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Paul Ryan Op-Ed: A Chance to Strengthen Medicare

March 25, 2015

Washington Examiner op-ed

Medicare is going broke, but this week we have a chance to start fixing it. And we can do itwith bipartisan supportby repealing a clumsy payment system that has threatened seniors’ access to care and vexed Congress for nearly two decades.

Here’s the problem: In 1997, Congress tried to put a lid on Medicare’s costs by capping doctor payments with a formula called the “sustainable growth rate.” Under the law, if Medicare spent more than the cap in one year, it would have to compensate by cutting doctor payments in the next.

But this quick fix was no fix at all. Costs continued to soar as doctors performed more treatments to make up for the pay cuts. And when the threat of automatic cuts loomed, Congress simply postponed them17 times. Meanwhile, doctors took time away from patients just to keep watch on Congress.

Thanks to this flawed law, Medicare is scheduled to cut doctor reimbursements by over 20 percent, starting next month. That means a lot of doctors may have to turn away seniors.

So my colleagues and I have come up with a bipartisan plan to replace these arbitrary cuts with real reforms. Our plan would strengthen Medicare by encouraging better care and rewarding doctors for better results.

Right now, Medicare pays doctors for every single treatment they performwith no regard for the patient’s overall health. It rewards quantity, not quality, of care. And 10,000 baby boomers are joining Medicare every day, so costs are growing out of control.

Our plan would start to move us to a patient-centered system. We would cancel the cuts and instead give doctors a modest increase for the next five years. Every year after, doctor payments would grow to depend more and more on results. Our plan would set up one streamlined program that would reward doctors who met performance goals and improved seniors’ health. Over time, Medicare would reward quality over quantity, and seniors would get better care because of it.

This reform would be a firm step in the right direction. Our plan would also achieve savings by making two other structural reforms.

First, we’d ask the wealthy to contribute more to their caresomething we have called for in the House Republican budget for years. Starting in 2018, seniors who make more than $133,000 a year would pay a higher premium for their doctor and prescription-drug coverage.

Second, our plan would discourage unnecessary doctor visits and give seniors an incentive to seek the most effective care. Many seniors have “Medigap” insurancethat is, a private plan that helps pay for costs Medicare doesn’t cover, like co-payments and deductibles. These plans insulate people from costs and, experts believe, encourage the overuse of healthcare. Beginning in 2020, this agreement would prohibit Medigap plans from covering the first $147 of out-of-pocket spending, so cost is once again a consideration in healthcare decisions.

The truth is, the real threat to Medicare is in the long term. That’s why we need these structural reforms. Together, they would provide big savings to taxpayers that would grow even bigger over the long term.

Our plan would give doctors the certainty they need. It would give seniors the security they deserve. And above all, it would be a firm step toward a patient-centered healthcare system.

Paul Ryan represents Wisconsin’s first Congressional District and serves as Chairman of the House Ways and Means Committee.