AT THE REPUBLICAN CONVENTION, Bob Dole pledged to cut income taxes by 15 percent, balance the budget, and leave Social Security and Medicare untouched. Tough-minded reporters believed none of it and shared their skepticism with a national television audience. Two weeks later, the Democrats met in convention and, to put it simply, lied through their teeth about their plans for Medicare. They accused Republicans, in Al Gore's words, of wanting to "give health-insurance rip-off artists a license to change Medicare, to let this program for our seniors wither on the vine. That's why they want to replace Bill Clinton. But we won't let them."
Those remarks are blatantly untrue, both about the Republican plans and about Clinton's own. And the media said . . . nothing.
What Democrats mean by the word "cut," as we all have learned by now, is not what ordinary budgetmakers mean. When they accuse Republicans of "cutting" Medicare, they don't mean that the program's costs will actually fall, or even that they will fall after you discount for inflation. What they mean by a "cut" is any change that will deny its constantly expanding number of beneficiaries the same generous level of service that beneficiaries have enjoyed in the past.
But by that definition, Medicare is heading for huge cuts no matter who is elected in 1996. Since discussions about Medicare rapidly degenerate into hideous explosions of statistical megatonnage, I'll keep it simple. Back in 1970, the 20 million Americans over age 65 cost the country $ 6 billion dollars for Medicare. In 1980, the 25 million Americans over 65 cost the country $ 32 billion. In 1990, there were 31 million Americans older than 65, and they cost $ 98 billion.
Anybody see a pattern here?
People who worry about Medicare like to contemplate with a kind of sick horror the fate of the program after 2008, when the baby boomers begin to turn 62. But let's not race that far ahead. Let's look a mere four years into the future, to the year 2000 and the last year of a reelected Clinton's mandate.
President Clinton's last pre-election budget promises to hold the growth in Medicare to a bargain-basement $ 248 billion by the last fiscal year of his second term. In order to do that, the president is proposing to rely more on managed care, to encourage more intense competition among private providers, and to impose even greater top-down price controls on doctors and hospitals treating Medicare patients.
These are not all bad ideas. But for Medicare patients, many of the consequences of these ideas will feel very much like a "cut": Medicare patients, like the rest of us, very understandably prefer fee-for- service medicine to managed care. Managed-care operators may be able to demonstrate that their customers are just as healthy and live just as long as people who enjoy traditional medical practice; but it's also true that managed-care medicine is less convenient, reassuring, and courteous (no small thing when you're sitting on a table naked except for a smock) than the sort of medicine that Medicare patients are used to.
Transferring Medicare patients to managed care may only "cut" the amenities of medicine. Some of the Clinton administration's other plans go further and will "cut" the actual quality of medicine. For reasons we could debate, the Medicare price controls that the federal government has been imposing since 1983 have not touched off the innovative search for efficiency that they were supposed to. Instead, doctors and hospitals have coped with the artificial ceiling on their fees either by fiddling with their bills, by cheapening the medicine they offer (by, for instance, substituting generic pacemakers for the latest and safest models), and in some cases by simply ceasing to treat Medicare patients at all.
The Clinton administration describes these "cuts" as byproducts of its zeal to strengthen Medicare. It must do so; otherwise it would have to admit that it, too, is "cutting" Medicare.
Without these "cuts" -- if Medicare costs were allowed to rise as fast over the next five years as they have over the past five -- the cost of Medicare in Bill Clinton's last year in office would be, not $ 248 billion, but $ 302 billion. And if you want to avoid " cutting" other federal health programs, as the president does, you'd better be ready to spend a total of some $ 100 billion more on health services by 2001 than the president says he plans to.
By now, we're entering a hyper- inflationary stratosphere, in which numbers can lose all meaning. What's $ 100 billion? Just digits on a page. And the blurrier those digits are, the better they serve President Clinton's interests. And yet they have real impact on the pocketbooks of American taxpayers.
One hundred billion dollars is an extra $ 500 out of the wallet of every adult American worker in the last year of a Clinton second term. That's on top of the $ 8,800 per adult that Clinton is already planning to take in 2001 -- and the $ 7,100 per adult he took in 1996.
Bob Dole will cut Medicare and Bill Clinton will cut Medicare for the very simple reason that Medicare in its present form cannot be sustained, not even to the end of a second Clinton administration, much less into the baby boomers' retirement years. We all suspect it; a few minutes with government documents proves it. The truth is there to be had by anyone who wants it. Evidently, the networks and the print press don't.
by David Frum