Medicare’s Real Cost Problem

Covering Medicare, part six

Perhaps no other health issue is as important to so many Americans now and in the future as Medicare. In this ongoing series, “Covering Medicare,” we will follow the reportage and offer Medicare beat memos from time to time.

By now we’re getting kind of tired of the same old/same old Medicare discourse. The typical article goes like this: Will Ryan’s plan cost Republicans votes? Pity the poor frosh in Congress who have faced angry voters in town hall meetings. Lots of he said/she said. A predictable nut graph: Dems charge that Republicans will end Medicare as we know it; the GOP counters that they only want to change it—or, to use Luntzian language, “save, preserve, and strengthen” Medicare.

What’s missing are stories about why Medicare has a cost problem in the first place—the program’s reluctance or inability to say “no” to health care providers and sellers of medical technology who generally get their way in deciding whether the government will pay for something. That’s why an op-ed appearing in The New York Times a few days ago was refreshing and spot-on in its analysis. Dr. Rita Redberg, a cardiologist and editor of Archives of Internal Medicine, took on Medicare’s real waste and cost problem—it “spends a fortune each year on procedures that have no proven benefit and should not be covered.”

Redberg offered several examples. Medicare spent more than $100 million in 2009 for screening colonoscopies for beneficiaries, and about forty percent were for people over age seventy-five, even though the U.S. Preventive Services Task Force recommends against them in that age group. It advises no colonoscopies for people over age eighty-five. Same goes for pap smears and prostate screening. The task force advises against screening for prostate cancer in men age seventy-five and older and screenings for cervical cancer in women sixty-five and older who have had a previously normal test result. Yet Medicare spent more than $50 million in 2008 on these screenings, along with additional funds on unnecessary follow-up procedures.

The list goes on. Recently I wrote about digital mammography, which is quickly replacing film mammograms. Eight years ago almost all mammograms were done with film; three years ago only 47 percent were. The results of a five-year-clinical trial by the National Cancer Institute found that digital mammograms detected no more cancers in older women than conventional mammography. The lead researcher told the Center for Public Integrity “there’s no evidence that one should pay a premium for digital mammography.”

Yet Medicare does just that. The Center published a fine investigation earlier this year that showed how clever marketing, public relations, and campaign contributions from makers of imaging machines have triumphed over science and raised the price Medicare pays for the procedure. The Center found that Medicare pays $78 for film mammograms versus $129 for the digital variety.

How does this happen? Murray Ross, who directs the Institute for Health Policy at Kaiser Permanente, the big California-based managed care organization, described how doctor groups and manufacturers of drugs and technology thwart cost containment to make sure Medicare regulators do what they want. “It’s routine for a company to do an end run,” he told a class of my journalism students. “If you have new technology, you want it reimbursed,” Ross explained.

First, he said, they get an insurance carrier to pay for a new procedure. Once one starts paying, then the rest have to do the same. It’s kind of a competitive game of follow-the-leader. If this approach fails, they try to get a national coverage decision from Medicare. If none is forthcoming, they next try to persuade senators and representatives in Congress asking them to write letters to Medicare on their behalf. Sometimes that kind of pressure works, and Medicare bends. When it doesn’t, there’s always the chance to add an amendment to a budget reconciliation bill or a get the Medicare law changed to allow payment for the service in question.

Redberg argues that docs should be free, with the consent of their patients, to provide whatever care they agree is appropriate. But, she says, “when the procedure arising from that judgment, however well intentioned, is not supported by the evidence, the nation’s taxpayers should have no obligation to pay for it.”

Perhaps that step might actually “save” Medicare. Perhaps taxpayers might want to know this.

For more on covering Medicare, see an interview with Trudy Lieberman by Barbara Feder Ostrov, deputy editor of

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , , , ,