PRIVATE HEALTH COMPANIES SET FISCAL EXAMPLE

Special to the Southeast Missourian

As expected, the Medicare trustees reported that Medicare's hospital fund will run out of money in five years -- or as soon as four years from now if its condition continues to deteriorate faster than expected.

The severity of this situation cannot be overstated. Unless changes are made to the program, major tax increases for working Americans and cost increases for Medicare beneficiaries are the only ways to prevent bankruptcy.

But there is a way to avoid these unacceptable alternatives. One only has to look at what the private health care system has accomplished. Like Medicare today, the private sector was suffering from double-digit cost increases not too long ago. But the private health care system responded to demands for greater value by developing new ways of delivering and financing health care. As a result, growth in health care costs have been curbed and quality improved.

Study after study demonstrates that the private sector is succeeding in its quest to contain costs and improve quality. Medicare, on the other hand, has been shut off from these innovations and is paying the price through higher-than-necessary spending increases.

It doesn't have to be this way. The two public Medicare trustees said that Medicare needs to learn from the changes occurring in other parts of the health care system. Medicare spending growth could be slowed to a more reasonable level by taking the program out of the hands of its unresponsive bureaucracy. Beneficiaries should be put in the driver's seat; letting them choose the type of health coverage that best meets their need will help root out waste and inefficiency.

The trustees' report is a warning to us all. Change is necessary. By following the example set by the private sector, Medicare can be kept running for current and future generations. But there is no time to waste. Delay will only make the task more difficult.

Pamela G. Bailey is the president of the Healthcare Leadership Council in Washington, D.C.