Executive Summary

The American Nurses Association (ANA) believes that the Medicare program is critically important to older and disabled Americans and their families. The program is, however, facing serious long-term financial challenges which are a result of the combined effect of an aging America, greater longevity, and increasing health care costs. ANA's recommendations are intended to ensure that the Medicare program remains viable and able to provide beneficiaries with accessible, affordable, high quality health care.

ANA believes that Medicare must remain a broad-based social insurance program that is available to all eligible individuals regardless of income. To ensure that Medicare is able both to deliver high quality health care and remain financially sound, the Medicare program must expand from the traditional "medical model" of care, where the emphasis is on treatment of disease and in which there is little coordination of care among providers, to include beneficiary-focused coordinated models of care, which focus on primary health care, prevention, wellness, and early intervention for beneficiaries. To that end, ANA recommends a number of specific structural and benefit changes:

  1. combine Medicare Part A (hospital fees) with Medicare Part B (physician fees) and have a single deductible amount ($500);

  2. add a $3,000 "stop-loss" provision (a $3,000 cap on beneficiaries' annual out-of-pocket payments, including deductibles and co-payments);

  3. eliminate Medigap;

  4. reduce the age of eligibility for Medicare with a voluntary buy-in option for persons aged 62-64, with a similar option for displaced workers aged 55-64;

  5. add prescription drug coverage (with a $250 deductible and a 20 percent co-payment);

  6. ensure parity in payment for mental health services;

  7. expand home health coverage to avoid institutionalized health care;

  8. include additional preventive/screening services (such as wellness programs, domestic violence screenings, and dental care) with no co-payment or deductible;

  9. employ beneficiary-focused coordinated models of care, such as:

    • using nurse case managers to manage/coordinate care and prevent unnecessary or inappropriate inpatient hospitalizations, emergency room visits, and nursing facility admissions;

    • expanding and incorporating Community Nursing Organizations (CNOs), which receive capitated payments for community nursing and ambulatory care services provided to Medicare beneficiaries;

    • implementing disease management programs for beneficiaries with chronic conditions;

    • expanding nurse managed clinics, which provide accessible and affordable patient care, especially in underserved areas;

    • providing improved end-of-life care, including the appropriate use of pain medications/palliative measures, and easier access to hospice benefits; and

    • encouraging utilization of preventive and self-care measures.

ANA recognizes that the Medicare program will need additional revenue to address both its projected financial situation and the additional costs incurred by adopting ANA's proposed enhancements. The demographics of the next 50 years demand a reallocation of the Federal budget; just as we build schools when the population of children increases, so should we acknowledge and address the increasing health care needs of an aging, older society through additional Federal spending. In addition to changes in the Federal budget, ANA recommends raising the additional needed revenue by:

  • extending certain elements of the Balanced Budget Act of 1997, including continuing update reductions beyond 2002;

  • transferring DRG payments from acute care hospitals to account for increased post-acute care;

  • integrating physician/other practitioner and facility payments for inpatient care;

  • using competitive bidding and competitively set rates;

  • reducing taxpayer subsidies for those beneficiaries who are able to pay more; and

  • raising new or increased revenue through taxes or the budget surplus.

ANA believes that significant long range cost savings will be achieved by moving away from Medicare's costly "medical model" and toward nursing's emphasis on early intervention, prevention, and primary care. However, ANA also recognizes the need to identify specific short-run revenue sources to ensure the solvency of the program. In Appendix B, ANA has included cost estimates which address the cost savings and proposed revenue needed to fund this proposal.

Preface

The American Nurses Association (ANA) is pleased to present this proposal to reform the Medicare program. Nurses are uniquely positioned to offer a plan to address the problems facing Medicare, and -- as both the caregivers and advocates of patients in and beyond the Medicare program -- they understand the health care system from both the health professionals' and patients' perspective. As the nation's largest organization representing professional nurses and as the first health professionals' association to endorse the creation of Medicare in the 1960s, ANA has an unparalleled record of support for this critically important program.(1)

ANA hopes that the work of the National Bipartisan Commission on the Future of Medicare will, prompt a national debate about necessary reforms to the Medicare program. Nursing has much to offer in this debate and looks forward to working with policymakers, members of Congress, and the Administration to ensure that Medicare's promise to future generations is fulfilled.

Introduction

ANA believes that Medicare must remain a broad-based social insurance program that is available to all eligible individuals regardless of income. As a government-sponsored program that insures the nation's elderly and disability populations, Medicare faces some unique and difficult challenges, particularly in its financing. But while the fiscal problems facing the Medicare program demand immediate action, it is clear that Medicare is experiencing many of the same problems and constraints that affect the rest of the health care system. In fact, the long-run cost trends for Medicare and private insurers are remarkably similar: both are driven by system-wide factors such as rapidly advancing medical knowledge and the increasing availability of procedures, resources, equipment (including high-tech equipment), and services.

Recent trends toward "managed care" as a means of saving costs have frequently had significant adverse effects on high quality health care and on the health system in general. Too often, "managed care" has really meant "managed costs" -- and the coordinated care, early intervention, and patient choice so imperative to a patient's well-being has been lacking. ANA believes that incorporating beneficiary-focused coordinated models of care into the nation's health care system will move the system away from "managing costs" and toward "managing care." These beneficiary-focused coordinated models of care (which are described in Section V) -- many of which have been developed and strengthened since the inception of Medicare -- can play an important role in improving Medicare, by both enhancing the quality of care and reducing its projected fiscal problems over time.

ANA believes that employing appropriate beneficiary-focused coordinated models of care, together with a number of other important systemic reforms, will result in better, more responsive care and lower costs while maintaining the basic operation and benefits of the program.