Largest care player in the american, a huge growing federal entitlement. And a little more than ten years, medicare will increase in enrollment from 65 million to nearly 80 million enrollees and total Program Spending will double today, roughly. Its 1 trillion. And within ten years it will be nearly 2 trillion. At the same time, medicare is changing. Today, half of all seniors are enrolled in Medicare Advantage or a system of private coverage, which is the alternative to traditional medicare. And Medicare Advantage is a defined contribution. And what that means is, is that the government makes a contribution on behalf of a beneficiary to the beneficiary chosen plan. Given current trends, Medicare Advantage will soon be the dominant form of medicare. The question before the house and before the nation is a very, very big one. That is, how do we provide high quality medical care to a huge and, rapidly growing older population, often at a cost that is affordable not only to seniors, but also to americas taxpayer. In our new book, modernizing medicare from Johns Hopkins university press, it a dozen of our colleagues in the Health Community have provided very specific answers that question. Three of them are with us here today. Brian miller is practicing physician and assistant professor of medicine at Johns Hopkins university and a fellow at the america and enterprise institute. John goodman is president of the goodman institute. Dr. Goodman is a Prominent Health care and hes widely known throughout the United States as the father of Health Savings accounts. Doug holtzeakin is, president of the American Action forum and a former director of the congressional budget office. And now with the debt limit facing the country. You can expect to see doug holtzeakin, your National Television shows dealing with the debt limit and all of the other problems are connected with it. With that, ladies and gentlemen, would like our guest to come up and and join us and well a discussion about medicare. Ryan im going to start us off with the question for you right now. As you know, millions have Senior Citizens or are voting with their feet and enrolling in private Medicare Advantage plans, which is a defined debate. Define a defined benefit program. Medicare advantage as opposed to traditional, which is a defined benefit program. You would you deal with this in chapter six of the book that has been published, Hopkins University press. What are the inherent tradeoffs facing seniors when have to make a decision about whether to enroll in traditional medicare or Medicare Advantage . So first of all, bob, thank you for having this event and having this conversation about the Medicare Program. Medicare today, really, as you said, two different programs. Its traditional medicare, and its Medicare Advantage. When you are in the employer sponsored market and you pick your Health Benefits, right . Youre signing up for a health plan thats either a selfinsured health plan or youre purchasing plan product. When you end up in the medicare marketplace, things are a little different. So you turn five, you have developmental stage renal disease, or else you qualify for medicare, you sign up for traditional aplus plus benefits. Right . Hospital benefits, and also a physician. Then you also have to pick a prescription plan. And then the traditional Medicare Program has no catastrophic outofpocket limit. So you you then pick supplemental coverage. So youve made three choices. The alternative of, of course, is picking Medicare Advantage where you have one choice. Youre getting coverage, youre getting supplement coverage or medigap coverage. Youre also 90 of plans include a Prescription Drug plan. And then you also get Supplemental Benefits frequently. But two thirds of plans, three quarters have dental vision and hearing. So if you think about it, if you are 65 years old and entering and you have three or five chronic conditions, youre on a fixed you have a limited number of assets, right . You dont have infinite. You cant spend that you want to. And so making one choice and getting an integrated, comprehensive Health Benefits package is something you know, it sounds like a bunch of garbled gook, but for the average consumer, its actually much easier to make choice that choice. As i said it gives them financial protections. They dont have to make as many choices. And then the of course, youre like, theres always a catch theres always a cost. And the cost for the beneficiary is that they accept a network, right . They cant see everything, all doctor, they can see the doctors and the health plan network. But if youve been, you know you were working for 30 years, you had Health Insurance through your employer, you a Health Insurance through the exchange, you had a network. You couldnt see every single doctor. And so that trade off for todays new retirees is not scary. And then also, theres usually some utilization review and some Access Controls go with that. So its a trade off. The beneficiaries as im going to get more benefits, im going to get more financial protections. I can have some limitations on. I use that. So its richer benefits and more convenience of rich, richer benefits, more convenience. And frankly, its easier to choose. Right . Right. Because youre making one choice instead of three choices. And at the other end, the other the other evidence is, is that with so many so many plans, basically