By U.S. Sen. Chuck Grassley
Young, old or in between, every worker collecting a paycheck has a stake in Medicare. The federal health insurance program covering older and permanently disabled citizens is funded through a payroll tax collected on wage earners and cost-sharing by recipients.
Medicare has provided health and economic security to more than 130 million Americans since being signed into law on July 30, 1965. Looking ahead, 21st century Medicare needs to keep pace with an aging American society and advances in modern medicine within the context of fiscal sustainability. Broadly speaking, Medicare viability requires that reforms prioritize value over volume. Rewarding quality, not quantity, would do a lot of good for the taxpaying public and the public health.
Medicare spending accounts for nearly 14 percent of the federal budget and factors heavily into the nation’s health care system, accounting for about a fifth of the health care spending in the United States. Medicare also makes a big footprint in the network of hospitals and health care providers serving Iowans. Medicare covers 531,209 people in Iowa, spending $4.3 billion per year in the state.
Hospitals serve as economic anchors and medical lifelines in their local communities. Iowa’s 118 community hospitals provide more than 71,000 good-paying jobs with a $4.2 billion payroll that reverberates throughout the region, supporting thousands more jobs that help grow the economy and expand the revenue base that helps support public services.
As a U.S. Senator for Iowa, I have long appreciated that community hospitals inject a dose of economic vitality and civic leadership in their communities. As an employer and as a provider of health care services, hospitals are indispensable assets to attracting newcomers, welcoming businesses, serving residents and providing good jobs. Young families to elderly residents want to live in communities where essential medical services are close to home.
Iowa community and regional hospitals serve a sizeable share of Medicare patients but tally lower volumes than urban providers that serve a larger pool of residents. The numbers make it harder for these hospitals to keep their doors open for comprehensive and critical care services when the revenue coming in doesn’t pay the bills or make payroll.
Many rural hospitals also find it difficult to recruit and retain doctors, in part due to Medicare reimbursement rates. A federal funding formula known as the Sustainable Growth Rate (SGR) presented an unfavorable payment system adversely affecting health care providers serving Medicare patients. Increasingly, doctors were limiting the number of Medicare patients they would see. Some left the Medicare program altogether. For the last 17 years, the SGR calculated shrinking Medicare reimbursements annually for doctors. Each year Congress would come through in the nick of time to reverse the SGR. The legislation became known as the “doc fix,” spending nearly $170 billion on short-term remedies. After nearly two decades of such legislative band-aids, Congress has agreed on a bipartisan cure. The President signed the Medicare Access and Chip Reauthorization Act into law in April, ending years of uncertainty for health care providers and bringing stability to the health care delivery system for Medicare patients.
As Congress hammered out the bipartisan agreement this year to permanently end the SGR and enact a better payment system, I supported the effort to reward physicians based on the quality of the care provided instead of the volume of care. I also worked to make sure key measures important to Iowa were adopted in the package.
Iowans who have paid into the Medicare system their entire lives are counting on accessible health care close to home. The same goes for all Americans living in less populated areas of the country. I’ve teamed up with Sen. Chuck Schumer of New York to strengthen the financial stability of hospitals serving our rural communities.
Our bipartisan measures adopted as part of the recently enacted law will give hometown hospitals and community health centers breathing room to continue serving patients with a dedicated federal funding stream that was set to expire.
Specifically, the law also extends for two years funding for the Children’s Health Insurance Program (CHIP); the Maternal, Infant and Early Childhood Home Visiting program; Medicare Dependent Hospitals; Low Volume Hospitals; and, the Teaching Health Center program that helps bring physicians to rural communities.
The Medicare Dependent Hospitals in Iowa include Fort Madison Community Hospital, Grinnell Regional Medical Center, Keokuk Area Hospital, Lakes Regional Health Care, Skiff Medical Center and Spencer Municipal Hospital.
These provisions will give a welcome boost to hometown hospitals over the next couple of years. In the meantime, I will keep working in Congress to address Medicare’s long-term solvency issues that include long-term solutions for rural providers and the communities they serve.
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