1. Is Medicare Doomed? Not if We Continue to Focus on Improving System Performance Stuart Guterman Senior Scholar in Residence AcademyHealth National Committee to Preserve Social Security and Medicare 10K/Day: Medicare’s Future as 10,000 Americans Turn 65 Every Day Boston, MA June 7, 2016

2. As it Enters its Second 50 Years, Medicare Faces Several Challenges Rising program spending. Fragmented benefit package. Growing number of beneficiaries with complex care needs.

3. Projected Annual Growth Rates for Total Medicare Spending, GDP, Medicare Enrollment, Spending per Beneficiary, and GDP per Capita, 2014-2024 Note: GDP = Gross Domestic Product. Source: Centers for Medicare & Medicaid Services, Office of the Actuary. NHE Projections, 2014-2024—Tables; available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html

4. Beneficiaries with Multiple Chronic Conditions Account for a Disproportionate Share of Spending in Traditional Medicare (2009 Data) Source: Centers for Medicare & Medicaid Services. “Chronic Conditions Among Medicare Beneficiaries Chartbook: 2012 Edition.”

5. But Progress is Being Made New innovations are being developed, implemented and tested—in both the public and private sector. Health care delivery is changing. Program spending has slowed.

6. CMS Innovation Center’s Focus Areas and Selected Initiatives Accountable Care  Medicare Shared Savings Program  Pioneer Accountable Care Organizations (ACOs)  Next Generation ACOs Bundled Payment  Bundled Payment for Care Improvement Initiative  Comprehensive Care for Joint Replacement Model Primary Care Transformation  Comprehensive Primary Care Initiative  Comprehensive Primary Care Plus  Advanced Primary Care Practice Demonstration (Federally Qualified Health Centers)  Independence at Home Demonstration  Multi-Payer Advanced Primary Care Practice Demonstration Initiatives Focused on Medicare-Medicaid Enrollees  Financial Alignment Initiative for Medicare- Medicaid Enrollees  Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents Initiatives to Accelerate the Development and Testing of New Payment and Service Delivery Models  Accountable Health Communities Model  Health Care Innovation Awards  Health Plan Innovation Initiatives  State Innovation Models Initiative  Maryland All-Payer Model Initiatives to Speed the Adoption of Best Practices  Healthcare Payment Learning and Action Network  Innovation Advisors Program  Partnership for Patients

7. Congressional Budget Office: Ten-Year Medicare Spending Projections, As of Jan. 2010 and Jan. 2016 Projected Medicare Spending ($ billions) Projected Medicare spending in 2020: As of January 2010: $1,038 billion As of January 2016: $ 845 billion Source: Analysis of Congressional Budget Office projections of Medicare outlays, from Budget and Economic Outlook, various vintages.

8. Take-Away Messages Medicare has been successful in achieving its basic mission: providing access to care and stable coverage to aged and disabled Americans. An aging population and the rising cost of health care have focused increased attention on controlling health spending while improving the quality of care and population health. As the country’s largest health care purchaser, Medicare can play an important role in improving quality, promoting coordinated care, and controlling costs—both for its beneficiaries and throughout the health system. 8