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The Confused Policies of Medicare's Drug Plan

The new Medicare prescription drug plan is complex, confusing, and irrational, according to health policy expert Jonathan Oberlander. A month after the rollout of the new Medicare prescription drug plan, many seniors are finding it difficult to get the drugs they need.


Other segments from the episode on January 31, 2006

Fresh Air with Terry Gross, January 31, 2006: Interview with Jonathan Oberlander; Interview with Christine Cassel.


DATE January 31, 2006 ACCOUNT NUMBER N/A
TIME 12:00 Noon-1:00 PM AUDIENCE N/A

Interview: Dr. Jonathan Oberlander, author of "The Political
Life of Medicare," discusses the new Medicare prescription drug

This is FRESH AIR. I'm Terry Gross.

It's been a month since the new Medicare prescription drug plan went into
effect. Tonight, in his State of the Union address, President Bush is
expected to call for further changes in how Americans pay for health care. My
guest, Jonathan Oberlander, the author of the book, "The Political Life of
Medicare." He's an associate professor of social medicine in the School of
Medicine at the University of North Carolina in Chapel Hill.

The president is advocating private medical accounts. Would you describe what
that means?

Dr. JONATHAN OBERLANDER: The idea is that people will buy high deductible
health insurance. High deductible meaning at least $2,000, and then you can
put money aside in a tax-sheltered health savings account, and you would use
that money to pay your routine medical expenses.

GROSS: What are considered to be some of the benefits and some of the
shortcomings of this approach?

Dr. OBERLANDER: Some of the benefits of it include the fact that it's
portable, meaning now when you lose your job, you lose your health insurance.
With a health savings account, you can take that money and you can move it
with you to your next job, or if you don't have a job, you can still access
it. Another benefit would be that, according to at least the folks who are in
favor of this, people feel the costs of medical care more directly, they say
they have more skin in the game. In other words, right now, if you're covered
by comprehensive health insurance you don't have a lot of incentive to shop
around for the lowest-cost care.

GROSS: And what are some of the problems?

Dr. OBERLANDER: Well, I think there are some very serious problems with this.
One is it's a very regressive way to finance medical care, because what you're
doing is you're really shifting the burden to those who use medical care the
most. So people who have chronic illnesses, who are really sick, they're
going to be paying out of those high deductibles year after year after year,
and they're not going to build up very much money, if any money at all, in a
health savings account. Another disadvantage of this is that I really don't
think it's going to control costs very well. Ten percent of Americans account
for 70 percent of spending on medical care, and you know, their medical care
utilization is not going to be influenced by the introduction of co-payments
and deductibles, so it's probably not going to do a lot.

A final thing I think it important is it could have a potentially very
damaging effect on the risk pool. One of the problems with American medical
care is it's very, very fragmented already, and what you're doing with health
savings accounts is you've created a form of insurance that is beneficial for
people who are healthy. If those Americans pull out of the regular insurance
market and join health savings accounts, the rest of Americans are going to be
in insurance plans that become increasingly expensive.

GROSS: The president in his State of the Union address is expected to also
speak in support of tax deductions for out-of-pocket medical expenses. What
does that mean?

Dr. OBERLANDER: Right now, there is a tax advantage to getting health
insurance through your employer, and a lot of people have pointed out that
it's really unfair for those that can't get health insurance through their
employer that they can't enjoy the same tax deductions. So what they're
proposing is to make this more generalizable and sort of level the playing
field. I think it's an interesting proposal. The problem with it is it's
really not going to do much for the uninsured and it's not going to do much
for health care spending.

GROSS: Does this benefit people who are in high tax brackets more than it
benefits people who are in lower tax brackets?

Dr. OBERLANDER: Yes. And in general, health savings accounts, back to what
we were discussing earlier, are a much better deal for the healthy and the
wealthy, and represent another form of a sort of tax shelter. Because they're
in higher tax brackets, they can put money away in their health savings
account that is tax-sheltered, and so they benefit more than folks at the
lower end of the income distribution. They're also going to be in more of a
financial position to do that.

GROSS: Let's talk about the new prescription drug benefit. You've written a
book on the politics of Medicare. How would you describe how the prescription
drug benefit is doing so far?

Dr. OBERLANDER: Not well. It's been a confusing start, there's been a lot of
chaos, a lot of serious problems and, frankly, enrollment is not very good so

GROSS: I'm interested in what you've learned about what happened behind the
scenes in the drafting of this prescription drug benefit. There have been a
lot of questions raised about the role that lobbyists played and how that
affected the final writing of the bill. Would you summarize what we know so
far about that?

