Two recent news items caught my attention, both of which left me wondering what the originators of them could have in mind. One of them was the announcement that Prime Minister Papendreou was calling a national referendum on whether Greece should accept the harsh conditions laid down by the other E.U. nations to deal with that country’s debt problem. The other was a political ad by the AARP calling for a rejection of any cuts to the Medicare and Social Security programs, as part of the U.S. deficit/debt crisis.
They both raised a similar question in my mind: was this a crafty move on their part, knowing they will lose, to simply strengthen their negotiating position? Mr. Papandreou surely knows from the recent Greek riots that a referendum is likely to come out against the E.U, just as the AARP must know that Medicare must be cut, an unpopular move or not.
I will leave the divining of Mr. Panandreou’s motives to E.U. savants, and focus on the AARP. Its leaders can read the papers and economic forecasts as well as anyone else, so what are they up to? To be sure, no government program threatened with a loss of money is happy about that: the common response is to point out all the harms that will result, most of them probably accurate. They then rally supporters, asking them to protest, to write to their congressman, and to rally their constituents to stand firm.
Sometimes these tactics work, but in this case they should not prevail. Even before the deficit/debt problem came to the fore, provoked in part by the recession, it was well known that Medicare would eventually be in big trouble. A combination of the retirement of the baby boom generation and steadily rising health care costs would guarantee that result. The Social Security program has a longer projected period of solvency and that period could be extended in relatively painless ways, such as raising the age of entitlement. But there are few painless possibilities for Medicare, and one would have to be more than a little crazy to take any such ideas with that as its aim seriously.
AARP should not oppose cuts. That is at least foolish and at worst a gross appeal to the elderly to put their interests before other groups and the economic welfare of the country.
Here’s what I suggest they do instead. First, work out a plan for benefit cuts that would make a serious budgetary difference, not just a gentle bending of the cost curve. Make use of direct cuts, cost-effectiveness (not just comparative effectiveness) guidelines, increased means testing, eligibility changes, and a tolerable degree of out-of-pocket copayments and deductibles.
Second, propose a range of comparable cuts to providers, physicians and hospitals most importantly. Doctors would make less, hospitals would make less, and pharmaceutical and device manufacturer would be paid less. Providers in general should feel the pinch equal to that of Medicare beneficiaries.
Third, an overriding aim of this effort would be to go directly after the background costs of American health care. Medicare is expensive because it is embedded in an expensive health care system—which means that Medicare can only be sustainable in the long run if the system as a whole is. The overall point of a revised AARP campaign would be to fight for fairness: the elderly are prepared to take their lumps as long as the lumps for everyone else are just. We are all in this together.
Daniel Callahan is President Emeritus of The Hastings Center and coeditor of the Health Care Cost Monitor He is author most recently of Taming the Beloved Beast: How Medical Technology Costs are Destroying Our Health Care System.