its actually more affordable in many cases. Yeah, its more affordable to the beneficiary, right. Because if you have to purchase traditional medicare and pay premiums that then you have to pay Prescription Drug plan premiums and then you have to pay medigap premiums and then good luck. You know, being 78 years old and trying to get vision, dental or hearing coverage in the private market. Right. Well, actually, you cant get it in the private you get it through your Medicare Advantage plan. Right. John, in 2003, republicans in congress enacted the medicare modernization act, which created the Medicare Advantage program, a system of competing private plans as the alternative to traditional medicare. A few years later, congress, with the support of president obama, enacted the Affordable Care act and called obamacare and obamacare created a system of private plan competition and state based Health Insurance exchanges on paper. John, they look very similar. They seem very similar. But you make the argument that in fact, they are quite different and that Medicare Advantage works much better than the health exchanges. Could you explain why that why that is true . Yes, they are very similar paper and very different in practice. And thats why 50 of the seniors are in a medicare plan and over in the obamacare, the non subsidized part of that larger was a death spiral. It was going away because no one was buying until. Congress came along and added all subsidies, even for people making half a Million Dollars a year. Whats the difference . Well, Medicare Advantage is the only place in our Health Care System where if a doctor discovers that a patient has a change in medical condition, he can forward that information. The insurer, which in this case is medicare and get a higher premium for his plan. And that is why in Medicare Advantage, you have special needs that specialize in diabetes and heart care and other illnesses and want to attract people. These problems is the only place in the Health Care System where this happens there is no employer plan in this country. There was an employee with High Health Care costs. Theres no commercial insurer that wants more. Theres nobody in the obamacare market that wants or theyre all trying to attract a healthy and runaway from the sick. Now, in regular, traditional, there are 10,000 things that medicare pays doctors to do and not one of those 10,000 task has as as as its objective are states that. Your job is to make the patient healthier or to cure disease. Over in the Medicare Advantage plans or by contrast, people lose plans lose money if they dont carry diseases that make people healthier. This is George Halvorson, former chairman and ceo of kaiser, who says that in the regular medicare plan, 20 of diabetic patients get foot ulcers, 20 of those turning into amputations. This is spending 8 billion a year on on amputations over in the medicare advanced plan plans. By contrast, even in the the moderately successful, they have half as many ulcers and a third as many amputees, patients. Now they do things that probably not on the list of the 10,000 things that regular medicare pays for. So one of the ways you prevent amputees is ulcers. You make sure your patient has feet and dry socks. Well, i dont think, you know, dry feet socks are on the list of 10,000 things. Traditional medicare pays for blindness is another problem with older diabetics. Again, we have much higher rate and regular than the Medicare Advantage plans. It costs 100,000 a year, by the way, for the amputations, 20 to 30000 a year for the blindness. Congestive heart failure. Again, we have a significant difference in outcomes in Medicare Advantage and traditional medicare. So so these plans act differently than regular their financial incentives are different. How so says the death rate for dual patients with some conditions is 40 higher than it is in Medicare Advantage plans. I will say that one thing if you if you read what George Halvorson has to say and you read the kinds of articles that have been appearing in Health Affairs, you will think were describing two different worlds. My only problem with our subscription is he calls medicare for service and he calls medicare capitated. Some of our best Medicare Advantage plans, however, pay fee for service. The distinction is not you know how the doctors pay. The distinction is over here we have integrated coordinated care with the objective keeping people healthy. And over here. Its not integrative. Its not coordinated. And people actually make more money when the patients get sicker and require more treatment. Thank you very much. Doug, in chapter 12 of your your contribution to the book, you you do cost esteemed that show that a comprehensive defined often referred to as premium support system driven by Consumer Choice and a rather robust competition would result in major savings for both medicare patients and also. Your focus the chapter, your focus is primarily on taxpayer beneficiary savings. I think i think the question for a lot of americans would be, well, is the need the desire to move into a premium support system or a comprehensive defined contribution system is is the desire to reduce health care spending. The only reason for moving in that direction or creating a premium support system in medicare . So absolutely not. You know, i focused on the budget class and the beneficiary out of pocket costs