Dr. OBERLANDER: Well, I think the big picture to keep in mind is that this
bill was written in large part for the prescription drug industry in the
United States. The pharmaceutical industry for many years has opposed a
Medicare drug benefit because they were worried that once the government got
involved they would start setting prices. And so the terms on which this
legislation was finally enacted were meant to be very friendly to the drug
industry in order to get their cooperation with the program. Now, in terms of
the actual drafting of the bill, there was a question--serious question of
conflict of interest; you had the former head of the agency that runs Medicare
and Medicaid, Tom Scully, who right after the legislation was finished, left
the government in order to become a health care lobbyist, yet another member
of Congress who was on a committee that oversaw the writing of the legislation
who went to become a head of Pharma, which is the trade group for the
prescription drug industry. So there's no question that lobbyists were
involved in this. And again, the big picture is that this bill was written on
terms purposely that are very friendly to the drug industry.

GROSS: What is friendly about the terms of the prescription drug benefit part
of the plan?

Dr. OBERLANDER: The two most important aspects of this legislation that make
it a good deal for the industry, at least in the short run, is, number one,
the way this benefit works, you have to get it from private insurers, you have
to get it not from the government, the government subsidizes you, but you've
got to pick a private plan, and that's very different from the way the rest of
Medicare works. The rest of Medicare is directly operated by the federal
government. The second element of the bill that is really friendly to the
industry is the bill prohibits Medicare from negotiating drug prices, and this
is something that, of course, states do in the Medicaid program, the Veterans
Administration does. Medicare would have tremendous power, tremendous market
power; there are 42 million Medicare beneficiaries that would be purchasing
drugs on behalf of, and that marketing power is precisely why the government
was prohibited from directly negotiating prices.

GROSS: Do you think that the new Medicare prescription benefit represents a
change of philosophy in how Medicare is administered?

Dr. OBERLANDER: Absolutely. When Medicare was enacted in 1965, it reflected
the politics of the time. You know, I always call it a problematic flower
child, it was a very liberal program that was based on a philosophy of
universalism, of social insurance, a philosophy where the federal government
was really responsible for the benefit. And, you know, sometimes we talk
about single-payer health insurance in the United States, and Medicare really
is a single-payer program where the government is the one responsible for the
insurance. What we have seen in Medicare politics over time is the rise of a
market model that believes, instead of government running insurance, the
market should run insurance, and government's role is simply to subsidize
beneficiaries to go out in the private insurance market and choose their own
plans. And this is really a fundamental shift in Medicare.

GROSS: Who's advocating that, and why do the advocates want that?

Dr. OBERLANDER: Generally, conservatives and Republicans support that vision
of the Medicare program. They argue that, you know, the federal government
shouldn't be setting prices, it shouldn't be making choices on behalf of
beneficiaries who have a better idea of what they want. They think it's a
more efficient and a cheaper way to provide health care to the elderly and
disabled in Medicare. Also in favor of having Medicare go in that direction
is, of course, the insurance industry, because there are 42 million
beneficiaries in Medicare right now; by 2030, that's nearly going to double to
77 million, that's a huge market and a potentially very profitable market.
And if you move Medicare in a private direction, they stand to make a lot of
money from that decision.

GROSS: One of the problems with Medicare is that as the baby boom begins to
retire, it's going to pose a really overwhelming expense, far different from
the expense when Medicare was created in the mid-'60s. So would privatizing
the program and bringing, you know, private insurance companies into it solve
the problem of the medical expense posed to the federal budget by the
retirement of the baby boom?

Dr. OBERLANDER: No. You know, there is no doubt that there's an immense
challenge ahead in Medicare. In many ways, the financing crisis, so-called
crisis in Social Security, is really a modest problem. Medicare's financial
problems are much greater in scope, much greater in complexity. At best,
those reforms would save a very modest amount of money. I'm skeptical that
they would do even that. There's no way to fund Medicare into the future and
double its population without putting more money into the program, and that
means higher taxes, there's just no way to do it. On the other hand, we need
to recognize that Medicare's financial problems are not really of Medicare's
own making. What this reflects is broader problems in the American health
care system. We have a very, very expensive health care system, 16 percent of
the American economy goes to health care, which is much more than any other
industrialized democracy in the world. If we don't take care of health care
spending in the rest of the health care system, there is no way we're going to
be able to control costs in the Medicare program.

