Clinton's Shell Game On Medicare

Leadership is the art of coaxing people into doing what they know they must do. That's why President Clinton's shell game with Medicare reform is so troubling. The President has the persuasive skills to make clear to America's elderly why they should join most of their children in managed care. He can show why it's necessary to cut growth in government expenditures on medical care to balance the budget--and why this would spur economic growth and help everyone. He can do this, but he won't. That's a major mistake.

Instead, Clinton is taking the easy way out. In the budget plan he'll submit to Congress in early February, Clinton will offer to cut Medicare spending in part by shifting $55 billion over five years from the Federal Hospital Insurance Trust Fund, which pays hospital bills and is hurtling toward bankruptcy, to the fund that covers doctors' bills, which has unlimited access to general revenues. The Administration's dubious rationale is that it is just putting home health-care costs where they belong.

Not so fast. The maneuver does nothing to address the real problem: Fee-for-service medical care is too inefficient and expensive, not only for Corporate America but also for publicly supported, aging America. Incentives must be created to lure people into HMOs. Medicare premiums should go up for fee-for-service visits. Co-payments should rise. This will help make HMOs more attractive. Millions of Medicare recipients have already shifted to HMOs because Medicare won't pay for drugs but most HMOs will. In fact, another Clinton Administration proposal to chop $20 billion over five years from Medicare HMO premiums could jeopardize HMOs' offering these benefits.

President Clinton has a chance to redeem himself for his shameless "mediscare" politicking during the election by exercising some leadership in cutting Medicare costs. He should use that chance to lead the nation into doing the right thing.

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