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CAPITOL PERSPECTIVES Federal Debt Held by the Public Source: CBO, Updated Budget Projections: Fiscal Years 2013 to 2023 (May 2013) What is sustainable about the two-pillar entitlement programs for the elderly being underfunded by 50%, to say nothing of his entirely new health program or Medicaid? WHAT SHOULD BE DONE? First, we as a country must recognize that although there has been marginal improvement in the fiscal situation, the fundamental problems remain. Second, we must acknowledge today's seniors and future seniors are entitled to and will receive far more in benefits than they ever paid into the system. Third, seniors need to have more skin in the game and become actively engaged in making decisions that will save resources for both the system and themselves. For Medicare, this means we must move to a more competitive system and away from the command and control of price-by-government fiat. This has been done already to great success in Medicare Part D, where seniors get to choose the prescription drug plan that best fits their needs and share in the savings when they make economical choices through lower premiums. But the entire system should move in this direction. If seniors want to remain in the present government-run system, then they should pay the differ- ence between that system and competing health plans that can offer the same benefits for less. In addition, the current Medicare fee-for-service program's cost-sharing requirements should be modernized to better align beneficiary choices with costs. For example, healthcare reform made preventive benefits entirely free to beneficiaries, thereby masking massive price differentials for the identical service provided in different sites of care. A Medicare beneficiary does not know that a diagnostic colonoscopy is twice as expensive in a hospital as it is in an ambulatory surgery center. Similarly, millions of Medicare beneficiaries have Medigap plans which provide supplemental first-dollar coverage, making almost all benefits appear free to the beneficiary. CBO has estimated that simply prohibiting first-dollar coverage of Medigap would save over $50 billion. But all of these ideas are moot if the President and Congress fall into a false sense of complacency that the fiscal situation is fundamentally sound and no action is necessary. Skeptics will say that divided government produces paralysis. I say that divided government actually is essential for changes of this magnitude because it requires both parties to offer their ideas and take ownership of the solutions. John McManus is president and founder of The McManus Group, a consulting firm specializing in strategic policy and political counsel and advocacy for healthcare clients with issues before Congress and the administration. Prior to founding his firm, McManus served Chairman Bill Thomas as the staff director of the Ways and Means Health Subcommittee, where he led the policy development, negotiations, and drafting of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Before working for Chairman Thomas, McManus worked for Eli Lilly & Company as a senior associate and for the Maryland House of Delegates as a research analyst. He earned his Master of Public Policy from Duke University and Bachelor of Arts from Washington and Lee University. He can be reached at jmcmanus@mcmanusgrp.com. 12 LifeScienceLeader.com July 2013