GROSS: My guest is Jonathan Oberlander, author of "The Political Life of
Medicare." We'll talk more after a break. This is FRESH AIR.


GROSS: My guest is Jonathan Oberlander, the author of "The Political Life of
Medicare." He's an associate professor of social medicine in the School of
Medicine at the University of North Carolina, Chapel Hill.

There's the question of choice. The prescription drug benefit offers a lot of
choices to people who are eligible. What do you feel are the lessons so far
in the role of choice in a health care program for the elderly?

Dr. OBERLANDER: This program is really a test of consumer-driven health care,
which is something that the president wants to pursue more broadly. And the
idea of consumer-driven health care is we need to make medical care more like
every other product that consumers go out and they shop for and they look
carefully at the benefits and the costs and they select, just like they would
a computer, the health insurance plan they want the most. And I think the
lesson--we're early on here--but the lesson so far is you can have too much
choice and it can be too confusing. You know, this is really--this program is
an economist's dream to have all these Medicare beneficiaries making these
decisions, making these choices. But in many respects, it's a patient's
nightmare. In--where I am in North Carolina, there are 53 different plans
that beneficiaries can choose from, and it's a very, very complicated choice
that requires not just a lot of patience, but a lot of computer skills. And I
think what you have is a theory in search of a population, that theory being
consumer-driven health care, and they found the wrong population. And so far,
only three and a half million Medicare beneficiaries have signed up
voluntarily for this program, which really augurs for big trouble down the
road. And that is, in large part, because they are paralyzed by too much

GROSS: The Medicare prescription drug benefit program is brand new, the
problems haven't been ironed out yet, but what provisions are there for
ironing out the problems? Do you expect that there will be some kind of major
or minor reform as we see how the program's actually shaking out?

Dr. OBERLANDER: Some of the problems that are going on right now are simply
because this is a new program. And there have been computer glitches, a
miscommunication between the federal government and insurers, problems with
pharmacies. And I think a lot of those problems are going to be ironed out
over time as people gain more experience with this benefit. But I think this
is not just a matter of bad planning, what you have here is a bad theory, and
it's going to be very hard to make this work smoothly, this vision of
consumer-driven health care for the elderly and for the disabled. In terms of
whether this benefit is going to be changed or whether we can expect reform,
I'm not so sure. You know, a lot of people say to me, `Well, the federal
government's going to have to step in, this is such a mess, this has to
change,' but the original Medicare program had a lot of holes in it, and it's
been 40 years and it really hasn't changed very much. And a lot of people
have a lot invested to make this work. It would be very expensive to change
some of the provisions. So I'm actually not that optimistic that, at least in
the short term, we're going to see much change. What I do know is this: this
is a very unstable program in an unstable market, and it's likely that a lot
of the plans, private plans, that are offering insurance coverage are going to
leave that market. So it may look very different five years from now.

GROSS: You think there might be fewer programs and, therefore, fewer choices
and a less confusing environment?

Dr. OBERLANDER: Absolutely. And the plus side of that is it'll make the
choice be easier. The down side is there won't be as much competition on the
basis of price, and so the premiums for the plans might get more expensive
over time.

GROSS: There are a lot of people who are on Medicaid who were automatically
switched to the new Medicare prescription drug benefit. Would you explain
that automatic switch?

Dr. OBERLANDER: Yeah. This is a population that we call the dual eligible
population. So in other words, seniors and Americans with disabilities who
have Medicare, but they're poor enough that they also have qualified for
Medicaid. And historically, Medicaid has paid their prescription drug costs,
so they already had drug coverage. What has happened as a result of this bill
is that entire population, about six million, is being switched over to the
Medicare program. And so they were supposed to be automatically enrolled in
private insurance plans, and in fact they were randomly assigned, which it
turns out to be a big problem, to various plans across the states. And one of
the central problems that we've seen in the Medicare drug bill so far is that
assignment process has not gone very well.

You have these low-income dual eligibles who are often very, very sick and
include folks with developmental disabilities, mental illness and so forth,
showing up at pharmacies and their coverage isn't working the way it's
supposed to, they're being told they have to pay the 250-dollar deductible and
very high co-pays, none of which they're supposed to pay and none of which
they can afford. And there have reportedly been cases of people who had to be
re-hospitalized because of lapses in their medication and so forth. Of all
the problems with the Medicare bill so far, I would say this is the worst.

GROSS: Is anything being done to address this problem?

