups and Democrats that rose up immediately to denounce it. Ryan, a Republican from Wisconsin and the chairman of the House Budget Committee, had suggested that Medicare should move toward a premium support system, sometimes called a voucher plan. Seniors would receive a specific dollar subsidy—$8,000 for a 65-year-old in 2022—with which to purchase a private health insurance policy. The subsidy would grow by the rate of inflation, as reported in the consumer price index.
Three critical changes needed for success
In her essay, “Reforming Medicare—Toward a Modified Ryan Plan,” Wilensky wrote that to be successful, the plan should be revised in three critical ways.
First, the cost-of-living adjustment needs to be higher than inflation, probably gross domestic product (GDP) growth plus 1 percent or .75 percent.
Second, the government should set the subsidy such that in each locality, it would cover around 75 percent of the premium. This would be roughly equivalent to current practice, including all the parts to which beneficiaries must contribute.
Third, the government should continue to make traditional Medicare available to those who want it, and allow them to use their subsidy to purchase it. Traditional Medicare is Hospital Insurance (Part A) and Medical Insurance (Part B). Ryan proposed to leave traditional Medicare intact for those now 55 years of age and older. Leaving it as a choice for all “might be a politically important compromise,” Wilensky wrote.
All three of these suggestions appear, in recognizable form, in the compromise engineered by Sen. Ron Wyden, the Oregon Democrat, and Paul Ryan.
“The best part of it is, it’s a stake in the ground that bipartisanship isn’t necessarily dead,” Wilensky said in an interview the day after the Wyden-Ryan concept was published. “I think it’s terrific that the two of them were willing and able, in this most partisan time, to get this done. I like it.”
Although nobody on Capitol Hill had talked to her about the article, “I would be very pleased if it was helpful in bridging where the two of them are,” she said.
Misaligned incentives for providers, beneficiaries ail Medicare
Michigan native Wilensky, 68, has been an economist and public intellectual since the 1960s and has filled a number of important posts, including administrator of the Health Care Financing Administration (now known as Centers for Medicare & Medicaid Services) in the administration of George H. W. Bush (1990-1992), and chair of the Medicare Payment Advisory Commission (MedPAC) (1997-2001). She has also participated in shaping and overseeing healthcare for the military and veterans. Since 1993 she has been a senior fellow at Project HOPE.
The wall of her office in Bethesda, Md., is covered with pictures of herself with members of the Bush family in the White House and various high-ranking generals. A few years ago, during the height of the insurgency, she went to Iraq on a tour of U.S.-sponsored health clinics led by the Air Force chief of staff.
She describes herself as a market-oriented economist and a Republican. Asked if she would call herself a conservative, she answered: “I am a fiscal conservative.” Her career and outlook have been characterized by a pragmatism free of ideological rigidity. “I’m probably center right,” she said. “I’m a former regulator. When you run Medicare, you can’t not be a supporter of the role of government and of regulation.”
Asked what ails Medicare, Wilensky answered: “The incentives are seriously awry, so that we don’t reward the providers of care to behave in the way we’d like them to behave. And we don’t do a very good job rewarding the users of care, seniors, in how they behave, or self-care, or in terms of the providers they choose. When you put those together, it’s a really bad combination.”
To solve these problems will take many incremental steps, she believes. “There’s not a silver button or magic elixir.”
Seniors need to become more actively engaged in handling their own health and well being, in choosing where to obtain services, becoming informed, and in paying attention to how much it all costs and whether they are getting quality care. “None of that exists now,” she said.
She doubts that the Affordable Care Act (ACA) can meet the high hopes of those who passed it or advocated for it. “I am very frustrated that in 2,000 pages of legislation, we can’t talk about changing how physicians are reimbursed,” she said. She does not hold out much hope that accountable care organizations, or bundling, as presently conceived, will make a substantial dent in the problem.
The CMS Innovation Center will not be able to address these questions adequately, she thinks. She is also highly skeptical of the economic power being amassed by hospitals on the local level, as they merge and maneuver to increase their share of the whole health system pie.
“I don’t think the objectives of hospitals are necessarily the best of objectives for Americans who are trying to curtail healthcare costs,” she said.
-- by Duncan Moore for The Medicare NewsGroup
