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Dueling Dinosaur Images at Medicare Hearing

February 10, 1995

WASHINGTON (AP) _ Invoking images from ``Jurassic Park,″ the chairman of a congressional health panel called Medicare ``a dinosaur″ Friday and urged major changes. But Medicare’s chief retorted that the lesson of ``Jurassic Park″ was to beware ``experimenting in areas where you really don’t know what you’re doing.″

The exchange came at a House Ways and Means health subcommittee hearing on Medicare reform and innovation where Rep. Bill Thomas, R-Calif., complained that Medicare lags behind the private sector in moving to managed care to hold down costs.

Health Care Financing Administration head Bruce C. Vladeck angered some Republicans with criticisms of an experimental program called Medicare Select that now operates in 15 states. It allows 400,000 elderly to buy low cost, managed-care insurance to supplement their regular Medicare coverage.

The Republicans and state officials are pushing to expand Medicare Select to all 50 states. But Vladeck said Medicare doesn’t share in the savings from the experiment and he suggested Congress should just give the limited program another six-month extension.

Rep. Nancy Johnson, R-Conn., a strong advocate of opening Medicare up to competition from private, managed-care plans, told Vladeck she was ``stunned by your testimony and disappointed.″

``This is 1995. Health care costs are being contained in managed care and consumers are liking it.″ she said. ``If you’re going to be part of this dialogue, by gum, buckle down, get your staff focused and let’s do it.″

Rep. Jim McDermott, D-Wash., a strong supporter of government-financed health insurance for all, said the Republicans were using Medicare Select as ``the opening wedge to privatize″ Medicare. Insurance companies will skim off the healthy old people and leave the government with the oldest and sickest seniors, he warned.

``That’s a real concern,″ agreed Vladeck, who said the Clinton administration does want to give seniors a ``preferred provider option″ under Medicare that would allow them to save if they went to certain physicians.

Medicare spends only 2 cents of every dollar on overhead, compared with a nickel for private large group coverage and a quarter in the small group market, Vladeck said.

But Thomas said Medicare has held down its expenses by shifting costs to the private sector. Medicare pays far less than private insurance for the same services.

``I don’t want you to be the John Hammond of the Medicare world,″ said Thomas, referring to the fictional tycoon who recreates dinosaurs in ``Jurassic Park.″

Don’t ``take this dinosaur program and go slow, be timid,″ he told Vladeck. ``The dinosaur of the health care system today is Medicare.″

But Vladeck replied that as he remembered the book and movie, ``part of the danger is experimenting in areas where you really don’t know what you’re doing.″

``We need to learn a great deal″ before moving Medicare aggressively into managed care, he said.

Two former HCFA heads who are now insurance industry executives followed Vladeck to the witness table to encourage moves to open Medicare up to managed care and more competition.

Leonard D. Schaeffer, chairman of Blue Cross of Southern California, said that Medicare should tie its payment levels to private insurance premiums in local markets, and that the elderly should pay more if they wanted a high-priced plan.

Dr. William L. Roper, senior vice president of the Prudential Health Care System, said the elderly ``should be given a voucher ... to choose among the full spectrum of health plan options that many private sector employees now enjoy.″

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