Q and A
Modern Medicare

Medicare’s boss says we’re right to be worried

Photo: Mike Morgan


Medicare/Medicaid is in the midst of a much-needed overhaul, says Mark McClellan, MD, PhD, the agency’s chief administrator. McClellan, on leave from Stanford where he is an associate professor of economics and of medicine, says that the Medicare system is sustainable only with major changes. Modernization will be a huge undertaking; the agency oversees the largest health-care programs in the world — $500 billion a year in federal spending. Paul Costello, executive director of the medical school’s Office of Communication & Public Affairs, spoke with him recently about Medicare’s health.

Paul Costello: As a physician, what’s your diagnosis of the nation’s health-care system troubles?

Mark McClellan: We’re at a time of great opportunity and great challenge. On the one hand we have more treatments in development and greater potential to prevent diseases and their complications than ever before. On the other hand, people are rightly worried about the affordability of all of this care. The good news is that we’ve got more new laws and more new ideas than ever to help us find better ways to get more for our money in health care so we can have both modern, innovative care and affordability.

What do you tell baby boomers who question the solvency of Medicare?

McClellan: Long-term sustainability of the Medicare program is a real concern. The problem we have now is twofold. First, Medicare is not delivering its health benefits in an up-to-date way. We make 95 percent of our payments for the costs of complications of diseases after they occur, while modern medicine is becoming much more oriented toward preventing diseases and their complications. The second problem is that Medicare’s financing structure does not provide enough resources to assure that all seniors through the baby boom are going to get all the benefits they need. So, we are first taking steps to bring Medicare’s benefits up to date so that we have an efficient system that provides coordinated, prevention-oriented care. Then we’re going to have to look at ways to make sure that Medicare’s financing is sustainable for the long term. The new Medicare law took some steps in that direction, for example, by creating an income-related premium for people who are on Medicare.

Why does the drug benefit program still create so much controversy?

McClellan: Well, any major change in such a sensitive program as Medicare is going to create a lot of political interest. A lot of people view Medicare along with Social Security as the third rail of politics — something you just shouldn’t touch. Well we’ve not only touched it, we’re in the process of reforming Medicare to get prescription drug coverage and modern preventive medicine.

New rules allow Medicare patients to be reimbursed for costly experimental treatments if they agree to enter studies evaluating those treatments. What do you hope to accomplish here?

McClellan: I’m hoping to get a better knowledge base for doctors and patients. For a large number of our beneficiaries, treatments in use today have questionable value. There are many examples of patients being treated inappropriately or facing medical errors. Part of the problem here is that historically seniors have been less likely to participate in research studies of medical treatments. We’re trying to change that.

The United States imports flu vaccine from Germany, Why then is it unsafe to import prescription drugs from Canada?

McClellan: The flu vaccine is brought to the U.S. within our regulatory framework, assuring its safety. The recent drug task force report clearly outlines how commercial importation from Canada could be safe, but overall national savings would likely be small. Developing and implementing a widespread commercial importation program would also require significant additional resources.


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