because you told me to, but very good. Well, its the more important part. Nice to tell the cbo what to do. Im going to have to try it more often. The more important part of the story really is try to take some lessons that weve learned in other settings. Medicare advantage being one of them. The power having competing plans, deciding which supplemental to patients value, what what things in addition to the the care will allow to stay in Better Health improve their outcomes look at the the medical care Part D Program where. We we harness private between manufacturers of pharmaceuticals and and the Plan Sponsors to deliver robust competition and let individuals pick among plans to get the formularies that match their needs best. And the outcomes that they prefer. And in that process, we get extraordinarily high satisfaction. If you ask Medicare Part d beneficiaries, you know, 82 to 90 are extremely happy with where they are, and its way cheaper for them and the taxpayer than i anticipated. We when we scored it back in 2003. And with weve learned that we infuse into the health care programs, the federal government the respect for individuals values they get to decide what they think is important and the robust competition of the private sector and order to serve both the taxpayer, the beneficiary well, i think respecting the values and enhancing the competition, the important things in and of themselves way more than the dollars saved on the on the federal budget although i would just stipulate we need to i mean you know fund that you should not use it cocktail parties because you have no friends the Medicare Program is by itself responsible for one third of all federal debt outstanding. This is a program that has never been designed be financially sustainable. It bleeds red red ink every year. And we want to get that control on behalf of the present and future generations. And want to serve the Medicare Beneficiaries better. And this is a way to do that. Thats a very important point, because medicare, aside from the fact that it spends so much money and as you point out, is contributing to the deficits in the national debt. Medicare is governed by a very powerful regulatory regime. The medicare bureaucracy is referred as the center for medicare and medicaid services. Cms. And for years, course, this bureaucracy sets prices for as pointed out, sets prices for 10,000 medical procedures in over 3000 counties throughout the United States. Frankly, it doesnt do a real good job at that. But Medicare Advantage and the coming Medicare Advantage in basically introduces a new dynamic into the system. And that has an effect on the medicare bureaucracy. See, so i was going to ask ask you, brian, as a medical professional dealing with senior and so on, how does Medicare Advantage as a as a system this competitive system of private plans, change the role of commerce in the lives of your patients, of Senior Citizens . Before i answer that, actually, i want to respond to something doug said about. Beneficiaries and choice of mind. And so i remember i had this patient and she had six doctors, a bunch of meds she took, admitted to the hospital. You know, pretty smart old lady her Medicare Advantage plan helped her get like, you know, modifications to her bathroom so she can get it in and out of the bathtub they got her the whole chairlift. So she could go up and down her stairs. She had two storey warehouse and a basement on a fixed income and, you know, she was on a plan, a dual eligibles, special needs plan. She was medicare, medicaid to eligible and she you i remember talking with her and she shouldnt have know good teeth and shes going to get all of her teeth pulled get dentures and go to the dentist. And i her how she did that and she said, oh picked the one plan that would let me do that. And i said, okay. But like what about all your doctors like you have doctors like our all of your doctors in, your network. She said, well, 5 to 6 hours, i picked a new cardiologist for this this year and the next year after i get my teeth fixed when open enrollment is then again, guess switch back to, you know, my other ama plan that has my old cardiologist in it right after she got her teeth picked fixed. So its like so beneficiaries can be pretty crafty, pretty smart in a good way. Right. You know shed be a multibillion Dollar Company and that that was sort fun for me to see as her physician. But like when you think about that. Right. If we the plan finder and give beneficiaries better choices, like we show them how they can shop for their comprehensive Health Benefits package. Comparing ma versus a plus b benefits plus medigap plus part d, which have some of our colleagues like lisa graber and others ive written about like we can empower consumers to make choices and drive beneficiary satisfaction. To your question about like emma and how changes the role of cms, cms right now very much focused on payment levels. Its the annual cycle hips. Where all the ops role, all these roles, you know, one of them was like 1500 pages recently. All does is that favors you know the people inside the beltway who can there and read a 1500 page role and analyze it for the appropriate stakeholders. Right and you have, you know, the usual cycle of medical specialty societies that show up around the time of that payment levels are set. And theres stream of people going into the various buildings in th