Scully: Spending Report Signals Need for Medicare Reform

Baltimore

Not only is health care spending growing, but it is growing at an accelerated rate, according to a Jan. 8 report from the Centers for Medicare and Medicaid Services.

Americans and the federal government spent $1.4 trillion on health care during 2001, an 8.7 percent increase, compared to spending during 2000.

Public health care spending — which accounted for nearly half of the total — jumped 9.4 percent, as Medicare reimbursements increased and Medicaid rosters grew. “Legislation [including the Benefits Improvement Protection Act of 2000] added $7.5 billion to total Medicare spending in 2001,” the report said.

Increasing at its fastest rate since 1993 — 10.8 percent — Medicaid spending soared to $224.3 billion during 2001. The report attributed this growth to an 8.5 percent rise in Medicaid enrollment, due to the national recession and to the expansion of state programs for the uninsured.

These numbers prompted CMS Administrator Tom Scully to call for legislative action. “If there ever was an argument for Medicare and Medicaid reform, this report is it,” he said.

While states are all but begging for additional federal assistance, Tommy Thompson, secretary of the U.S. Health and Human Services Department, is taking the problem to the American people, launching a series of town hall meetings to allow average citizens to address the problem of rising health costs. “What will emerge from these meetings will be a series of legislative proposals and pilot projects that can be adopted by states to strengthen our health care system,” Thompson said.

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