As presently organized, Medicare violates every rule of an efficient enterprise. It has no CEO with powers of a kind expected in business. Its stakeholders, the Congress, have a right to interfere with its day-to-day operation. It has no annual budget or the fiscal discipline that imposes. It can set few limits to its expenditures, even to the present point of running an annual deficit. And it underpays its administrators in comparison with those with like responsibilities in the private sector – just as it has too few administrators in the first place.Click here to access Dr. Callahan's article.
The National Institutes of Health, the world’s preeminent biomedical research institution, exemplifies everything Medicare lacks. It has a director with strong authority, an annual and tightly managed budget, lay advisory groups, and a good relationship with Congress, one marked by deference on the latter’s part and considerable discretion in setting its priorities. Atul Gawande among others has celebrated the quality and efficiency of the Mayo Clinic, the Geisinger Health System, and Intermountain. They are all private but share a similar budget and administrative structure akin to that of the NIH—everything Medicare lacks.
From the NEJM article by Robert Mechanic, M.B.A., and Stuart Altman, Ph.D.:
One approach to accelerating delivery-system change would be comprehensive reform of Medicare’s provider-payment system. Such reform was proposed early in last year’s debate but was eliminated as legislators began to understand that comprehensive payment reform could be highly disruptive for hospitals and physicians who are unprepared to rapidly modify their clinical operations. Instead, legislation passed by both the House and the Senate directed the Centers for Medicare and Medicaid Services (CMS) to implement a series of voluntary pilot programs, including a national payment-bundling demonstration and a program allowing accountable care organizations that successfully control growth in per-beneficiary spending while meeting quality goals to share in Medicare’s savings.Click here to access the NEJM article.
Congressional reform proposals also include a new Center for Medicare and Medicaid Innovation (CMI) intended to facilitate beneficial delivery-system changes.