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Reforming Medicare: What Does the Public Want?

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This blog post originally appeared in Health Affairs on November 13, 2014.

Is Medicare adequately meeting the needs of seniors, or are there ways that its core attributes could be improved? Numerous elected officials, policymakers, and other thought leaders have offered perspectives on ways to change the program. Few efforts, however, have been directed at understanding how the public—given accurate information, a variety of options, and a valid structure for weighing the pros and cons—would change Medicare’s basic design.

The MedCHAT Project

Recently, the American Enterprise Institute and the Brookings Institution co-hosted a briefing on the results of a California project that did just that. The “MedCHAT” project, sponsored by the nonprofit, nonpartisan Center for Healthcare Decisions, asked 800 residents—the lay public, as well as health care professionals and community leaders—to consider Medicare’s current benefits and decide if those should be changed. Respondents represented the full spectrum of age, race, ethnicity, education, and income level.

Using an interactive, computer-based system, participants were asked to respond as “social decisionmakers;” they were tasked with making Medicare more responsive to the needs of current and future generations without imposing a greater cost burden on the country. The computer-based CHAT (“Choosing All Together”) program uses actuarial estimates to show the relative costs of health care benefits, allowing participants to make trade-offs with an understanding of the fiscal impact each benefit has on the program.

There are 12 MedCHAT categories of possible changes to Medicare coverage. Most describe common health care needs, including “early chronic” conditions (such as high blood pressure, diabetes, and obesity); “complex chronic” conditions (such as heart or lung disease requiring on-going treatment); and long-standing incurable illnesses of patients in their “final phase” of life. Within each category are from one to three levels of benefits, where participants can decide to stay at the current level, opt for more or less inclusive coverage, or reject coverage altogether. Participants can also add new benefits that Medicare currently does not provide.

Eighty-two groups throughout the state met in 3-hour intensive small-group sessions. Each session had four rounds of decision-making: 1) as individuals, participants decided what they would want for themselves; 2) in groups of 2 to 3, they chose the best plan for the country; 3) as a group of 8 to 12, participants debated/decided together what a national plan should include; and 4) as individuals, they made their final decisions for the country.


Joseph Antos

Wilson H. Taylor Scholar in Health Care and Retirement Policy, American Enterprise Institute

Since they were working within a finite budget—what Medicare currently spends—any new benefits proposed had to be offset by reductions in other aspects of Medicare spending. Using traditional Medicare as the basis for this task, the majority of decisions revealed a program that looks startlingly different from today’s Medicare.

The Public’s Approach to Improving Medicare

The results in the MedCHAT report are from the final round of decision-making, and most of the added benefits are not surprising: 77 percent added a long-term care benefit; 95 percent included dental; 85 percent added vision and hearing; 81 percent added non-emergency medical transportation; and 69 percent enhanced the current mental health coverage.

To cover the added benefits, participants imposed greater restrictions on other aspects of Medicare:

  • Traditional Medicare would no longer include unrestricted choice of providers and hospitals: 82 percent decided that everyone would enroll in a provider network. However, 65 percent also included the compromise that primary care providers could refer Medicare patients outside the network if there was sufficient reason to do so.
  • Low-value care—e.g., when a treatment is highly unlikely to provide a meaningful benefit—would no longer be covered by Medicare in the same fashion as high-value care. Eighty-eight percent felt this stricter coverage should apply to those with complex chronic conditions for whom marginally effective treatments were viewed as not helping the patient enough to warrant the cost. In effect, this reflects a judgment that limited resources should be directed where they would do the most good. Here, too, 54 percent sought a compromise: patients would face a 50 percent co-insurance for low-value treatment, rather than no coverage at all.
  • Although palliative care and hospice would be readily available for patients in their final phase of life, 65 percent of respondents thought that Medicare should no longer pay for “long-shot” treatments, and 97 percent would not have Medicare cover the cost of ICUs when patients are dying.

In addition, 85 percent agreed to reduce the use of current Medicare resources to ensure Medicare’s solvency for at least another 50 years. Participants recognized that shifting resources means some additional sacrifices would be necessary to preserve the program for future generations. Perhaps not surprisingly, younger participants were more likely to support this policy.

In just two of the 12 MedCHAT categories—treatment of unexpected, severe illness (labeled catastrophic care) and basic services for common short-term illnesses (“routine care”)—did the majority of participants stay with the current benefit (which covers all services ordered by the physician regardless of their evidence of effectiveness), but opinions were fairly evenly split between the status quo and a more restrictive policy. When they chose to provide less than the current coverage, participants commonly sought out a middle ground (cutting back but not completely eliminating coverage) as they did with provider choice and low-value care.

Expanding the Debate

The MedCHAT project provides compelling evidence that average citizens would re-design Medicare if they could. What MedCHAT adds is the finding that the public is willing to give up some coverage to get additional benefits, and they are willing to sacrifice some spending today to ensure that Medicare will remain financially sound in the future.

There are limitations to this process. The views of 800 Californians cannot be assumed to reflect those in other states. The willingness to enroll in a provider network rather than continuing to have access to any provider may not be shared by citizens in other parts of the country, where the roots of such networks are shallower. And not all aspects of Medicare’s structure could be included in the 3-hour discussions because the extent of information would have been overwhelming.

Yet this project has brought to light some critical issues in how average citizens think about the needs of seniors. Its realistic approach—requiring people to make decisions within the context of a finite budget—is a powerful approach for understanding the views and values of those with a stake in the largest health insurance program in the country.

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