Fix Medicare First

As the health care battle rages on, we take time to look back at the last major federal health care plan, the $600 billion-a-year elephant in the room: Medicare. Why should we look at Medicare you ask? Because Medicare, you may be intersted to know, was broken before it even started, as is clear in this interview with Joe Califano, the major decision maker of LBJ's 1965 Medicare initiative:

Mr. CALIFANO: By late '67, the budget data was just stunning. I mean 1968, we knew that system should be changed. We asked Congress for authority to change it.

JOFFE-WALT: But you just created it.

Mr. CALIFANO: I know it. But we saw what was happening with costs so fast. So fast.

KESTENBAUM: But they couldn't change it. Doctors now like the system. They were getting paid for work they'd previously done for free. And that was that. This system, with all its problems, stayed in place for almost 30 years. Meanwhile, medicine got more expensive.

The fee-for-service model that Medicare cemented into practice drove costs up so fast that within 2 years even President Johnson exclaimed that they needed to rework the payment system. They never did.

There have been some band-aid solutions proposed here and there, but despite its fundamental flaws, most of the original Medicare model is still in place. It is still causing medical costs to skyrocket, and the cost of Medicare itself doubles every four years.

So to all you would-be health care reformers, before you go mucking with the rest of the system, how about you fix Medicare first.