Judd Gregg: Medicare Shortfall Demands Attention

Judd Gregg, a former Republican senator from New Hampshire, served as chairman of the Senate Budget Committee from 2005 to 2007 and ranking member from 2007 to 2011. He recently wrote an op-ed featured in The Hill. It is reposted here.

At Dartmouth College in New Hampshire, there was recently a gathering of major healthcare public policy experts, senior staff of congressional health committees, and people concerned about both the health of Medicare and the health of the nation’s fiscal situation.

It was a small group with a specific goal: To come up with some doable proposals that are bipartisan in nature and can be used both to improve the delivery of Medicare to seniors and to reduce its unsustainable cost path, which is a large driver of the nation’s debt.

It was called “The Dartmouth Summit.”

Dartmouth was chosen because of the leading role Dartmouth academics have played over the years in putting together exceptional statistics and analyses regarding the way healthcare is delivered in America.

A document such as the Dartmouth Atlas, an in-depth, long-term study of the healthcare system, has become a bible of fair and accurate reporting on healthcare.

(I am a distinguished fellow at Dartmouth’s Center for Global Business and Government.)

It was important because Medicare is a critical part of the safety net for American seniors and is an extraordinary success. Yet its costs are also the primary driver of our looming national debt crisis. It has an unfunded liability of approximately $55 trillion.

Medicare is also the No. 1 provider of resources to the medical community and thus a key player in research, innovation and healthcare policy for all, not just seniors.

But it is not viable in its present structure unless we want to bankrupt future generations to pay for it.

There have been some claims by those in the political world — who constantly use Medicare, and for that matter Social Security, as political bludgeons to win reelection — that Medicare is “OK.” The claim is that the new numbers from the Congressional Budget Office show its costs are moving in the right direction and demand no corrective action.

This is inaccurate and an abuse of facts.

As the Medicare Trustees’ report has bluntly pointed out: “Notwithstanding recent favorable developments … Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation.”

This fact should be obvious to all, as it is primarily a consequence of demographics.

The senior population will eventually double its historic numbers from 35 million to 70 million, now that the baby boomers are retiring.

This generation is also going to live much longer on average than previous generations, thus requiring more care in their eighties and nineties.

The current system was not structured to have so many people taking out compared to so few paying in. It simply is not workable in its present form.

This does not mean that radical reform is needed. In fact, it does not even mean changes that negatively affect patients are needed.

The goal of The Dartmouth Summit was to come up with programmatic changes that would help deliver better care at a better price for seniors — and for the system generally.

This can be accomplished. It does not take broad-brush changes. It takes targeted, probably somewhat incremental alterations.

Obviously any success in this area is going to also require that the changes have bipartisan support. Medicare, like Social Security, is not an issue that can be effectively improved unless both sides join in the effort.

The Dartmouth Summit was not an end. It was, however, the correct way to start. It was an opportunity to gather many serious players in the room both on the policy side and on the political side with good intent and purpose.

As the summit’s efforts are formalized, a few workable ideas likely can get this critical process underway in a manner that will mute the partisan politics of the issue.

If this does happen — and it seems from early reports on the effort that it will — then The Dartmouth Summit will have started an important journey towards giving our kids an affordable future and seniors a high quality healthcare system.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the opinions of all members of the committee.