Dr. OBERLANDER: To their credit, a number of states have stepped up to the
plate. I think about half the states now are stepping in and paying
medication costs for this population that has been lost in the shuffle,
including California and Maine. And it's really to the credit of the states
that they're doing this, you know, they are coming to the federal government's
rescue. And the Medicare program is the federal government's responsibility,
and to think that in 2006 you have to have Maine and California and a bunch of
other states declare emergencies and step in to make this program work, it
just never should have happened.

GROSS: Since each state has its own insurance programs in this new Medicare
prescription drug benefit system, what happens if you move? You know, a lot
of older people reach the point in their health care where they're no longer
independent, and they move to another state to be closer to children or
grandchildren. So if you are elderly and you do move to another state and
that state doesn't have the prescription plan that you've purchased, what

Dr. OBERLANDER: There's this special provision that if you move, you're going
to have a chance to re-enroll. And, you know, there's an assorted number of
plans, I can't remember the exact number, that are national in scope. But if
you do move, and say you get tired of those winters up in Pennsylvania and you
want to come to Florida and have some sunshine, you'll have a chance to

GROSS: But you have to go through the whole investigation process over again
of, you know, being a good consumer and finding a new plan, doing all the

Dr. OBERLANDER: Yes. And, you know, I think there's a broader point here;
I'm not sure this is how we want elderly Americans spending their retirement,
but having gone through this whole mess, and right now people have until May
15th to pick a plan, come November 15th they're going to have to do it all
over again for next year, and it's likely that there are a number of people
who are going to have to switch plans, because those plans aren't going to be
in business anymore.

GROSS: So you're saying that every year there's an open enrollment, a period
in which you can re-up in the plan that you're on, or start the investigation
process over again and choose a new one?

Dr. OBERLANDER: That's right. The fun has just started.

GROSS: One of the ways people are being advised to choose a prescription drug
benefit plan is to figure out what medications you need and to find a plan
that reimburses well for those medications. But what about if you develop a
condition that you didn't have when you chose the prescription drug plan?
What if your needs change after you choose?

Dr. OBERLANDER: This is one of the many reasons why shopping for health
insurance is not like shopping for a computer or a car. Your needs are going
to change during the course of the year, and if all the sudden you get a new
illness that requires drugs, you're going to have to hope that it's covered by
the formulary under the plan that you're on. And if it's not, then you're
going to have to work really hard with your doctor to find an appropriate
substitute, or you're going to have to wait until next year. The other really
bizarre provision of this is plans can drop medications during the course of
the year; as long as they give 60 days notice, they can actually change their
formulary. So you sign up for a plan because they're covering a certain
medication, a few months later they may not be covering that medication

GROSS: Are there any provisions in the Medicare bill to help older people
decide on a plan? I mean, let's be honest, a lot of older people are having
memory problems or vision problems or they don't have a computer, and it's
going to be very--it has been very difficult for many of them to figure out,
you know, how the plan works and which insurance company to pick. Outside of
asking children and grandchildren, is there any help provided for in the bill

Dr. OBERLANDER: One of the problems is the agency that runs Medicare, the
Center for Medicare and Medicaid Services, is really under-staffed, and they
really don't have the finances, they don't have the personnel to provide what
you need, which is one-on-one counseling to get this done. They have made
provisions to fund state agencies and community groups to provide counseling,
and a lot of those community groups and state agencies are the best source of
information on this bill, and I think they're doing a fabulous job, but
they're not enough, they're just not enough for 42 million people.

GROSS: The prescription drug plan obviously has some problems. Do you agree
that it's unrealistic to expect that the bill will be re-written in a major
way, that we can expect a major overhaul in the near future?

Dr. OBERLANDER: Yes. In the short term, too many people are invested in this
bill; politically, too many people are invested in the program. Financially,
over the long term, though, I think it's a bit more unstable and hard to see
where it's going to go.

GROSS: Jonathan Oberlander, thank you very much for talking with us.

Dr. OBERLANDER: Thank you for having me on.

GROSS: Jonathan Oberlander is the author of "The Political Life of Medicare."
He's an associate professor of social medicine in the School of Medicine at
the University of North Carolina, Chapel Hill. I'm Terry Gross, and this is

(Soundbite of music)


GROSS: Coming up, Dr. Christine Cassel, author of the new book, "Medicare
Matters: What Geriatric Medicine Can Teach American Health Care." She
specializes in geriatric medicine and says there are aspects of Medicare that
are incompatible with the needs of older patients.

(Soundbite of music)


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Interview: Dr. Christine Cassel, author of the book "Medicare
Matters: What Geriatric Medicine Can Teach American Health Care,"
discusses elderly patients' reaction to the new Medicare
prescription drug plan

This is FRESH AIR. I'm Terry Gross.

