Amidst all of the bleak projections of late regarding Medicare’s future, we finally have a glimmer of hope shining through a report from the Medicare trustees: the Medicare Trust Fund is good through 2024; and surprisingly enough, it is not due to intervention from Washington, but rather, it is due to better efficiency in the overall health-care system itself. Better efficiency in the health-care system means not only better in-office care for patients, but also less hospital stays; and, 12 more years of survival gives us time to make the system even better. Read below to find out more.
Trust Fund is good through 2024 and then Medicare is Over
The Medicare trustees’ report had the potential to be ugly. The economic downturn has cut into the payroll tax revenue that finances hospital insurance. At the same time, Medicare was absorbing more enrollees as baby boomers aged into the program.
Yet despite those deteriorating conditions, the Medicare trustees stuck with the fiscal predictions they made last year: The Medicare trust fund will be able to cover its bills through 2024. That stability doesn’t owe itself to Washington or any policy that Congress passed. Instead, once you dig into the numbers, the most plausible explanation is a pretty encouraging one: Our health-care system is getting better at delivering the same medicine more efficiently.
One key indicator on that front is the federal government’s spending on Medicare hospital visits last year, which was 2.3 percent less than expected, according to figures provided by senior administration officials. Seniors made fewer trips to the hospital and, when they did, the necessary treatment was less intense than years past.
That’s a departure from the normal trend. In recent years, the average “case mix,” a metric Medicare uses to measure the intensity of care required by a hospital visit, was ticking upward by 1 percent annually. Last year, that figure was flat.
Even though we know now that the Medicare Trust Fund is good through 2024, we still need to keep in mind that more changes will need to be made to ensure the System stays on track in the future. Hopefully, we can make the best of the next 12 years and continue the progress.