September 16, 2011

Senators Urge Obama to Protect Medicare Benefits

Whitehouse and Others Lay Out Opportunities to Reduce Costs without Cutting Benefits

Washington, DC – With President Obama set to unveil a plan next week to pay for his proposed American Jobs Act by, among other things, “making modest adjustments to health care programs like Medicare,” a group of U.S. Senators wrote to the President today urging him to protect Medicare benefits for seniors. In their letter, the Senators urge the Administration to prioritize delivery system reform in their efforts to reduce health care costs – not cut benefits for our seniors and disabled citizens.

U.S. Senator Sheldon Whitehouse (D-RI) led the letter, which was also signed by Senators Mark Begich (D-AK), Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Tom Carper (D-DE), Kent Conrad (D-ND), Al Franken (D-MN), Jeff Merkley (D-OR), Barbara Mikulski (D-MD), Mark Udall (D-CO), and Mark Warner (D-VA).

“We strongly urge you to rise to the urgent moment on health care delivery system reform, before reducing senior citizens’ Medicare benefits,” the Senators wrote. “You have observed that we are headed for a cliff on health care costs. Our efforts should be determinedly dedicated to turning the bus away from that cliff, through health care delivery system reforms whose benefits will accrue throughout the economy; not just to Medicare, but to businesses large and small, to states and municipalities, to workers and health care consumers.”

The Senators also urged President Obama to “set a cost savings target to help focus, guide, and spur these efforts.”

Rhode Island is a leader in improving the quality, safety, and value of health care through delivery system reforms, particularly in the area of health information technology. The Rhode Island Quality Institute (RIQI) has been awarded all three HIT grants funded by the American Recovery and Reinvestment Act: the Beacon Communities grant, the Health Information Exchange award, and the Regional Extension Center Grant. RIQI recently announced the launch of “Direct Messaging,” a direct flow of protected health information from one provider to another through currentcare, Rhode Island’s health information exchange. This initiative is the first of its kind in the country, and will benefit patients and health care providers by increasing the flow of patient information to reduce medical errors and improve the quality of care.

The full text of the letter is below.

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September 16, 2011

The President

The White House

Washington, DC 20500

Dear Mr. President:

We write to urge you to prioritize your cost containment efforts for Medicare on reducing the exploding cost of our health care system, rather than on benefit reductions. The trend of increasing health care costs is not unique to Medicare. Costs are going up across our health care system, whether health insurance is private or public, military or self-insured. Secretary Gates has said that health care costs are “. . . eating the Defense Department alive.” Moreover, businesses across the country see their bottom lines relentlessly eroded by uncontrollable health care costs; workers see dreams of wage increases consumed by increasing health care costs; and ordinary Americans find decent health insurance ever harder to afford.

At the same time, America’s health care system remains wildly inefficient. We burn over 18 percent of GDP on health care, yet the next-most expensive and inefficient industrialized nations come in around 12 percent. Your Council of Economic Advisors has estimated $700 billion a year in national health care savings are possible without harming the quality of care. Other responsible estimates are higher, up to a trillion dollars a year. We don’t need an exact number to know that immense savings are possible with no harm – indeed, likely improvement – to the care Americans receive.

The Affordable Care Act gives your administration extensive opportunities to achieve these potential savings. As a consultant to the administration, MIT professor Jonathan Gruber said: “Everything is in here . . . I can’t think of anything I’d do that they are not doing in the bill.” Your administration is working hard to implement these reforms through Secretary Sebelius, Administrator Berwick, and many private sector entities who see and believe in this great opportunity.

We encourage your administration to set a cost savings target to help focus, guide, and spur these efforts, and provide a measureable goal by which we can evaluate the progress of implementation. If the Council of Economic Advisers’ $700 billion savings estimate is correct, since Medicare amounts to 20 percent of America’s health care spending, we could save $42 billion a year in Medicare cost if we only achieved 30 percent of the potential. Over a ten-year budget period, that’s $420 billion in Medicare savings — all without taking away any benefits, and while likely improving care.

We strongly urge you to rise to the urgent moment on health care delivery system reform, before reducing senior citizens’ Medicare benefits. You have observed that we are headed for a cliff on health care costs. Our efforts should be determinedly dedicated to turning the bus away from that cliff, through health care delivery system reforms whose benefits will accrue throughout the economy; not just to Medicare, but to businesses large and small, to states and municipalities, to workers and health care consumers.

Please prioritize your administration’s efforts on health care delivery system reform as a key solution to our Medicare cost problem.

Sincerely,

Senators Sheldon Whitehouse, Mark Begich, Richard Blumenthal, Barbara Boxer, Sherrod Brown, Tom Carper, Kent Conrad, Al Franken, Jeff Merkley, Barbara Mikulski, Mark Udall, and Mark Warner.

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