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Letters: How to rein in Medicare costs

December 13, 2012

Re "The beloved budget buster," Editorial, Dec. 9

Your editorial on Medicare correctly identified novel procedures as one of the drivers of rising medical costs. It prescribed better comparisons of the cost-effectiveness of treatments as an essential part of the cure.

The Tufts Cost Effectiveness Analysis Registry, the premier compiler of cost-effectiveness research, gives a further reason for optimism. Its data reveal that one-fifth of novel treatments result in better health and lower costs. Of course, four of five increased costs. But the point is that we could flatten medical costs if we went from one-fifth to one-half cost savers.

A research system like ours that pays no attention to costs is inherently biased toward cost increases. We need to redirect the National Institutes of Health to a new goal: investing its $31 billion annual budget to balance the development of cost drivers with cost savers.

Wally Knox

Los Angeles

Aside from partial measures like allowing Medicare to negotiate with drug companies for lower prices, the best way to assure Medicare's fiscal stability is to improve and expand the program to cover all Americans. The resulting single-payer system would slash wasteful paperwork and bureaucracy, yielding savings of up to $400 billion annually. Furthermore, young and old alike would have a clearer stake in sustaining a single, equitable system.

With the amount our nation spends each year on healthcare, we can afford to provide universal coverage. However, we choose not to. Instead, we waste money on private health insurance companies. While Medicare allocates just a few percentage points of its revenue to overhead, private companies spend about 15% on overhead and profits.

We should expand Medicare, the nation's most efficient health insurance system, rather than cutting it.

Carl Berdahl, MD

Los Angeles


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