Medicare Trustees' Report Signals 'A Lot of Work Ahead'

John Commins, for HealthLeaders Media , April 25, 2012

"But the trustees also didn't go off the deep end and say the world is going to end in 12 months," he says. "Realistically, you are able to make reasonable hunches 24 to 36 months out. That is about it. If you are splitting hairs between 2021 and 2023 solvency, that is a great economic exercise, a great lecture, but it will be nothing."

"So, what do you take out of this? No one doubts that in the last 24 months we have slowed spending in healthcare, but that is not permanent. In all of these projections there is an increase in spending on a per capita and aggregate basis," he says. "The second thing it says is the more that costs grow above the baseline, the shorter the solvency of Medicare."

Keckley says the statute also restricts the scope of assumptions trustees can use when making projections about Medicare's future. "They don't pick up non-traditional competitors in the system; for example, the impact of retail clinics on access to primary care. The statutes don't allow the agencies to incorporate things that we know happen in the real world," he says.

"They are not incorporating any dire events. What happens if there is another war? What happens if by some magic longevity in the Medicare population exponentially increases because we found a miracle drug for cancer or dementia?"

Keckley says that doesn't mean the trustees report is inaccurate, just limited.

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