In the last 40 years, federal spending on entitlements, including Medicare, Medicaid and Social Security, has soared from less than half of Washington’s budget to almost two-thirds. This past year alone, Medicare spending totaled about $560 billion -- more than triple what it was two decades ago, even after inflation. Over the next decade, as the population ages, Medicare spending is projected to continue to grow at rates far outpacing inflation.
This rate of growth is simply unsustainable. If not checked, it will eventually bankrupt the federal government. It’s critical, therefore, that Washington put these vital programs on a sustainable path.
One way to reduce costs and have healthier seniors is to focus Medicare more on preventing health problems. Along with my Democratic colleague Sen. Ron Wyden of Oregon, I’ve introduced a bill that begins to do that – and it’s modeled on an innovative program developed by our state’s Cleveland Clinic.
Better Health Rewards, as we’ve called our legislation, will reduce Medicare’s soaring costs by incentivizing seniors to lead healthier lives. It will save taxpayers money because healthier seniors will have fewer doctor and hospital visits and fewer chronic diseases.
Our program changes the focus of Medicare from dealing with people when they’re sick to promoting healthy behaviors. The program will be completely voluntary and it shouldn’t increase Medicare’s cost because the program will be added to annual wellness visits, which the government already is paying for. It works like this: At the first annual wellness visit, Medicare providers will assess patients across six target categories that recognize current health challenges -- blood pressure, for example -- and are consistent with the best practices we’ve seen around the country. Seniors will receive points for maintaining and achieving progress in each of these areas. If they earn enough points, they’ll earn financial rewards in the second and third years.
I believe this fundamental change of approach will lower overall health costs significantly over the long run. For now Sen. Wyden and I give Better Health Rewards a three-year lifespan so we can see how it works and collect data and information to determine whether it’s sound and should be expanded as a way to help fix Medicare.
There’s already evidence that Better Health Rewards will pay off. The Cleveland Clinic has a strong history of leadership on employee wellness. Their Wellness Institute brings in businesses from around the Cleveland area, helping those businesses set up wellness programs for their employees, so the businesses can see savings and healthier employees. It’s a twofer.
Two years ago, the Cleveland Clinic saw that their own health care costs, around $300 million annually, continued to escalate despite the steps they’d taken to encourage their own employees to lead healthier lives.
To tackle this problem, they decided to incentivize employees with chronic diseases to enter into disease management. The incentive they chose was a refund of the employee’s annual health care premium increase.
Fast forward two years. The program has been highly successful, saving the Cleveland Clinic $15 million in 2011 and lowering hospital admissions for the participating employees. As Dr. Toby Cosgrove, the president and CEO, said on March 28 when he and chief wellness officer Dr. Mike Roizen came to Washington for our unveiling of Better Health Rewards, “for the first time we began to change the slope of the inflation of our health care costs.”
But it’s not just about costs; it’s also about healthier, happier employees. Added Dr. Cosgrove, who says he’s regularly thanked by employees who’ve benefited from the program: “It has been probably one of the most gratifying things we’ve done, both from the standpoint of the health of the individuals, and also from the fact that we have wound up saving money from it.”
The Cleveland Clinic is not the only Ohio advocate for the Better Health Rewards legislation. The Ohio Department of Health supports this bill. Its director, Dr. Theodore E. Wymyslo, said “under this model, everyone wins.”
Sen. Wyden and I and others are working on larger structural proposals to fix Medicare. But that should not keep us from implementing sensible programs that can help get to a more comprehensive solution.
Promoting wellness and saving taxpayer dollars is a twofer Washington should get behind. Our Better Health Rewards legislation is the right start.