Contributed by The Association of American Physicians and Surgeons

"This is the beginning of the end of the Medicare program," declared Rep. Jerry Kleczka (D-WI), referring to H.R. 1, the great 749-page bipartisan Medicare expansion--which squeaked through over opposition from both extremes of the political spectrum (see pp. S1-S2).

While AAPS has been predicting an inevitable end for some time, the day of bankruptcy (probably not what Rep. Kleczka meant) can only be hastened by adding a prescription drug benefit without major reform.

No one knows what will emerge from behind the closed doors of the conference committee, which is likely to unveil its product just before a holiday or at another time when newspapers are not watching. Anyone who thinks that the proper alignment of the stars is not a good rationale for major legislation should speak up now.

Problems With the Prescription Drug Benefit

First, what the prescription drug benefit is not:

It is not insurance. From Insurance 101, to underwrite a risk--i.e. to offer true insurance--three conditions must be present, as explained by Dick Matthews: (1) the potential claim must be very substantial; (2) the potential claim must be rare; (3) the claimant must not want the claim to occur.

Even if one insists on calling a third-party payment scheme insurance, George Fisher, M.D., points out that the drug benefit is more like a reinsurance scheme. "What is impossible to administer to the public is very simple to administer if the client is a primary health insurer. Blue Cross or whoever will take all the heat for the price control and the quality deterioration, the turn-downs and the pre-authoriza­tions, the anger and the anguish. The government will simply make it overgenerous at first, and then squeeze it down later, letting the primary carrier dangle in the wind" (message 9934, Yahoo Groups).

The program is not a mere $400 billion commitment. It is an open-ended entitlement, like Medicare--which by 1990 cost seven times as much as had been projected. The $400 billion is an estimate by the Congressional Budget Office (CBO) of the cost of the program over 10 years--counting the three before it goes into effect. The next 10 years would be more than twice as expensive (USA Today 6/29/03).

The bill is not a "crucial reform" of Medicare, though headlined as such on the AMA's home page on July 6. "The idea of using the drug benefit as a carrot for real reform was dropped without a fight" (Wall St J 6/25/03). No real reforms will be implemented until 2010 at the earliest.

The bill does not offer seniors a genuine choice. As John Goodman of the National Center for Policy Analysis (NCPA) explains, seniors may get many choices among inferior plans while being denied the choice of one good plan -- and the bill could cause more than a third to lose their employer-provided coverage (Wall St J 6/27/03). A better plan would be to repeal current congressional mandates: it is illegal to offer seniors low-cost prescription drug coverage that is not bundled with other costly benefits (Investor's Business Daily 6/20/03).

Drug Benefit is Not Real Reform

What then is this program?

Some suggest (wishfully?) that it's a politically savvy move by conservatives to gain a filibuster-proof majority in 2004, and to sneak in Medical Savings Accounts, and to come back with a fix before the program takes effect.

Others say it's a "giant roll of the dice"--with taxpayer money--for a short-term political payoff (Wall St J 6/23/03).

For certain, it is a huge unfunded liability, on top of the $38 trillion by which promised Medicare benefits already exceed projected revenues over the next 75 years (ibid.).

Most importantly, the essence of the plan is increased government control--even though the Senate defeated an amendment by Sen. Hillary Clinton that would have created a government bureaucracy to assess whether drugs were "cost effective" enough to be permitted under the program.

"Government will play an even greater role in deciding what drugs seniors get, how doctors and pharmacists are paid, how private medical information is distributed, and what drug companies benefit most. The plan moves America disastrously toward a complete government takeover of medicine," writes Rep. Ron Paul, M.D. (R-TX), a life member of AAPS.

With this package, the Republican Congress enacts still another piece of the Clinton Plan that it defeated in 1994, following up on SCHIP and HIPAA.

Who Benefits from the Bill?

According to the New York Times, large employers will be able to shift some of their burden of retirees' drug costs onto the government [i.e. the next generation]. Some segment of the pharmaceutical industry apparently expects to benefit, as it reportedly spent $135 million lobbying for the bill, according to Rep. Paul.

Who will suffer? Small local pharmacies may be driven out of business, leaving seniors in rural areas without immediate access to drugs such as antibiotics (Post-Journal 6/19/03). All will lose the benefits of innovation and true price competition once the pharmaceutical industry becomes a virtual partner of the federal government.

The massive nonparticipation dreaded by the government in 1965 may yet occur. In Seattle, only 44 percent of physicians accept new Medicare patients, down from 71 percent four years ago. A 2003 survey by the AMA and the American Academy of Neurology found that more than 11 percent of neurologists no longer treat patients, and 33 percent have withdrawn ­certain services.

Even patients may opt out. Senior enrollment in voluntary Part B actually decreased from 33 million in 2001 to 32.7 million in 2002, while Part A enrollment was steady.

The effort to save American medicine clearly must not await action from Congress.

AAPS News August 2003;59(8)