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have you heard about the problems with medicare?
no
it has to be reformed
if it is not reformed medicare expenditures could eventually triple as a percent of GDP
the actuaries at the centers for medicare and medicaid services
actuaries
they're experts in mathematics and financial projections
are the actuaries at the centers for medicare and medicaid services good at what they do?
yes
they are some of the best actuaries in the world
why do they believe that medicare expenditures will eventually trip was a percent of GDP?
because medicare expenditures are growing much faster than the economy
that is not good
no it is not
why are they growing so fast?
good question
there are three primary reasons
too many unnecessary medical tests and procedures are being performed
why would anyone taken them necessary test or have an unnecessary procedure performed?
aren't they time-consuming and occasionally painful?
they are
so why do people take them?
because their doctor tells them to
almost everyone listens to their doctor
yes
they do
so why do doctors tell them to have a necessary tests and procedures performed?
they don't do it consciously
humans reactor incentives
doctors are paid primarily based upon the number of procedures tehy perform
the more procedures performed the more they are paid
seems like the incentive should be changed
the focus should be on the quality of care provider not the quantity
additionally some doctors order unnecessary tests and procedures because they're afraid
of being sued
they're practicing defensive medicine
what is another reason medicare expenditures are growing so fast?
there's a substantial amount of fraud in the system
like what?
improper payments for durable medical equipment and home health care
the GAO estimated that improper payments kostas is still about thirty eight billion
dollars in 2010
what is the third primary reason medicare expenditures are growing so fast?
mismanagement of medical and technological advances
huh
what do you mean?
well thanks to medical and technological advances we can extend a person's life longer than
we ever before
i'm confused
isn't that a good thing
yes it is but it can be very expensive
we our rich nation
we can afford it can't we?
not really
as a nation we owe over fourteen trillion dollars
we must learn to make difficult choices
what do you mean?
well we have finite resources and owe others a lot of money which must eventually
be repaid
if we continue to spend more than we produce we risk impairing the financial future of our
children and grandchildren
so choices must be made
do you think we should perform a hip replacement surgery on a ninety eight year old man with
alzheimer's disease?
no that doesn't seem to be a reasonable allocation of our limited resources
I agree and believe most people would
once you have made that decision you have crossed a line
you have acknowledged that we need to make choices when or where not to do certain procedures
it is just a question of where those lines should be drawn
who should make those
decisions
good question
it shouldn't be the politicians
it needs to be a multidisciplinary team of professionals including doctors ethicists patient
rights advocates actuaries and economists sounds reasonable
hard choices can be emotional
it is best to have a team of experts with no conflicts of interest make them
if we eliminate unnecessary tests and procedures and better manage future medical and technological
advances do you think we can control the growth of medicare spending without discouraging
future investment
i believe we can
this video was written by brad smith
brad is chairman of Milliman an international actuarial and consulting firm
he serves as a presidential officer of the Society of Actuaries
the opinions expressed in this video are brad's alone and do not necessarily reflect those
of these organizations