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Pioneer Editorial: Medicare reform for fair system

Thursday marked the 44th anniversary of the July 30, 1965. signing by President Lyndon G. Johnson of the act that created Medicare.

It was a fundamental step in assuring a decent quality of live for our seniors age 65 and older by providing a basic health insurance policy to them at reasonable cost. At that time, former President Harry S Truman, 20 years after he first proposed universal health care, became Medicare's first beneficiary.

Today, Medicare provides affordable and quality health insurance to nearly 45 million seniors and people with disabilities.

Also today, America struggles with enacting new health care reforms that seek to extend some kind of health care coverage to the nearly 50 million Americans who don't have coverage. University health care is on the table, but with a Congress nearly spit on the merits of that proposal. Some are looking at Medicare, saying if it works for seniors, why not for the rest of American that can't afford private insurance premiums?

Meanwhile Thursday, Minnesota's two senators joined with Wisconsin Sen. Herb Kohl to introduce legislation to reform the Medicare payment system to reward hospitals for quality, efficient care. The Medicare Payment Fairness Act of 2009 would reform Medicare by paying hospitals for the quality, not quantity, of care.

Changes would reduce the regional differences in Medicare spending by shifting the nation to a coordinated integrated delivery system like Minnesota.

Sens. Al Franken, Amy Klobuchar and Kohl predict that more integrated care could save taxpayers an additional $100 billion a year.

"We need to reform Medicare to pay hospitals for the quality of care they provide and transform the current health care system into one that concentrates on delivering the best care for patients," says Klobuchar, She often cites that under the complicated Medicare formula, Minnesota is reimbursed less than Florida, even though Minnesota provides a higher level of care more efficiently.

Specifically, the Medicare Payment Fairness Act will increase efficiency by creating a value index within the formula used to determine Medicare hospital reimbursements. Linking rewards to the outcomes for the entire payment area creates the incentive for physicians and hospitals to work together to improve quality and use resources efficiently.

Currently, Medicare does not take into account the value of care provided by hospitals when determining their payments for providers. Despite periodic efforts at reform, Medicare pays for volume, not value. More tests and more surgeries mean more money - even if the extra tests and operations do nothing to improve a patient's condition.

These changes would at least make Medicare work better and save money to boot. It comes at an opportune time, on the 44th anniversary of the important senior health care program.