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Frist Calls for Slower Growth in Federal Medicare Spending

February 27, 2006 -- Policymakers must take a series of steps now to control federal Medicare spending or face an unfunded liability five times worse than Social Security over the next 75 years, Senate Majority Leader Bill Frist, R-Tenn., said Monday.

"The demographic aging revolution dictates that the spending path we're on is unsustainable," Frist said in remarks at the Detroit Economic Club.

Raising taxes, Frist said, would hurt the economy and "we can't turn our backs on our most basic responsibility—national security." Nor can the nation "simply do away with the seed corn for future growth and global competitiveness—education and research investment."

Instead, Frist said, "The place to begin is Medicare. Political figures in Washington aren't talking about it. But let me tell you—if they really care about the country's future—they should be."

Ensuring that taxpayers get the most value for every federal dollar spent on health care and managing chronic disease more effectively would help reduce Medicare expenditures, Frist said, as would improving prevention efforts.

"This sounds so obvious. But politicians in Washington don't seem to get it. Washington focuses on flow of money—who pays and how much, ignoring reducing the amount of disease for which you're paying," Frist said.

Improving health care information technology will save money and improve the quality of care delivered, as will increasing consumer choice, Frist said.

"Income relating," which links the level of benefit provided to an individual's income, is "inevitable to avoid the intergenerational inequities that would otherwise stem from the demographic aging revolution around us," Frist said, referring to the more than 77 million baby boomers set to flood the Medicare system in just five years.

The Medicare drug law (PL 108-173) includes a provision that requires some higher-income Medicare beneficiaries to pay more for their Part B coverage. President Bush's fiscal 2007 budget plan lowers the threshold for "income relating" even further. Opponents of the idea say it will weaken public support for the program over time because not all participants will be treated equally.

Frist also urged that Medicare become a "consumer-driven, patient-centered program" that is "provider-friendly," encouraging provider participation by rewarding quality and provider performance "rather than just blindly reimbursing for treatment."

Overhauling Medicare "is a matter of fiscal responsibility" that will help the federal government "lead the way in transforming the face of American health care," Frist said.

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