Medicare: The 800 Pound Healthcare Gorilla

Medicare, that is the gorilla in the room, and you’ve to put all of it on the table.

Joe Biden, Vice-President of the United States

Vice-President Biden knew about what he was talking.  Medicare is the gorilla in the United States health system. Some say the Medicare gorilla weighs 800 pounds. Citing Medicare as a gorilla was a fashionable thing for Biden to say, and  he likes to speak the language of the people.  

If you don’t understand why a gorilla should weigh precisely 800 pounds,   I invite you to read this definition in Wikipedia.

"800 pound gorilla" is an American English expression for a person or organization so powerful that it can act without regard to the rights of others or the law. The phrase is rooted in a riddle:

"Where does an 800 lb. gorilla sit?"

The answer:

"Anywhere it wants to."

Medicare dominates American health care.  Other health insurers obsequiously and meekly follow its policies, and it OKs the  AMA’s  Reimbursement Update Committee’s recommendations, which establishes the codes by which doctors are paid.   It pays and dictates fees  for hospitalized Medicare patients as well.   Medicare is, in effect, the prototype of a single payer system.

Kathy Means, a Medicare expert and principal  of Old Creek Consulting, and Ken Monroe, an expert on non-profit organizations,  put it this way in white paper supported by the Physicians Foundation, Healthcare Highway II, Crossing the Electronic  Divide: Health Reform Gateway to 2013:

“To a major degree, the Medicare program, due to its sheer size and national centralizing policy making structure, is the primary instrument  by which many of the ACA’s trials for changes in medical care, as opposed to health insurance improvements, are being wielded.”

These changes include adoption of electronic health records, quality measures and reports, accountable care organizations, bundled billing , medical home concepts, value-based payments, financing medical education, and serving underserved populations.

To carry out these functions, Medicare is deploying comparative effective research,   best practice models,  pay for performance, all supported  by health information and digital technologies, and its various electronic means of communication, including its multiple Medicare websites.  The government is also launching a national media campaign to sell its health law, with its reductions in Medicare benefits, to the public.

There are problems with this strategy:

·         One, the health care jungle is of a finite size and can grow only so large.  Medicare costs have doubled in the last decade.  It is the fastest growing component of  the national debt,  which may exceed $20 trillion in Obama’s second  term.

 

·         Two, there are no 800 pound gorillas on the planet. The biggest gorilla on record weighs only 600 pounds.   For the 800 pound gorilla to grow to 1000 pounds is unlikely given the size of the debt, and the public’s desire to reduce government spending.

·         Three, there are  other animals competing for  power. For example,  hyenas and jackals, known as identity thieves,  hack $ 60 to  $90  billion out of the Medicare nearly $ trillion  budget. Unfortunately,  little elephants in the jungle room, called patients and doctors, resist pleas to  structurally change Medicare and to advance its age of entry.   Then there is that  GOP elephant, which is competing for Medicare turf by insisting upon vouchers.   The GOP elephant   also weighs almost 800 pounds/  It forages and governs in 30 states with an aggregate population of 184 million.

These problems do not bother the 800 pound gorilla. It has been the top gorilla 48 years now, and most of the inhabitants of its hunting rounds rely upon it. These now include 55.6 million in Medicaid,  48.8 million in Medicare, and nearly 50 million on food stamps. True, physicians can be a nuisance.  They charge for their services. Although paying them for their services cost only 12% of the Medicare budget, they order services that consume 80% of Medicare costs.  But physicians  are vulnerable: 550,000 of them, you see,  bill Medicare.  Physicians depend on Medicare for their livelihoods. Medicare can marginalize them by systematically reducing or denying their fees, disqualifying them from payments, and penalizing them for not meeting Medicare standards. Besides, physicians are not united and don’t have any single leader.  They can further be divided and conquered by herding them into Accountable Care Organizations in the name of Medicare savings.

Why worry?  When you are the 800 pound gorilla,  everybody else has to play by your rules. You can do what you want to do.

Tweet: Medicare is a 800 pound health care gorilla. It is the biggest payer, pays only what  it wants to pay, and sets the rules for engagement.