My guest, Dr. Christine Cassel, has written a new book about Medicare from her
perspective as a doctor who has spent her career caring for Medicare patients.
She's also dealt with Medicare as the daughter of elderly parents who have
since passed away. Cassel is a specialist in geriatric medicine and the
president of the American Board of Internal Medicine. Her new book is called
"Medicare Matters: What Geriatric Medicine Can Teach American Health Care." I
asked her first about reactions from older patients to the new Medicare
prescription drug plan.

Dr. CHRISTINE CASSEL: Everyone is confused. Everyone wishes there weren't so
many choices. It's interesting, you know, many of the advertisements that you
hear about health care in general are about choice, and people have come to
think that choice equals quality in health care, but in fact, there is such a
thing as too many choices, particularly when they aren't that really relevant
to what it is that you need.

GROSS: What about from your perspective as a physician, what is--how is the
new plan functioning?

Dr. CASSEL: It worries me, because I'm afraid that people who need it the
most are going to have the most trouble getting it. That is to say people of
low income, people who are confused or don't have good cognitive function,
people who have major mental health needs, for example, and those are the
people for whom this model of choice doesn't really make any sense. So
they'll get arbitrarily assigned to some plan and, as I'm sure you've heard,
many of them are falling between the cracks, the computer glitches haven't
quite worked, etc. The other thing that is likely to really be a problem for
people with any serious chronic illness, and particularly the Medicare
patients who I am familiar with, who have multiple chronic illnesses, is the
complexity of this doughnut hole arrangement, the fact that you--a certain
amount is covered up to a certain amount, and you get to that 2200 amount and
then you get no coverage, and then when you get to 5,000 you get more
coverage. Very confusing. It's going to operate like that year after year,
the way it's currently designed. So there isn't a sort of a logical, stable
approach that people can expect.

GROSS: Do doctors have to do any more administrative work with this
prescription plan?

Dr. CASSEL: Absolutely. The first thing doctors have to do is answer
patients' questions. Now, we have a problem with that in our health care
system anyway, because there are so few physicians, generally primary care
physicians, who are willing and able to actually answer patients' questions
and their family's questions; most doctors are specialists, they see them just
for this problem or that problem, and they aren't equipped to answer your
questions about the drug benefits. You know, another thing that is really a
problem about this, I'm sure you have seen the stories in the press about
people--baby boomers like ourselves, helping their parents get online, figure
out which ben--which, you know, of the plans is best for them. And the way
you do that is you put in all the medications you're currently on, and then it
runs an analysis and tells you what's the best deal. Well, that assumes that
those are going to be the drugs you're on for the rest of your life, and
nothing could be a more unrealistic assumption in this day of rapidly evolving
medical science. Plus, as we age, we know that things happen and your medical
problems are likely to get more complex, not less so.

GROSS: On the whole, I think you feel very grateful for Medicare, both as...

Dr. CASSEL: Yes.

GROSS: know, somebody who was helping to take care of elderly parents
and as a physician who specializes in geriatric medicine. You see some
problems with Medicare the way it exists now, and that's what your new book,
"Medicare Matters," addresses. So I'd like to talk about some of those issues
that you address in the book. You say that the Medicare system is no longer
compatible with how geriatric medicine is practiced. And one example that you
give is a kind of medical teamwork that's especially needed in geriatric
medicine. Would you explain why that teamwork is so important, and how you
think Medicare neglects to really deal with that?

Dr. CASSEL: An elderly patient, somebody who's 85 or 86 years old, who has
six or seven different chronic conditions: heart failure, hypertension,
diabetes, arthritis, maybe mild dementia, osteoporosis that needs to be
treated--that's not unusual. Any single doctor alone in an office or in an
office with a nurse is never going to be able to adequately manage all of that
patient's problems, because they need interaction with themselves and, when
necessary, with family members or other support systems in the community to
manage unexpected events that happen. You don't want to be calling 911 every
time you have a dizzy spell, and yet most doctors' offices aren't really
prepared to respond to a telephone call for something like that, `How do I
manage that?' Patient education--you have 14, 15 different medications, they
interact with each other; you're going to multiple different specialists, none
of them know what the others are prescribing, and somebody, one person, has to
manage the interaction of all those, make some decisions about what's better,
what's not, hopefully reduce some of those medications, or the complexity that
they have.

