Introduction

Medicare and modern medicine are badly unprepared to meet the nation's greatest contemporary health challenge: chronic illness. Diseases such as arthritis, coronary artery disease, diabetes, and asthma now afflict more Americans, cause more disability and death, and cost more money than any other health problem. Over three-quarters of the Medicare population suffers from one or more chronic conditions. In less than 20 years, care for these conditions will consume 80 percent of the nation's health care spending.

While modern medicine and public health have dramatically improved our ability to survive acute threats like heart attacks and infectious diseases, chronic conditions demand new and fundamentally different approaches than those currently offered. For well over a century, medicine has emphasized acute care. Doctors are trained to "find it and fix it." A broken bone needs a cast. A heart attack leads to a bypass operation to correct a clogged artery. A badly infected foot is amputated.

While obviously necessary in many cases, these medical responses often represent a failure to act proactively against chronic illnesses, which are by definition ongoing and resistant to quick fixes. Osteoporosis, which weakens bones and makes them brittle and fragile, can be managed with diet and drugs, as can coronary artery disease. Properly fitted shoes and regular foot exams prevent disabling diabetic foot ulcers.

Expanding research demonstrates that so-called "care management" or "disease management" programs effectively and efficiently mitigate the disability, suffering, and cost associated with chronic illness. In care management programs, doctors detect and prevent deterioration and complications from chronic illnesses. Health professionals work closely with patients to develop a treatment plan, monitor progress, and assess results in a continuously improving process.

Unfortunately, these programs remain stymied by the outmoded payment systems employed by Medicare and most private insurers. These systems reward doctors for doing things "to" patients -- procedures like heart surgery or amputation -- not for working "with" patients to coordinate their care, engage them in their own care, and monitor their progress. The lack of a drug benefit shows the absurd conclusion of this process. Medicare will pay once you've been hospitalized with a stroke, but will not pay for anti-hypertension drugs to prevent it. In the worst cases, Medicare writes checks for procedures that are not only unnecessary, but harmful.

The failure to pay for better chronic care reflects a larger failure to pay for quality improvement in health care. Medicare's Industrial Age regulatory machinery inhibits its ability to innovate and adapt, while inviting professionals, citizens, and political interests to spend their energy outwitting the system rather than outwitting illness. Entrenched attitudes, including the belief that poor health is an inevitable consequence of old age, further impede progress.

New research, new communications technology, and a new willingness on the part of individuals to participate in their own health care offer Medicare the best opportunity in a generation to redirect its energies toward the broad goal of healthy aging. By encouraging innovations responsive to the chronic care challenge, rather than just adding new benefits onto an outdated payment structure, Medicare can promote healthy aging, reduce disability, and produce better value for beneficiaries and taxpayers alike.

Tragically, the current debate in Washington over Medicare is about money, not health -- about how much Medicare would spend on a drug benefit, not how well it is spent. Given the size and importance of Medicare, if the program were strategically focused on encouraging innovation for healthy aging, positive results would ripple throughout the health care system. To start the program on this path, the Progressive Policy Institute developed the "ABC's" of modernizing Medicare:

1. Accountability: Convert Medicare from a reactive regulator into a proactive manager that is accountable in every community for improving health care quality;
2. Benefits: Employ crucial new benefits for prescription drugs and chronic care management as the first opportunities to transform Medicare into a results-oriented care system;
3. Choice: Enable beneficiaries to make choices of health plans and care management plans that are best suited for their health conditions and personal preferences.

These changes promise not only better chronic care for older Americans, but also better health care for everyone. Patients yearn for a health care system that treats them as active adults participating in their own care, not passive recipients. They want and deserve a system that serves them, not the institutions that deliver and pay for care; one that continuously seeks improvement based on the patients' experience and ongoing scientific research.

This report explains the challenge of chronic illness, its implications for Medicare, and the kind of change that is needed. For PPI's legislative proposal based on this new approach, see An "ABC" Proposal to Modernize Medicare, by Jeff Lemieux, David B. Kendall, Kerry Tremain, and Dr. S. Robert Levine.

Blueprint Keywords: Extra Chronic Care

David B. Kendall is senior fellow for health policy at the Progressive Policy Institute. Jeff Lemieux is senior economist at PPI. Dr. S. Robert Levine is chairman of PPI's Health Priorities Project. Kerry Tremain, who lives in Berkeley, Calif., is a writer and former editor of BLUEPRINT.