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Professor debates repercussions of recent Medicare Act

Andrew Thagard | Wednesday, April 28, 2004

Dr. Gregory Gramelspacher, an associate professor of medicine at Indiana University School of Medicine, lectured Tuesday on the Medicare Act of 2003 that President Bush signed into law in December. The presentation, titled “Medicare Reform: Did the President and Congress Write a Good Prescription?” marked the conclusion of the 10th annual “Mini-Medical School Lecture Series,” sponsored by the Medical Education Foundation and presented by the South Bend Center for Medical Education.The Medicare Act of 2003 has been surrounded by controversy since it first arrived in Congress in November of that year. The House passed the bill by a narrow margin after a debate that raged all night. After it was passed by the Senate and signed by the President, some hailed it as the most important bill passed by Congress since the establishment of Medicare and Medicaid in 1965. Others, however, claim that the legislation privatizes Medicare and will benefit the major players of the industry at the expense of patients.The issue is an important one, according to Gramelspacher, in part because Medicare is a central component to healthcare that represents a significant chunk of the national budget. The 2001 Medicare budget totaled $240 billion or 12 to 15 percent of the total federal budget for that year. Healthcare spending in the U.S. is equivalent to 15 percent of the gross domestic product and costs $5,800 per capita annually – the highest of any nation in the world by about $2,000, Gramelspacher said.”In this country we’ve decided to take a private market, capitalistic approach to healthcare … We spend an awful lot of money on healthcare,” he said. “The problem is what do we get with all this money?”Not quite what we pay for, Gramelspacher said.America ranks 20 to 25 worldwide for longest life expectancy and number one for obesity. Forty-four million people in the U.S. lack health insurance – most of them children and working poor, he said.”You couldn’t get sick in a better place than the U.S. but it’s not a very good place to stay healthy,” he said.The new Medicare Act aims to address these issues. The legislation authorizes the creation of a fourth component to the Medicare system for drug benefits by 2006 and establishes a discount prescription card that will be available starting in July of this year. The Act bans the importation of prescription drugs from abroad and covers preventative physical examinations and blood tests for diabetes and cardiovascular diseases screening, among other things. It also blocks a scheduled 4.5 percent decrease in Medicare costs that was set to be paid to physicians and replaces it with a 1.5 percent increase in payment.Such changes don’t come without a price, Gramelspacher said. Initially, the Act was projected to cost $400 billion for the first decade and $1-2 trillion for the second decade. It is now projected to cost closer to $530 billion for the first decade. Seventy-five percent of these costs will be paid out from general tax revenue and the remainder will be funded by monthly premiums.”We’re not going to have to worry about that [second decade, however,] because Medicare is projected to go bankrupt in 2019,” Gramelspacher joked.On a more serious note, Gramelspacher said that the potential benefits of the legislation will depend upon the individual. As with insurance, those people with minimal prescription costs will stand to pay more by opting into the program than if they didn’t. People who use moderate amounts of prescription drugs stand to benefit from it and those who use substantial amounts will benefit the most.While Gramelspacher praised some aspects of the Medicare Act, he said that such incremental reform is not the answer to American’s healthcare problems.”There are some things I like, there are a lot I don’t like,” he said. “I don’t want incremental reform. I don’t think it’s a good prescription [for the country].”Gramelspacher graduated from Notre Dame with a degree in government and international relations. He earned his medical degree at Indiana University School of Medicine and completed his residency in internal medicine at the University of Michigan. He is the founder of the Program in Medical Ethics at IUSOM.