Finally, you treat the patient, not the disease. Now, that sounds like a
cliche, we hear that all the time. But there are times when treating a
specific disease can lose sight of what that person's function and functional
goals are, because there's, for example, side effects of a medication. Or the
patient may decide not to pursue aggressive surgery, let's say, for a knee
replacement if they have a lot of other problems and their quality of life
balance is just a decision not to do that. That's where you really need
geriatric medicine and coordinating that team. Plus, all the other
specialists that are involved in the care of that patient.

GROSS: So, in what ways is that difficult to do under the current Medicare

Dr. CASSEL: Because Medicare doesn't pay for any of those activities that I
just described to you. Medicare pays me, as a physician, when the patient
comes to my office and--for a visit--I see the patient. Medicare pays for
laboratory tests, for X-rays, Medicare pays when the patient goes into the
hospital. But if I have a patient, let's say with heart failure, who's
getting worse, and I find that out, call the patient up, discover that there
are some medication changes I could make to avoid the patient having to come
in to my office and potentially go in the hospital, I get paid nothing for
that. So it's actually in my financial interest to order unnecessary tests or
even tests that have been done by somebody else rather than go to the time and
effort of trying to track down the results of those tests from another
specialist. There's no reason--it makes my office actually more efficient for
me just to repeat these tests.

GROSS: My guest is Dr. Christine Cassel. Her new book is called "Medicare
Matters." We'll talk more after a break. This is FRESH AIR.


GROSS: If you're just joining us, my guest is Dr. Christine Cassel, and she's
the author of the book "Medicare Matters." She is a physician specializing in
geriatric medicine, she's also the president of the American Board of Internal

There are certain rules for rehab and nursing homes that I know you find
frustrating as well, rules in terms of what and when Medicare will cover--will
provide financial coverage for that. Give us an example of a frustration that
you have with the coverage for rehabilitation.

Dr. CASSEL: The most frustrating thing for rehabilitation is that it only
covers rehab services up to a patient's plateauing, and they have to keep
getting better in order for Medicare to keep paying for it. Well, the
patients that I see, people who might be very frail, need to have maintenance
physical therapy in order to keep their muscle strength as they get frailer.
And if they stop that therapy, they get worse. But that's not enough of a
justification for payment to continue, you've got to be recovering. It's that
same acute care model: if you've had a hip replacement or a broken hip or
cardiac rehab after a heart attack or cardiac surgery, then you need to have
that rehab model, that's more of an acute care model. But in terms of
maintenance, that isn't built into the system.

GROSS: And what about when somebody's eligible to be in a nursing home or a
rehab unit?

Dr. CASSEL: Well, this, I'm sure your listeners know, is not a
straightforward business at all, and it's very variable all over the country.
But it is fair enough to say that Medicare has never been committed to
covering most long-term care expenses. And so it constrains what it covers
just to things that are just post-hospital, and there's various ways of
defining that, but whatever that few-month period is that you might need to
get over an acute care hospitalization. Now, there could be a lot of
efficiencies to our whole health care system if we had one system covering
both acute and long-term care, but since we don't, it's very easy for the
acute care system, the hospital, to say, `OK, let's send this patient--it's
time for the patient to go to the nursing home,' and then somebody else has to
pay for it, either the family or, often, the Medicaid program.

GROSS: Another example of how Medicare pays, or doesn't pay, has to do with
hospice. And there are certain rules--if you want Medicare reimbursement for
a hospice, you have to agree to give up certain things--what are those things?

Dr. CASSEL: You have to agree not to use any kind of, quote, "curative
treatments," and that's a very complex thing, how that's defined. Not to call
an ambulance if you feel sick, that you call the hospice team and they come to
your home. And the reason for this is because the idea was that most of the
people using hospice are people who are at the end of life and they probably
wouldn't need an ICU, for example, but they might very well need an emergency
room visit if their hospice team isn't set up directly to care for everything
that they need. A good hospice team could be, but sometimes, for example,
someone who's suffering from advanced cancer may have a pneumonia, may have
some kind of infection that you're not going to cure, it's not going to
lengthen their life, but if you treat it it will reduce their suffering, help
their breathing, reduce pain, for example. It might need a hospitalization.
And so--and intravenous drugs, for example, or other kinds of things that are
considered more high-tech. So this just tells you why it's so difficult for a
government program to set arbitrary limits on what's covered and what's not,
and why, if you have an interdisciplinary team with geriatric experts and
palliative care experts, they could personalize that management for each

GROSS: So we have a dilemma here. You're saying that Medicare, which is
extraordinarily expensive, doesn't really cover enough, and some of what it
covers seems kind of arbitrary. So to solve the problems that you're saying
would mean changing the system so that it's even more expensive, you know, at
a time when the government is already in debt, there's a huge deficit, and
everybody's trying to cut money wherever they can. So it seems very unlikely
that--Congress is about to change Medicare to expand what is reimbursable.
So, you know, trying to look at it, like, realistically, what do you think
some of the options are?

