Medicare

Medicare reform is certain to be on the agenda of the next administration and Congress. During the next two presidential terms, the number of Americans over the age of 65 will grow by 9.5 million - an average net increase of 3,255 new Medicare-eligible beneficiaries daily. This is nearly three times the net increase during the eight years spanning President Bush's term in office. Medicare is claiming an increasingly large part of the federal budget. Medicare Part A, which funds hospital care, is expected to exhaust its reserves by 2019; with rising unemployment contributing less revenues to that fund, insolvency could occur earlier. In addition, more individuals will retire without employer-sponsored retiree coverage, which paid some of their costs in the past.

All of this points to an urgent need for reform. A host of solutions will be debated, such as value-based purchasing, reductions in Medicare Advantage payment, direct negotiation for prescription drugs, and integrated payments. All of these hold challenges and opportunities for health industry executives attempting to navigate new regulations and payment models.

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