The Medicare crisis: What does it mean for nephrology care? Allen R. Nissenson MD Professor of Medicine Director, Dialysis Program David Geffen School of Medicine at UCLA Los Angeles, CA Thomas Golper MD Professor of Medicine Vanderbilt University Medical Center Medical Director Medical Specialties Patient Care Center Nashville, TN

Book: Running on Empty by Peter Peterson, former Commerce Secretary under Richard Nixon Peterson points out the entitlement program in the US is in trouble; promises could not be kept. Suggests changes on every level: –A reduction in actual entitlements –A major increase in taxes Context: budget crisis for the US government  How does this translate into action on the nephrology side? Thomas Golper MD

“We’ve got our work cut out for us” Current treatment opportunities are very advanced but very expensive, There is a clash between the demand for care, the capability of delivering care, and a government funding crisis. This constitutes a major crisis: –It is getting attention on the social security level, but this does not compare to the Medicare and Medicaid problem. Thomas Golper MD

Medicare: Current crisis Yearly, the amount of money coming in is less than the amount paid out. If this trend continues, the amount of Medicare money will soon drop to zero. –The government is trying to find a way to cut down the cost of Medicare, a very difficult task from a macroeconomic point of view. Options: 1.Provide fewer services For end-stage renal disease this could mean rationing 2.Reduce the payment per unit of service delivered Neither are palatable options, but there either has to be more money going in or less money coming out. Allen Nissenson MD

Medicare: Current crisis (cont.) Will get worse when the Part D (drug) benefit will go into effect next year. The ESRD program only involves about 0.6% of the Medicare population but expends about 6.5% of all Medicare dollars. –This amount continues to rise as patients on dialysis are getting older and sicker. Allen Nissenson MD ESRD: end-stage renal disease Thomas Golper MD

Critical structural problems Part A: inpatient services Part B: outpatient services including dialysis facilities and physicians These two parts of Medicare are completely segregated: –Money from Part A can’t be invested in Part B, although improved outpatient care would decrease hospitalization and ultimately decrease cost in Part A. –This segregation creates an additional barrier to overcome. Allen Nissenson MD

Merging Part A and Part B: The politics The RPA leadership met with the minority staff from the finance committee working with Senator Baucus who had introduced an ESRD quality bill last year. Discussion focused on the problem of Part A and Part B segregation. Their answer: Part A and Part B are the “third rail of Medicare” just as social security seems to be the “third rail of politics” in America: people don’t want to touch it. RPA: Renal Physicians Association Allen Nissenson MD Thomas Golper MD

Merging Part A and Part B: The politics (cont.) The ability to fund programs is dependent on the ability to take the financial savings, which come out of Part A, and apply them to Part B throughout the entire Medicare program, not just for ESRD. –It’s a huge issue that no one wants to tackle. CMS is currently doing a series of demonstration projects which use a global capitation payment system: a de facto way of combining the different pools into one. –There may be a way of combining the parts without specifically restructuring Medicare. Allen Nissenson MD CMS: Centers for Medicare & Medicaid Services

History of withheld information The former CMS administrative leader, Thomas Scully, has withheld information from members of congress who were voting on the bill for Part D in December –The politicization of Medicare is a concern, as is the refusal of society and government to face up to these issues. Thomas Golper MD

No single solution In his book, Peter Peterson points out that “the solution will have to come from everywhere.” Need to: –Challenge entitlements –Increase the age of retirement –Reduce entitlement payments –Raise taxes in two ways: Increase the total dollar amount eligible for both Medicare and social security tax Increase the rate Thomas Golper MD

The future of Medicare Two comments –Optimistic about the new administrator of CMS, Mark McLellan, a physician and a health services research expert; he seems to be very rational and understands medical problems, although, as an administrator he is not devoid of political considerations. –Book: Nonzero: The Logic of Human Destiny, by Robert Wright — should come to the attention of CMS Allen Nissenson MD

Nonzero: The Logic of Human Destiny by Robert Wright Debunks myths that are paralyzing Medicare: –Everything needs to be “budget neutral”. –Everyone is operating in the “zero-sum game”. –If you invest in one place, you need to take the money from somewhere else in Medicare and always stay neutral. Wright points out that this philosophy is ubiquitous but untrue. We must invest in healthcare: if we improve the quality of health in the US by investing in better care the overall cost for the system will go down, and everyone wins. Allen Nissenson MD

Future topics for discussion CMS programs that will impact the outcomes of patients with ESRD and CKD: –Immediate programs to be implemented by CMS and that will directly affect the funding and care of these patients. –Proposals that have not been implemented and are being proposed for the next 2-3 years. Allen Nissenson MD CKD: chronic kidney disease Thomas Golper MD