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Don't touch my Medicare

By Amitai Etzioni, Special to CNN
  • Amitai Etzioni says we can greatly cut the cost of Medicare without cutting benefits
  • U.S. could save billions yearly by standardizing forms used by insurance agencies, he says
  • He says direct-to-consumer ads lead to $2.6 billion in added spending on prescription drugs
  • Cutting out fraud and abuse could save huge sums, Etzioni says

Editor's note: Amitai Etzioni is a sociologist and professor of international relations at George Washington University and the author of several books, including "Security First" and "New Common Ground." He was a senior adviser to the Carter administration and has taught at Columbia and Harvard universities and the University of California, Berkeley.

Washington (CNN) -- In a post-midterm elections interview, President Obama said "we're gonna have to ... tackle some big issues like entitlements that, you know, when you listen to the Tea Party or you listen to Republican candidates they promise we're not gonna touch."

Sen. Michael Bennet, D-Colorado, points out that there is no way to reduce the deficit significantly without such a move, given that entitlements amount to 65 percent of the federal budget. In 2010, total Medicare spending was estimated to be about $500 billion. And it is this program that is said to be likely to go bust -- before Social Security -- perhaps as early as 2029.

Hence, the just-issued draft report of the National Commission on Fiscal Responsibility and Reform calls for putting a cap on what the nation can spend on Medicare while others call for delaying the age at which one can qualify for care.

As I see it, reducing the deficit by cutting Medicare services and coverage is highly immoral. The main reason is that one can greatly reduce the cost of Medicare without cutting benefits. Let me start with an almost trivial but easy-to-see illustration before moving on to talk about real money.

Studies show that if we standardized the forms used by various insurance companies instead of continuing to rely on the myriad forms that are currently used, we could save $7 billion in overall health costs every year. (In all the calculations that follow, note that Medicare reimburses health care expenses. Hence if these are lower, so are Medicare outlays).

Reducing the deficit by cutting Medicare services and coverage is highly immoral... one can greatly reduce the cost of Medicare without cutting benefits.
--Amitai Etzioni
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Now, I know that this is chump change when we're trying to find savings for a program that costs half a trillion dollars, but it illustrates that there are easy ways to cover costs without denying any benefits. It is immoral to take treatment away from anyone before cutting down on paperwork.

Most civilized countries -- including, until recently, the U.S. -- do not allow pharmaceutical companies to advertise prescription drugs on TV, because it has been established that these ads pack an emotional, and not an educational, appeal.

They lead people to pressure their physicians to prescribe medications that are frequently useless, risky or both. And they lead people to purchase drugs for made-up illnesses promoted on the tube, such as restless leg syndrome.

One study found that direct-to-consumer advertising led to an additional $2.6 billion in spending on prescription drugs in one year. Thus, Medicare could save some money if we simply restored the ban on prescription ads on TV. We are morally bound to reinstate this ban on such ads before we deny anyone a bone marrow transplant.

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Want to talk big bucks? The United States is spending about twice as much on administrative costs for health care as many other countries. Canada is one example. Estimates differ, but one reliable source holds that our costs amount to $30 out of every $100 health care dollars compared to $17 of theirs.

I realize that there are many reasons we cannot match Canada's parsimonious ways, but if we cut only part of the difference in administrative overhead, we would save tens of billions each year. I say it is immoral not to cut administrative costs before we cut out anyone's kidney dialysis.

When people argue that savings can be found by cracking down on fraud and abuse, some experts snicker. Granted, we cannot eliminate all fraud and abuse, but we are duty-bound to do more to plug the leaky Medicare bucket before we deny seniors the right to dip into it when they are ill.

The CBS news show "60 Minutes" recently demonstrated that the Medicare fraud industry in South Florida is now larger than the cocaine industry, because bilking Medicare is much easier and the risk of being caught and punished is much smaller. Crooks buy patient lists and bill the government for expensive items ranging from scooters to prostheses, all to the tune of some $60 billion a year.

Because Medicare is required by law to pay all bills within 15 to 30 days and has a small accounting staff, it often cannot vet claims before the checks go out. By the time Medicare authorities do find out a storefront's bills are phonies, the crooks close it and open one next door under a different name. I say do not cut anyone's benefits until the government triples its accounting staff and quadruples the number of such crooks in jail.

I am just warming up.

According to some estimates, as much as $325 billion is burned up every year in unnecessary treatments in the health care system. Cut out only one-third, and you get whole a pocketful of bucks. And if you additionally get a handle on the thousands of fatalities each year because of medical errors, you will be well on your way to turning the Medicare deficit into a surplus, as far as the eye can see.

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I am not arguing that we can avoid adjusting our benefits. However, it is morally wrong to deny a single penny of Medicare benefits to those who are ill and infirm before we collect the billions currently siphoned off by crooks, wasted by bureaucrats and squandered on useless medical interventions which can make people sicker -- or even kill them.

The opinions in this commentary are solely those of Amitai Etzioni.