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Feeding Medicare’s Infrastructure

Mother Robin Feeds Young in NestMuch like a mother robin feeding her young, Medicare continues to ‘feed’ the infrastructure that serves our elderly – but, with a great deal of waste and inefficiency.

In their recent book, ‘Medicare Meltdown: How Wall Street and Washington are Ruining Medicare and How to Fix It,’ co-authors Rosemary Gibson (aka health care ‘rock star’) and Janardan Prasad Singh, spend a chapter on ‘Fifteen Medicare Facts That Will Astonish You.’ Learning astonishing facts can be fun. But when those facts relate to Medicare, they can be extremely sobering.

Perhaps you can use one or many of these facts to ‘wow’ guests at your next dinner party. Better yet, use them when meeting with those elected to Congress.

1. If Medicare were a country, it would be the 20th largest economy in the world.
That’s right, larger than the entire economy of Sweden – and double that of Ireland!

2. Medicare wastes the equivalent of New Zealand’s entire economy.
In 2011, Medicare spent $560 billion, yet about 30 percent ($170 billion) was wasted and did not benefit our seniors. Where did it go? Blame it on overtreatment, inefficiencies and poor management. (Source: Institute of Medicine)

3. Between now and 2030, Medicare will be adding population equivalents of Austria, Hong Kong, Israel and Switzerland to its rolls.
In 2013, about 49 million people were covered by Medicare, and in 17 years (2030), an estimated 33 million more Americans will be covered.

4. Ten thousand boomers sign up for Medicare every day.
That’s 10 thousand per day for the next 20 years!

5. During a lifetime of work, the average person pays $60,000 for Medicare.
Look at your pay stub, this is the money deducted for the Medicare payroll tax.

6. A new retiree can expect to receive about $180,000 in Medicare benefits.
A person pays in $60,000 and expects to receive, on average, $180,000 in benefits. Economics 101 can’t explain this type of math – unless we mortgage our future.

7. Your federal income taxes pay for a growing share of Medicare’s costs.
Subtract #5 above from #6 (answer: $120,000). From this amount, seniors pay for hospital outpatient care and doctor visits (Part B) and prescription drugs (Part D). The rest is paid by federal income taxes and borrowing – which raises the federal debt.

8. The number of corporate healthcare firms on the Fortune 100 list has increased from zero in 1965 to 15 today.
These firms have benefited greatly from the current Medicare infrastructure. According to Gibson and Singh, the ties that bind Wall Street and Washington in the healthcare industry are strong and their interests are often at odds with those of seniors and boomers.

9. The federal government borrows money from China to pay Medicare bills from hospitals, doctors and drug companies.
Currently, interest rates are low, but can (and will) change in the future. This is not good for our long-term debt problem.

10. President Obama and Rush Limbaugh agree on this fact.
Paying for Medicare is not sustainable at the rate these costs are growing.

11. Between now and 2035, the healthcare industry will reap from Medicare a larger share of the country’s gross domestic product.
As Medicare grows, the federal government will have less money to pay for the nation’s infrastructure, investments in science and technology, education and national security. According to the Congressional Budget Office, if we do nothing to curb this cost, Medicare will consume nearly 25 percent of the value of all goods and services our country produces by 2082. In 2006, Medicare spending was at three percent of GDP.

12. The number of doctors who specialize in caring for seniors is shrinking when more are needed.
The median salary for geriatricians is lower than almost all specialties, threatening the number of new doctors willing to fill this growing role.

13. Medicare’s money for hospital care begins to run out in 2024.
This fact about Medicare Part A comes from a non-partisan report by the Medicare trustees.

14. An estimated, 79,200 Medicare beneficiaries die each year because of preventable harm in hospitals.
This is just an estimate. We really don’t know because actual data of those fatally harmed is seldom reported on a consistent basis. Based on a 2013 report in the Journal of Patient Safety, this number could be much higher.

15. Annual Medicare fraud and abuse is equivalent to one million seniors’ lifetime Medicare contributions.
FBI fraud estimates can be up to 10 percent of what Medicare spends – about $60 billion. In addition, this amount does not include the mistakes made in coding payments and calculating the money Medicare owes to providers. In 2010, Medicare estimated $48 billion was made in ‘improper payments.’

‘Medicare Meltdown’ not only points out the problems but provides a road map on how Medicare can be fixed in the future. Much of what we need is the political willpower to make changes so that we can efficiently provide the necessary care to our seniors.

After all, a mother robin has only so much food to distribute.

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