MEDICAL PRIVACY Medicare's Anniversary: No Time to Celebrate by Twila Brase, R.N. President, CCHC   Thirty-five years ago, Congress took away the freedom of senior citizens by making them dependent on the federal government for access to health care. Singing the praises of that decision, hundreds gathered in Washington, DC on July 12, 2000 to celebrate the 35th birthday of the Medicare program. There were speeches, the obligatory Medicare recipient, and carts of cake.   The history of Medicare's enactment bears recounting. In late 1960, Senator Clinton Anderson of New Mexico and Representative Cecil King of California introduced the King-Anderson bill for the establishment of Medicare. The country soon became embroiled in a raging public debate. Like the debate over the 1993 Clinton Health Plan, it was claimed there was a major health care crisis in America.   But Medicare was nearly defeated by one event in May 1962. President John F. Kennedy stood before television cameras addressing a standing-room-only crowd at Madison Square Garden. The very next day, Edward Annis, M.D. of the American Medical Association addressed empty chairs from the exact spot where President Kennedy stood. Annis' presentation, announced the previous day by Kennedy, was covered by only one television station--from which the AMA had purchased air time. The unanticipated response was 42,000 letters to the AMA. Two months later, the full Senate voted 52-48 against Medicare.   But the bill was only dormant. After the death of JFK, President Lyndon Johnson resurrected the bill in the name of the "Martyred President." He threatened committee members with loss of appropriations to favored projects, and with help from the Americans for Democratic Action, got the bill passed in July of 1965.   Medicine Socialized   Dr. Annis, writing in Code Blue, records comments made by Dr. Leonard Larson, then-President of the AMA: "[T]he administration's medical care proposal, if enacted, would certainly represent the first major, irreversible step toward the complete socialization of medical care. . . . The King-Anderson program does not provide insurance or prepayment of any type, but compels one segment of our population to underwrite a socialized program of health care for another, regardless of need."   Dr. Annis goes on to note that early Medicare provided taxpayer-funded health care for 16 million senior citizens who had never paid into the system, 7.7 million of whom had their own private health insurance, and most of whom already paid privately for care.   Dr. Annis predicted Medicare would increase medical costs and introduce government interference between patients and doctors. Both predictions have come true.   Payment formulas established by Congress limit reimbursements to physicians, hospitals, and home health agencies--creating a disincentive for providing care. Restrictive payment systems include RVRBS (Relative Value Resource Based System), a physician payment system based on regional pricing; DRGs (Diagnostic-Related Groups), hospital payments based on groups of diagnoses; and most recently, the Prospective Payment System (PPS), which provides fixed prepayments for anticipated health care services, regardless of actual costs. PPS covers in-hospital care, hospital outpatient services, skilled nursing home care, and home health services.   In essence, prospective payment systems force every hospital, skilled nursing facility, and home health agency to act like an HMO. HMOs and other managed care organizations are paid fixed premiums by enrollees and often pay physicians a fixed amount per enrollee per month in advance of services provided, regardless of the cost of care received. This is called capitation. Since the PPS uses capitation as well, hospitals, home health agencies, and skilled nursing facilities may soon join HMOs in the business of denying care. Such formulas actually move Medicare recipients into managed care even if they're not in an HMO--or refuse to join one.   Unfortunately, the hands of senior citizens are tied. Even if Medicare recipients are willing to pay more, Medicare limits what they are allowed to pay, and Congress forbids payments for services denied by Medicare.   Government officials publicly cheer the report that Medicare will be solvent until 2025 . . . but they hide the fact that the Medicare Trustees Report predicts it could be insolvent as early as 2012. For Medicare to continue as-is requires either sharp increases in taxes or severe rationing of care.   Congress has the power to solve the Medicare crisis by enacting policies that reduce the need for Medicare, including the facilitation of lifelong insurance policies, a repeal of the prohibition on payments by seniors, and encouraging the purchase of Medical Savings Accounts. Only then can we all celebrate.   Written for the Heartland Institute's Intellectual Ammunition, September/October 2000. Citizens' Council on Health Care 1954 University Avenue West, Suite 8, St. Paul, MN 55104 Phone: 651.646.8935 / Fax: 651.646.0100, e-mail