Daschle: It's Time to Move Beyond 'Cut & Shift' for Medicare

Former Senate Majority Leader Tom Daschle, in a conversation with RealClearHealth, discusses the options policy makers have to improve long-term health care. He also calls for moving beyond policies that cut Medicare costs and shift them from the federal government other parties.

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KARL EISENHOWER, RealClearHealth: One of the issues you've been focused on recently is long-term care. Some people don't realize that, for the most part, Medicare does not pay for expenses for nursing care and other types of long-term care. With the baby boom generation aging and with Americans living longer, this something that's touching more families. So, as you've looked into this issue, what from a public policy point of view can the Congress do to help deal with the expenses related to long-term care.

TOM DASCHLE: That's a very, very important question and one that I don't think has yet been answered adequately. What we did at the Bipartisan Policy Center over the last year, actually, is bring in the best and the brightest minds around the country and consider just what options we have available to us.

Private insurance by and large today has not worked well. Only 7 percent of people who are interested in long-term support and services actually rely on private insurance. Medicaid, unfortunately, is the de facto fallback position for a lot of people.

EISENHOWER: And that's Medicaid not Medicare.

DASCHLE: Medicaid, exactly. Unfortunately, it's becoming an enormous cost to the states as well as to the federal government. And that in and of itself is not really the answer.

So the question is: Can we come up with more innovative ways with which to deal with both the catastrophic costs associated with long-term support and services, as well as providing some mechanism for chronic illness management in older ages. We're beginning to look at that. We've come up with some ideas, providing more limited insurance to make it more affordable and maybe more universal. Looking at catastrophic approaches, providing some flexibility with regard to the way the states look at long-term support as they go forward.

But this is an issue that's going to continue to dominate a big part of the landscape on health policy as we go forward.

EISENHOWER: And as the population ages, the costs of Medicare continue to increase ...

DASCHLE: No question.

EISENHOWER: ... in part just because the Medicare population is growing, but also because health costs traditionally have risen faster than inflation. And at some point, that's going to become an issue of insufficient funding through the current payroll to continue to pay for Medicare. That's farther into the future than we had expected it to be, because medical inflation has subsided a bit. But at some point Congress is going to have to look at funding Medicare. When do you think that will be, and what are the pieces of the puzzle?

DASCHLE: Well, we really can't wait. We really should be addressing this issue now, before it becomes a real crisis. We know -- all you have to do is to look at the trajectory of costs and the availability of resources and the demographics and know that it isn't that far away.

So, Congress really has one of two choices: They can continue to do what we've done -- and I have to admit some guilt to this myself -- and that is: cut and shift. That is cut the costs for Medicare and then shift the costs onto somebody else. Onto the private sector. Onto beneficiaries. Onto payers. Onto providers.

I don't believe we ought to continue to use that practice. The better practice is to redesign and improve our whole system. And I think the best way to do that is to focus on two things in particular: And that is the value of the service that is being provided and the overall quality of that service as you look at both costs and availability.

I don't think there's any question: We can do a lot more on both of these. We're doing a little bit with regard to moving toward value at this point. We can do a lot more. We're doing a little bit with improving the overall quality and looking at evidence-based approaches to care. We need to do a lot more. But only in doing that can we get our arms around this challenge.

EISENHOWER: From an institutional point of view, do you think that Congress will end up looking at Medicare in isolation, or does it need to be part of a larger fiscal package along with tax reform and some other things.

DASCHLE: If we look at it in isolation, my fear is that we're going to do what we've always done, which is simply to cut and shift. I think it has to be looked at in a larger context, because, as you suggest, there are other factors, other public policy issues that are very much at play here as well. It's all inter-related.

One of the big problems we have with our health care sector today is that, I don't believe we've ever had a system. We've had a collage of sub-systems. And those subsystems are siloed and are not integrated nearly to the degree they should be. So it doesn't solve the problem to simply look at one silo. We've got to look at the whole collage of subsystems and do a better job.