Elder Belle's Blessing: Dr. Art Kellermann

(Photo by Patrice Carlton and published at National Geographic.)

This edition of Elder Belle's Blessing, an award given from time to time to those who work to enhance the rights and benefits of the elders, goes to Dr. Art Kellermann, a physician and a senior policy researcher at the Rand Corp, for his wonderful op-ed piece in this weekend's Los Angeles Times.

The bipartisan deal that kept the federal government from hurtling over the "fiscal cliff" on Jan. 2 actually increased Medicare spending. At the last minute, a powerful bipartisan group of senators inserted a provision into the bill that blocked Medicare, for two years, from getting a better price on an expensive drug used by kidney dialysis patients. This was in addition to a previous two-year extension obtained by Amgen, the drug's manufacturer. The move saddled Medicare with roughly $500 million in added costs over the next two years and generated a windfall for Amgen.

This is but one example of how Congress publicly criticizes growth of Medicare costs while privately restraining the Centers for Medicare and Medicaid Services, or CMS, from getting a better deal for Medicare patients and U.S. taxpayers. ...

Unfortunately, Medicare can't require proof that an expensive new product is any better than the one it's replacing; it's explicitly prevented from doing so by law. Medicare can't even encourage patients and doctors to select a less-expensive option that works just as well. With few exceptions, neither CMS nor the Food and Drug Administration can take a new product's price or its performance into consideration when making coverage decisions. And once Medicare starts writing checks, private health plans generally fall into line.

The practical result of this policy is that the U.S. healthcare marketplace lacks the strength to distinguish valuable innovations from those that simply drive up costs. It's a bad deal for patients and taxpayers. ...

If budget hawks are serious about lowering entitlement spending, they'll remove Medicare's straitjacket. The CMS should not be forced to pay more — sometimes lots more — for treatments, tests and equipment that work no better (and sometimes worse) than less costly alternatives. Permitting the purchase of lower-cost drugs or care would be far more humane to seniors than cutting their benefits.

If the CMS were empowered to negotiate for the patients it serves, it would not only reduce Medicare spending but also slow the growth of healthcare costs. If it could hold the line and pay only for drugs, devices and treatments that conform to professional guidelines, it would also improve the care that Medicare patients receive. Equally important, scrapping the "anything goes" approach of today would encourage America's drug and device manufacturers to focus their efforts on producing innovative products that cost less but do more.  

The core problem is this: While many worried that Medicare would lead to a government takeover of healthcare, the healthcare industry has been quietly increasing its influence over government.   [Emphasis added]

We don't need to raise the age for Medicare eligibility, cut benefits, or issue vouchers to cut the cost of Medicare now or in the future.  All we need to do is to untie the hands of CMS.  Not only will Medicare costs be lowered, so will healthcare costs in general.

It's time, even past time.