Restructuring of Medicare
ISSUE SUMMARY
The current Medicare program is a closed economic system in which price and benefit controls, expenditure limits, and bureaucratic micromanagement have removed any incentives for patients to be informed consumers and users of Medicare resources. The result is a system in which there are no natural, internal restraints on individual demand and spending, but an arbitrary, fixed limit on global spending. That arrangement has been responsible for the chronic physician reimbursement problem, in which a seriously flawed, volume-based scheme (the SGR calculation) has resulted in Medicare payments to physicians not keeping pace with the cost of running a medical practice.
Existing KMS policy has expressed support for eliminating barriers to private contracting between physicians and Medicare beneficiaries. Changing the program from a defined benefit to a defined contribution structure is consistent with that policy, and will incentivize patients to take greater control of their health care decisions, and should have a beneficial impact on Medicare expenditures.
ADOPTED ACTION OR POLICY
KMS reaffirms its support for restructuring the Medicare program as a defined contribution benefit, in which Medicare beneficiaries receive premium support to enable them to purchase and control their own private health insurance policy.
Adopted by the KMS House of Delegates on April 30, 2011.
