July 28,2015

Wyden Delivers Speech on the Future of Medicare and Medicaid on 50th Anniversary

As Prepared for Delivery

WASHINGTON - Senate Finance Committee Ron Wyden, D-Ore., today delivered a speech at the "Future of Medicare Forum" at the Newseum. At the event, hosted by National Journal, Wyden outlined four key areas that he sees as important areas to watch in Medicare and Medicaid. More information and video can be found here.

Wyden's full remarks can be found below:

I’m very appreciative of the opportunity to speak just two days before the 50th anniversary of Medicare and Medicaid becoming law. Medicare and Medicaid, in my view, are among the great steps forward for the American people. More than 100 million Americans now have access to high-quality health care because of one or both of these programs. The creation of Medicare and Medicaid slammed the door on the day when seniors were the group most likely to be living in hardship, and when old people were warehoused in poor farms.

As giants in American health care, Medicare and Medicaid will have to evolve and respond to the big challenges of 2015 that were not contemplated in 1965. So this morning I want to make four predictions about the evolution in Medicare and Medicaid I see coming down the pike.

First, I believe Medicare and Medicaid will lead a revolution in caring for people at home. Nobody who’s dealing with a drawn-out illness wants to spend their every waking moment in doctors’ offices for months on end. And the fact is, Medicare and Medicaid can’t afford those costs, especially with the expense of treating chronic diseases like diabetes, cancer and Alzheimer’s. Medicare is no longer about broken ankles or sprained wrists. Ninety-three percent of Medicare costs today go to chronic conditions like these, which require intensive, careful treatment. Without a significant shift in the way people get health services, the price tag of chronic care is going to keep getting worse.

Fortunately, in my view, there’s beginning to be a movement toward home care that offers high-quality, cost-effective treatment. Last month, Medicare announced that one of its innovative, cost-saving test programs, called Independence at Home, is turning out strong results, unequivocally saving money. More than $3,000 saved for each patient, who got what they wanted most out of the health system – to be treated where they live.

Housecall Providers, based in Portland, Oregon, is one of the program’s early participants. They’ve been doing tremendous work for a long time, and they were the reason I fought to include the program in the Affordable Care Act. Just this month, Congress came together to extend Independence at Home, and I believe it should be expanded and made permanent.

Medicaid is going to play a role in this shift toward home care, too. For example, the Medicaid program in my home state of Oregon gives Coordinated Care Organizations the authority to offer services that might not sound like medical care at first. Instead of treating a patient for sprained ankles or broken wrists over and over again, they’ll visit patients’ homes and pay to fix broken floorboards or dangerous rugs that cause people to fall. Instead of treating a patient’s dehydration every time the temperature spikes, they’ll buy an air conditioner. They’ll check for mold or teach proper nutrition. The long-run effect is less time in the doctor’s office and emergency room.

In my judgement, embracing this smart approach to home care makes all the sense in the world. Hospitals put a lot of effort into keeping their facilities clean and safe for patients, and it’s a proven fact that their effort pays off. So as home care becomes more common, our health programs ought to apply those same techniques where patients live.

Second, Medicare and Medicaid will lead reforms on pharmaceuticals. I believe in the future the pricing of pharmaceuticals will be connected in some way to the value of treatment. Solving the challenge of skyrocketing drug costs is going to take a lot of tough debate and hard work in Congress. But it’s an issue that cannot be ducked. Today, pharmaceuticals are curing diseases that were death sentences as recently as a decade ago, and that’s tremendous news. Yet the sticker prices for these drugs are often incredibly high, and they strike many Americans as defying common sense with how they increase over time.

The challenge here stretches far beyond Medicare. It was reported last week that Kentucky spent a full seven percent of its Medicaid budget on one of two hepatitis-C drug treatments for only 861 people. Medicaid is a lifeline for more than 70 million Americans, but it’s not built to handle that kind of skyrocketing cost. Neither is Medicare, and the budgetary experts at the CBO are starting to ring the alarm bells. Over the next ten years, the cost of Medicare Part D will rise nearly twice as fast as the rest of the program. Some of the specialty drugs are not even Part D drugs.

The status quo is unsustainable – there’s no denying that fact. So Congress is going to tackle this issue in a bipartisan way, or else drug costs could continue eating up Medicare and Medicaid budgets and wiping out Americans’ savings. 

Third, I believe Medicare will lead the disclosure and the use of health care data. My friend Senator Grassley and I spent years on a crusade for data transparency in Medicare. In 2014, the administration opened up a massive trove of information. The raw material is out there, and so the next challenge is building tools for patients to use.

The good news is that process has gotten started. This may be the only room outside the HHS building where I can use the word “datapalooza” without prompting a whole lot of groaning and eye-rolling. But what you haven’t seen yet, in my view, is a breakthrough that puts this data in the hands of everyday Americans. Open health care data ought to help people figure out which doctors and nursing homes are right for them, or which hospitals or specialists excel in specific areas. And it should help show how far a dollar goes with different treatments or providers.

I see open data as a big opportunity to improve care while creating lots of high-wage tech jobs in the process. There are a lot of tech-savvy people – whether they’re here, in the bay area, or in the Silicon Forest of my home state of Oregon – who can design smart ways to put this data to use. It fits right into the goal of rewarding care based on its quality instead of its quantity. And that’s a big deal, since you can’t go a day in this town without hearing a health care wonk talk about value-based payments.

Fourth, Medicare will lead the debate on improving end-of-life care. I believe all roads are headed toward giving patients more choices and a better quality of life when they’re suffering in the advanced stages of terminal illnesses. Too many people have faced the impossible choice of when to cut off treatment and enter hospice care. But just last week, Medicare announced that it’s going to expand a program I authored called the Care Choices Model that’s all about putting patients and their families in the driver’s seat. Care Choices says it doesn’t have to be black and white. Patients will have the flexibility to continue treatment after they’ve gone into hospice.

At the time when I pushed for this program to be included in the Affordable Care Act, people were shouting about death panels and pulling the plug on grandma. Fortunately, the acrimony and hyperbole around this issue have quieted down. End-of-life is a painful subject, but people on both sides of the aisle now recognize that it’s time to give patients and their families more choices.

Certainly there are many other ways that Medicare and Medicaid will evolve over the years ahead, right along with the rest of the health care system. For example, there has already been interest in capitalizing on the provision in the Affordable Care Act called the “State Innovation Waiver,” or Section 1332. This seemingly small piece of the ACA could have a big impact for states that put it to use. The waiver is all about is setting a high bar for quality and coverage, and giving interested states the flexibility to meet that mark in their own innovative ways. 

All the while, the push toward value-based payment is going to continue surging forward. And I, for one, believe that more states will come around and expand their Medicaid programs under the Affordable Care Act. It took nearly two decades for all 50 states to adopt Medicaid initially, so history shows that this process can unfold over time.

At the end of the day, it’s really about the patient. For example, Medicare today still does not guarantee catastrophic coverage, and that’s going to have to change. Millions of people have that guarantee in the private sector. This is an area where Medicare is playing catch-up. Seniors ought to have the protection of an out-of-pocket maximum in Medicare.

So we’ve made an enormous amount of progress over these 50 years. Now as we celebrate this anniversary, I think we’ve got an opportunity to talk about how to make the 100th anniversary as celebratory as this one.