Several recent reports on the financial stability of Medicare have been released in the news this week and there is real cause for alarm despite the spin. Each year the government accountability office (GAO) gives a report on the status of the funds that support Medicare and Social Security, that report was just released this week and you might not have heard anything about it. The people in charge don’t really like this data to get much play in the media because they fear a huge backlash. This years report, while getting some great spin, is not as wonderful as some are making it out to be. In my opinion the future of Medicare is not bright, not necessarily because of a lack of revenue but because of poor policy when it comes to covered and non-covered services.
Before we get into the news lets talk about Medicare for a second. Medicare provides “insurance” for Americans aged 65 and older and those who qualify for social security disability, there is a monthly premium, a yearly deductible for both Part A and B, Part A has a daily co-pay, and Part B pays at 80% with the patient responsible for the reaming 20% of covered charges. Medicare part A covers in-patient hospital and nursing home coverages, part B covers out-patient services such as doctor visits and therapy, Part C is called the Medicare Advantage plan and in our experience terrible for seniors, Part D covers pharmaceutical expenses. Benefits for Part A are paid through the Medicare Part A trust fund and is financed by a 2.9% payroll tax. Part B and D is partially paid by premiums by Medicare enrollees and revenue from the general fund. In 2011, Medicare spending accounted for about 15% of the Federal budget. This share is projected to exceed 17% by 2020. Medicare spending is projected to increase from $560 billion in 2010 to just over $1 trillion by 2022. While the yearly GAO report is beneficial in assessing the health of Medicare Part A it does not tell us the overall health of Medicare because Part B is not included in the Medicare trust fund.
Back to the news, there is enough money in the Medicare trust fund to fully pay Part A benefits until 2030 after that the fund will run out of money. The spin is, this number has stayed the same instead of going down from last year so some are happy but people like me are not. Since Part B is not a part of the Part A trust fund we have no way to predict exactly what the cost for Part B will be on the general fund in the future. People think there is sufficient time to make changes or corrections to Medicare in order to extend the trust fund. The reality is 2030 is only 15 years away; are we going to get serious about really fixing Medicare before the last minute of the last hour on the last day? If you have been paying attention you have noticed politicians almost always wait to literally the last second to pass the most important bills they create. The only way to make changes to Medicare that does not dramatically effect seniors is by systemically changing the approach to reimbursement today not 2029. Additionally Medicare needs to go after the real abusers of their system on not just the “soft” targets. Take this new for example, from the same GAO report.
“Nearly $60 billion in Medicare funds distributed in 2014 that were meant to reimburse doctors for the care they gave older Americans were doled out to practices with dubious addresses or delivered to medical providers who had been given disciplinary actions by professional boards, according to the federal government’s watchdog agency.”
The GAO did a simple search of addresses in Google Earth to find out that some of the “doctors” listed addresses that didn’t exist or were fast food joints instead of clinics. The GAO also found payments going to providers who should have otherwise been disqualified based on their status with their state boards. Here we have 10%+ the what was spent by Medicare in 2010 going to potentially fraudulent providers. Instead of actively trying to prevent this Medicare is auditing every chiropractor who is a provider with them, not because chiropractors are a major source of fraud but because our profession used to be poor in documenting care. Medicare believes they can “catch” us in missing a date or forgetting to sign a note and use that as a means to deny the care chiropractors provide. The care wasn’t fraudulent but they try to get chiropractors on technicalities. Since Medicare only pays the 80% of the adjustment charge and nothing more, there is no way the amount they could “get back” would ever come close to $60 billion dollars. They are putting their effort into the “soft target” of chiropractors and missing the real abusers. Placing an effort into the real abusers is the first way to shore up the Medicare trust fund.
The other way to improve the fund it changing reimbursement practices. Treating chronic pain, spine related pain included, is a growing expense to Medicare. Chronic back pain is the number 1 cause of disability in the world. Chiropractic care has been found to be effective in managing spine and spine related conditions while also costing the healthcare system less. If Medicare actually reimbursed chiropractors for all we do, like the exam we need to do in order to find out what is wrong with each patient, and encouraged Medicare beneficiaries to go to the chiropractor first for their spine pain it would actually save Medicare money. Medicare completed a demonstration project in 2007 which showed this to be true but has not changed the way they reimburse chiropractors. There are a number of practices that recent studies have found to be of limited or no benefit these include epidural spinal injections, lumbar decompression surgery, oral steroids, and even tylenol. If Medicare spent less on back surgery and pharmaceuticals and more on chiropractic there is a net savings in there because drugs and surgery costs far more than chiropractic care.
The future of Medicare should worry all of us because someday we will all be a part of that system. The past and present strategy to “fix” Medicare has revolved around revenue, increasing taxes and premiums. Politicians have also considered raising the age of eligibility and cutting back on reimbursement levels but these carry huge political fallout. While some of those changes might continue to be necessary they might not have to be as dramatic. Changing the way Medicare covers chiropractic would not make up for all the shortfall in funding but it would be something that could help reduce the strain on seniors that tax and premium increases create. Chiropractic is currently being expanded in the VA system, in part due to congressional mandate, but also because it has proven to be valuable in treating the chronic conditions that veterans present with in a way that saves the VA system money. The same thing could be true for Medicare if they only try and support chiropractic instead of demonizing it. The future of Medicare could be bright by expanding the role chiropractors play in that system.