Medicare adviser urges more than ‘lip service’ on future of program

As chairman of the influential Medicare Payment Advisory Commission (MedPAC), a federal panel tasked with recommending what the program should pay doctors, hospitals and other providers, Glenn Hackbarth is on the front lines of the complex policy issues facing the giant healthcare program. In the same capacity, he frequently is called to testify before Congress, which has provided him with a political perspective on Medicare.

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Q: When politicians debate Medicare and healthcare issues generally, what things do you think get overlooked?
A: The biggest thing right now is the long-term financial problems facing Medicare. It’s not overlooked; people pay lip service to it at times. But nobody is really addressing the issue in a substantive way. That’s a matter of growing concern to me, and the commission as a whole, because the longer you wait, the more difficult this problem is going to be to solve. We’re really concerned about the lack of attention given to that. Regrettably, there is a lot of discussion about a lot of different topics in healthcare. What’s missing is not the discussion; what’s missing too often is the action. Particularly with the presidential campaign now, as you know, healthcare is very prominent and a lot of important issues are on the table. It’ll be interesting to see whether we are prepared to actually do something. Difficult choices will be required and a lot of consensus building required.

Q: Politicians routinely use MedPAC’s recommendations for Medicare payment cuts as political cover for their own agendas or alternately ignore them completely. What do you do to maintain the integrity and independence of MedPAC’s work when everything connected to Medicare is so politicized?
A: At times, our recommendations are used that way but, you know, I don’t think that that is the norm. … We know that the political process has its own internal dynamics and respect those. ... One of the messages that I repeat over and over again with the commissioners is that, although commissioners are appointed because of their expertise — for example, because they run a hospital or they’re a physician in practice — our role as the commission is to set aside those interests at the door. Bring the expertise but set aside the interests and not represent any particular interest group as we formulate a recommendation. And I think commissioners do a remarkably good job of that, often voting against what is the interest of their particular part of the health sector. That, in turn, has given MedPAC a reputation for independence and candid advice to Congress.

Q: MedPAC’s findings that Medicare Advantage costs more than traditional Medicare have been used as fodder by Democrats looking for budgetary offsets to finance other priorities. Are there things about what the commission said that you think have been lost in this debate?
A: What we want to be clear to all the parties [is] that, in fact, we strongly support the basic idea of Medicare Advantage, which is to offer beneficiaries the opportunity to enroll in private health plans. … Having said that, we do think that private plans ought to be offered on a level playing field. That is, that they ought to be paid the same amount as Medicare would have spent on behalf on the same beneficiaries. … The flaw that we see in Medicare Advantage is in the [payment] benchmarks that are set for the plans, and those benchmarks are not market-set prices. They are prices that were set by Congress as part of a political process. So when we criticize Medicare Advantage, we’re not criticizing the market and a competitive system; we’re criticizing a politically set series of benchmarks.

Q: Congress is working on a short-term fix to a scheduled 10 percent pay cut to doctors in Medicare but not developing a real solution to the flawed “sustainable growth rate” (SGR) payment formula at the root of the problem. MedPAC has made numerous recommendations about rectifying this. What do you think it will take to get to a resolution?
A: The barrier in the way, of course, is the budget baseline created by the SGR mechanism. That baseline is so low relative to current payments that it’s really a barrier to trying to do something sensible to reform physician payments. … Congress asked us to do a report on the SGR last year. The single most important message in the report that we sent back was: Look, there is no silver bullet for this. Given the budgetary hole created by the SGR, there is not a policy that’s going to hit that budget target, and thus have no incremental expenditures and be reasonable policy. It’s a null set.

Q: Healthcare industries that are financially dependent on Medicare anxiously await MedPAC’s annual payment update recommendations. How do lobbyists attempt to influence MedPAC commission members?
A: There’s a lot of interaction that occurs. The MedPAC staff regularly meets with representatives of the various provider sector organizations. I do as well, though on a much more limited basis. … In addition to that, all of the commissioners get a lot of mail from the various organizations. They send often quite lengthy letters and papers laying out their point of view on various issues. In some cases, at least, they will call individual members of the commission to present their point of view. There’s a lot of exchange that goes on behind the scenes.