Grassley to Examine Medicare's Future

Sitting in his office in the 52-bed Myrtue Memorial Hospital in Harlan, Iowa, CEO Stephen Goeser says he can see the financial woes of the Medicare system chipping away at the financial stability of rural hospitals in the state.

"Even with an organization of our size, there are days when we don't have a single non-Medicare patient in our beds," he said. "A good number of rural hospitals are struggling to make it on Medicare payments and, as a result, some of the most fragile rural hospitals could close."

In rural America, hospital administrators say they have reached a breaking point as Medicare budget cuts force them to slash their bottom line just to survive, let alone make a profit. The 35-year-old federal program, which reimburses hospitals based on a scale dependent on the type of care given to older patients, is not doing its job as more and more elderly enter the system, they say. An estimated 39 million Americans currently depend on Medicare as their health care insurer.

In response to the ever-worsening Medicare crisis, Sen. Chuck Grassley, who chairs the Senate's Special Committee on Aging, will launch an inquiry into the future of Medicare beginning this week. He hopes the Committee's first hearing of the year will jumpstart the consideration of options, one of which is a plan drawn up by Sens. John Breaux and Bill Frist, which is geared to preserve and strengthen the ailing program. Grassley has been and will continue to be an outspoken advocate for Medicare beneficiaries.

"The Right Medicine? Examining the Breaux-Frist Prescription for Saving Medicare," will take place on Tuesday, Feb. 8, 2000, at 9:30 a.m. in room 562 of the Dirksen Senate Office Building. The Committee will examine the Breaux-Frist plan, including its provisions for providing prescription drug coverage.

As more and more older Americans need increased care, hospitals in the Midwest are bulging with Medicare patients. In Iowa, which has the oldest population over age 85, the problem could not be much more serious.

Two-thirds of hospitals across the state depend on Medicare for more than 60 percent of their inpatient revenue. And, as a tide of baby boomers retires in the coming decade, that number will soar to almost 75 percent at his hospital, Goeser said. In general, Iowa hospitals report that Medicare is their lowest payer.

All retirees pay the same taxes into Medicare, and those in rural states like Iowa have the same basic Medicare coverage as all beneficiaries. But they do not have the additional Medicare options, such as Medicare + Choice available to their counterparts in urban areas. Three years ago, Grassley led and succeeded in his effort to bring more equity to the reimbursement formula for the Medicare + Choice.

Grassley also cited a need for seniors - especially those in the low-to-middle-income range - to be able to get prescription drug benefits through Medicare. The major portion of care 30 years ago was given in hospitals, but today prescription drugs can often heal people without a costly hospital stay, he said. Currently, Medicare recipients cannot get discounts on prescription drugs, sometimes leaving those on a limited income to choose between buying food or medicine.

"Restructuring Medicare is really a fairness and equity issue for Iowa seniors and all seniors in America," Grassley said. "One challenging question before us is how to add a drug benefit to the program while ensuring the long-term solvency of the program. But if we want Medicare to be there for our children and our grandchildren, then we must address these challenges."

It is urgent that Congress fix the Medicare system. The 1999 annual report by the Trustees of the Social Security and Medicare Trust Funds found that Medicare Part A, which funds hospital coverage, could become bankrupt within 15 years.

If reforms are not enacted to help rural America, Goeser knows the Medicare situation will worsen and rural hospitals will begin to close, forcing seniors to seek medical care in urban areas, sometimes a lengthy drive from their homes.

"If you think about where urban centers are across Iowa, you get on I-80 going to Council Bluffs to Des Moines and that's about 130 miles -- what happens if smaller hospitals start closing between the cities?" Goeser said. "We can't completely rely on urban hospitals to provide for the care."