There were early signs that trouble lay ahead for the Bush administration's attempt to enact the most sweeping changes to the Medicare system in a generation. So far, the road has been rocky with criticism of the program's design (even the experts generally find it confusing) and reports of glitches with Medicare's Web-based system for participants. Fiscal conservatives on the left and right have been critical of the huge price tag. Supporters beg to differ, arguing that the private running of the program is the only way that spending can be brought into check. So far premiums look like they will be lower than first anticipated, but it's too early to tell how many seniors will sign up and how the Medicare benefit will co-exist with the private retiree drug benefits. You can expect the program to play a big part in the 2006 election.
Medicare spending may be on many minds in Washington, but healthcare industry observers, especially those who sit in hospital board-rooms, are well aware of another problem that is knocking at the door. Hospitals, which already face the burden of providing charity care for the uninsured, remain on the front lines as the national trend toward "consumer driven" health plans develops. The Medicare Modernization Act introduced health savings accounts (HSAs), and employers are now moving fast towards high-deductible health plans (HDHP).
Supporters of the HSA movement are in love with the idea of encouraging personal responsibility, arguing that healthier lifestyles and empowered customers can't hurt. They are right, of course. Then again, so are critics who point out that high-deductibles are inappropriate for some consumers and will end up with more people unable to afford care. Like it or not, the HDHP is probably here to stay, as is the new retail environment in healthcare, which will impact hospitals and physicians.