As former overseers of Medicare, which together with Medicaid makes up a staggering 23 percent of federal spending, we offer this advice: Find savings in Medicare by replicating the market-based approaches of the prescription drug program.
Evidence of the success of the Medicare prescription drug program is mounting. Last month, we learned that the average Medicare prescription drug premium will decline next year. It's the second time premiums have dropped since the drug benefit was initiated five years ago. That's a welcome deviation from the 5 percent rise in premiums for all of healthcare.
We also learned recently that the Medicare prescription drug program is reducing Medicare hospital and nursing home admissions, saving $12 billion because of reduced use by program participants. The study, published in the Journal of the American Medical Association, found an average savings of $1,200 per year for seniors who had inadequate drug coverage before Medicare Part D.
Now in its fifth year, Medicare Part D is costing 41 percent less than the Congressional Budget Office originally projected. And program participants give it high marks — satisfaction percentages among seniors are in the high 80s, impressive for any government program.
via hudson.org