Dr. CASSEL: You're exactly right, we can't just keep saying more and more and
more. And we particularly can't be saying more and more and more at today's
prices. So what I'm calling for in the book is that all of us, as a group of
citizens of the United States, begin to look at this program as something that
is part of our social contract with the government, and that, as we do that,
we understand that it benefits not just the elderly but it benefits family.
As you and I know, if Medicare wasn't there for our parents and for our
friends' parents, we would be paying for that medical care for those people,
and already the burden often does fall, the organizing and the managing, onto
the families. So I see Medicare as a family benefit, not just a benefit for
the elderly.

Now, that said, it is also a huge market force, because all of this fancy new
technology, new drugs, etc., primarily is used in older people, because that's
when all of us start to face major illnesses and illnesses that can benefit
from this. And we have a marketplace system of health care in this country,
so we have lots of industries who are doing very well in the business of
selling medical care; these include insurance companies, pharmaceutical
industry, device manufacturers, many physician specialist and medical groups.
So we have a very brisk and effective marketplace in many aspects of medical
care, but we pay more by far than any other country in the world for medical
specialties, for drugs, for devices, and even for hospitalization. So it
seems to me that if we, as a nation, really believe that an effective Medicare
system is essential for successful aging, for keeping our society productive
as we're all getting older, that we have to figure out a way to rein in those

GROSS: You recommend a form of rationing in your book, and rationing always
sounds really horrible, like you'll only be allotted so much, and then if you
get sicker than that, you're out of luck, you've gotten your share already.
So what is the kind of rationing that you think would work?

Dr. CASSEL: I think that we are already rationing health care. If you look
at the doughnut hole in the Medicare drug benefit, that's a form of rationing,
it's saying, `We're only going to pay for so much.' Rationing doesn't say that
you can't have the things that aren't covered, it just says you have to pay
for them. So what I would prefer is to see a basic package of health care
services, or something like a monthly fee that could be a capitation fee that
clinical groups could manage. And then if people wanted to buy something
above and beyond that, they would be free to do so. So it doesn't have that
dreaded idea of rationing that, quote, "I can't get this." I think Medicare
ought to have the right to negotiate prices with drug companies. As you know
in the legislation, that is explicitly forbidden. Every other nation in the
world negotiates prices, lower prices than what we pay in this country, for
those medications. So it's those kinds of things that I think, if we agreed
collectively that this is an important program, we could do.

GROSS: You're very critical of the new Medicare prescription plan.

Dr. CASSEL: Yes.

GROSS: You're critical of a Medicare the way it is now, because there are a
lot of things that aren't covered that you think should be covered or should
be covered differently than they are currently covered. At the same time,
there's a lot you like about Medicare, a lot--what are some of the things that
you actually like about the program?

Dr. CASSEL: I think it's very important that we keep the Medicare program as
a government program in this country. And I worry that, because people are
focusing on its flaws, that they may think the answer is just to throw it all
over to the private sector and private plans, which, I think, are not going to
turn out to be as efficient. The things I like about it are, first of all,
that it's universal, it covers everyone, and covers everyone with similar and
comparable benefits. So it makes it easy for patients to understand it and
easy to administer. Leads to the second thing I like about it, it has very
low administrative costs. Medicare costs--administrative costs are 3 to 5
percent compared to almost all of the private sector, which is between 15 and
25 percent. That's a lot of wasted money that goes to administrators rather
than going to deliver health care. And the last thing that I think is really
important about it is that it supports innovation and training in medical
care, it actually supports young physicians getting good training.

GROSS: With this new prescription drug benefit in effect for Medicare, where
do you see Medicare heading in the future?

