The Long-term Approach to Entitlement Reform

December 14, 2012

With all of the rhetoric about entitlement reform, both sides are debating the best way to cut Medicare. Rarely discussed in these conversations, though, is what the short-term and long-term impact will be to the patient.

My column, “The Link Between Fiscal Health and Population Wellness,” in the Huffington Post this week along with the Partnership to Fight Chronic Disease’s Capitol Hill Briefing – “Medicare & Health Care Savings: Can Entitlement Reforms Help to Bridge the Gaps for Healthy Aging” – both highlighted approaches to promote healthy aging, thereby significantly curtailing long-term health care costs.

Treatment of the symptoms of chronic disease account for 98 cents of every dollar spent in Medicare. Patients who have chronic illnesses have higher health care costs because of the nature of their illnesses – they often require more costly interventions, acute care and frequent emergency room visits and hospitalizations. If, however, we focus on both prevention and better management of these conditions in order to keep these patients well, Medicare beneficiaries will be healthier which will, in turn, have a positive impact on the national economy and the U.S. treasury.

Over the last decade, both policymakers and Medicare have realized the critical role that prevention plays in healthy aging. Beginning with the introduction of Medicare Part D – the prescription drug benefit in 2006 and continuing through the introduction of new annual wellness visits last year, preventive benefits are having a positive impact on Medicare beneficiaries’ health and the program’s bottom line.

For instance, the Congressional Budget Office released a study in November, estimating that access to prescription medication has reduced Medicare costs for beneficiaries anywhere from $1,200 to $7,800 per year for those with chronic disease. This improved access has led to better health management and provided seniors with the ability to follow their physicians’ orders and take their medicines as prescribed, which has ultimately headed off more costly interventions.

As Members of Congress continue to debate the cuts that should take place in Medicare, it’s important that we point them to the ramifications of their ideas and highlight that the only way to sustainably control costs is to have a greater focus on efforts that coordinate care and promote wellness and disease prevention rather than proposals that would increasing seniors’ financial responsibility or other similar ideas that would discourage positive self-management. While the long-term approach may not show the immediate cost savings, it will lead to a healthier population and a solvent program down the road.