Anyone reading SmartMoney’s take on Medicare would want to get granny off the program in New York minute. It was one of those “list” stories—five places you must visit, ten foods to eat in the new year that grab reader attention. But “list” stories that purport to do more than simply name a national park or suggest you eat Iberico hams often run into trouble, and shortchange their audiences. SmartMoney’s did that. Its catchy title—“Things Medicare Won’t Tell You, The government’s massive entitlement program is full of costly glitches”—would reel in the eyeballs, even though the story was misleading, incomplete, and often one-sided.
Right off the bat, the magazine clobbered Medicare for forking over “millions for unproven procedures,” a theme that the Center for Public Integrity has promoted all year in an interesting series on overuse of medical services and fraud in the program. SmartMoney cited the Center and reported:
Medicare often pays significantly more for liquid-based cytology, a screen for cervical cancer, than it does for routine pap smears, even though a large 2009 study found that the expensive test is no more effective than the traditional procedure when it comes to detecting cancer.
Well, yes, but that’s only half the story. In 2001, CJR reported in a piece called “Covering Medical Technology—the Seven Deadly Sins” that the makers of the then-new cytology screening pushed commercial insurance companies to pay for the more expensive technology; eventually most of them, along with Medicare, did. It’s the way new tests and procedures, often unproven, filter into general use. Insurance companies pay for them as often as Medicare does. Ditto for digital mammograms. It’s hardly fair to pin the problem on Medicare. Is it okay for private insurers to use the technology, but not Medicare?
“Don’t expect a five-star plan” is another complaint. Is Medicare’s rating scheme too tough? That seems to be the implication. If there are few five-star Medicare Advantage plans—and there were in the latest batch of ratings—it’s because the private insurance sellers, which provide the benefits under these arrangements, have yet to measure up on such dimensions as customer service. Is the solution for Medicare to lower its standards? Even if there are no five-star plans in an area, seniors have many other choices, such as old-fashioned Medigap policies that offer them much more freedom to choose their doctors. The story the reporter presented was incomplete at best and misleading at worst.
The program is not popular with doctors, SmartMoney told readers, citing a “new study” that found “many doctors limit the number of Medicare patients they will treat.” Then it mentioned a 2010 study from the AMA, saying that docs of all kinds restrict the number of Medicare patients they will take on at a given time. Was that the same study? The reason docs are pulling out, according to the magazine, is that payments from the government are too low. The reporter did talk to Medicare officials who said participation in the program was “at an all-time high.”
Doctors have been whining about low payments for years, but still most accept it because it’s a revenue stream they can’t live with out. The larger question is this: If Medicare continues to ratchet up the fees to doctor-preferred levels, what does that do to the overall cost of the program? Politicians are already attacking Medicare spending, and want to shift more of the cost to seniors. There are two sides to this payment problem. SmartMoney took a pass on one of them.
SmartMoney criticized the program because it pays for dead people. Who would want to spend money for that? Nobody, of course. Sometimes it’s a case of fraud—doctors, hospitals, or suppliers knowingly use a dead person’s identification number. Sometimes it’s a mistake. But according to an official of a database management company, “it’s usually a clerical error on the part of Medicare that they actually pay these claims.” But wait a minute, it’s private insurance carriers like Blue Cross that pay the claims for Medicare under a sweet deal carved out when the program began. Don’t insurers know how to manage data?
As for fraud, the program could do a lot more to police unscrupulous behavior, but money for more vigorous enforcement is scarce. Says Medicare expert Henry Aaron, a senior fellow at the Brookings Institution, “there is certainly a lot of fraud going on. You could save several dollars for each one dollar you spend (to police it).” But hiring more government employees is not a fashionable solution. At the end, the piece conceded that Medicare does “get ripped off a lot,” and noted fraud is a major problem. But wait—didn’t that just contradict what the data management company official said in a previous paragraph? Confusing, huh?