Dr. CASSEL: I worry about that, Terry, I worry because I think that a lot of
people think that Medicare needs to be more like the private sector of health
care and commercial insurance. And that's the model for the Medicare drug
benefit, it's clearly the way that was established. And what that's done is
to make it very inefficient, lead to all the confusion that we talked about
earlier, and I don't think promises to solve the fundamental problems of
Medicare. So what that says to me is that the market system has failed, and
if we go too far down that road, we may not be able to put it back together
again as a social insurance program. The most important thing about the
universal coverage of Medicare is that you spread the risk across the whole
population, and as soon as you start slicing and dicing that, you have
insurance companies that take the healthier people, leaving the sicker ones
behind, and pretty soon you can't afford any kind of insurance program for the
very sick people. So it's essential that we somehow keep this as a universal

GROSS: My guest is Dr. Christine Cassel. Her new book is called "Medicare
Matters." We'll talk more after a break. This is FRESH AIR.


GROSS: My guest, Dr. Christine Cassel, is a specialist in geriatric medicine.
Her new book is called "Medicare Matters."

You've had to navigate through geriatric medicine not just as a doctor who
specializes in that field, but as a daughter who had elderly parents, who have
since passed away.

Dr. CASSEL: That's right.

GROSS: What were some of the conditions and illnesses that your parents had
to deal with in their later lives?

Dr. CASSEL: Well, my mother had serious arthritis and also dementia and was
determined to stay in her own home, and so we had to manage her ability to
move around and the medications that she was on and multiple physicians that
she saw. She developed breast cancer and needed to have a lumpectomy and have
that removed, and then radiation treatment. And managing all of those through
multiple different hospitals, we were very fortunate because there
wasn't--where she lived, there were a network of volunteers who would pitch
in, drive her to the radiation treatments, help manage her care at home. And
between my sister and myself, we spent a huge amount of time--my sister lived
nearby, so she had the major burden of this, and I would fly in and out on
weekends. So it was a big effort together to kind of manage that kind of
care. But we did--she did stay at home, and I think that was, you know,
something that was very much better than having have her--having her had to go
to a nursing home.

In my father's case, he lived longer and was quite active and vigorous and
then developed a malignancy. And was treated by chemotherapy for the
malignancy. There was a situation where it was clear that he had to go into
the hospital in order to get all of the drugs, including something as simple
as an injection to help keep his blood counts up, when a visiting nurse could
have just as easily come to his home and given it to him, but it wouldn't get
reimbursed that way, it would only get reimbursed if he came into the
hospital. So that was a good example of something that was very inconvenient
for him, very inconvenient for us.

GROSS: Because you had to help him get there.

Dr. CASSEL: Because we had to help him get there. Right. And didn't really,
to me, as a physician, make a lot of sense.

GROSS: What was the end of life for your father?

Dr. CASSEL: He was--he died in the hospital, where he had been admitted
because of complications from his chemotherapy, he was actively receiving
chemotherapy at the time. And as it became clear over the course of the
hospitalization that he was not going to get better, he made it very clear to
all of us that he did not want aggressive treatment, that he was a believer in
hospice, and thought that his time had come and he didn't want to be
intubated, he didn't want to be on a respirator. So that was all very clear.
And I think the nurses who took care of him were excellent. But the hospital
didn't have a palliative care program. I asked at the time, I said, `Do you
have a palliative care team who can come now and help manage his symptoms?'
Because he was very short of breath. This was a situation where the problem
wasn't so much pain, but it was just that he struggled to breathe. And that's
a very difficult symptom to manage. And they didn't. This was an otherwise
very good hospital, but they didn't have anybody in palliative care. None of
the interns and residents involved in his care who were otherwise very good
knew what to do. So the only thing they could think of to do was to put him
in the intensive care unit, because those were people who knew how to manage
people who couldn't breathe.

So in retrospect, I now have worked with a number of hospitals that have
implemented palliative care teams in the hospital for this kind of situation.
Because much as all of us might think that what we'd like is to be at home
when we die, not in a hospital, it just doesn't always work out that way. And
people do die in hospitals and there's absolutely no reason why you can't
deliver the same quality of palliative care that hospice gives you at home in
the hospital.

GROSS: it must have been so frustrating for you as a daughter and as a doctor
specializing in geriatric medicine to know what could be done--what could have
been done to improve your father's situation, and yet to be helpless to do
anything about it.

Dr. CASSEL: It was frustrating and it really inspired me to continue to
devote a lot of my efforts to helping to improve this situation.

GROSS: Dr. Cassel, thank you very much for talking with us.

Dr. CASSEL: You're welcome. It was a pleasure.

GROSS: Dr. Christine Cassel is the author of "Medicare Matters." She's the
president of the American Board of Internal Medicine.


GROSS: I'm Terry Gross.
Transcripts are created on a rush deadline, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of Fresh Air interviews and reviews are the audio recordings of each segment.

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