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July 14, 2008
Editorial

Medicare’s Bias

http://www.nytimes.com/2008/07/14/op...gewanted=print

The intense struggle in Congress last week over a relatively modest Medicare reform bill has underscored a disturbing truth: many of the private plans that participate in the huge government-sponsored health insurance program for older Americans have become a far too costly drain on Medicare’s overstretched budget.

Private health plans were promoted in the 1980s and 1990s in the belief that they could reduce costs and improve care through better management. And for a while they did. But policy changes that were championed by the Bush administration and a Republican-controlled Congress led to exactly the opposite outcome.

These private plans — that now cover a fifth of the total Medicare population — receive large subsidies to deliver services that traditional Medicare provides more cheaply and more efficiently by paying hospitals and doctors directly. Congress was right — for reasons of equity and of fiscal sanity — to pass a bill that would at least begin to remove some of the subsidies.

There is no doubt that the traditional Medicare program had many inefficiencies. There were high hopes that H.M.O.’s, which are private plans that have their own networks of doctors and manage their patients’ care, could do better.

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