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Will President Obama Save Medicare?

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Here we go again. Another battle over health care is brewing. President Obama's latest plan is to slash Medicare by $248 billion in the next 10 years as a down payment on tackling entitlements and curbing the crippling federal debt.

Most of the savings will come from payments to drug companies, hospitals, doctors, and insurance companies. Beginning in 2017, Obama's plan will raise Medicare premiums for people with higher incomes. Middle-income Americans will eventually pay more, too.

Obama has two choices. He can fix Medicare without causing hardship to older Americans, or he can make them pay more. Here's the fix.

High-priced consultants advise hospitals and doctors to do more lucrative tests and surgeries to fatten their bottom line. The mantra is volume, volume, volume. When medical care is provided just to make a buck, it will never be really good. So Medicare needs to stop paying for unnecessary and inappropriate treatment -- now.

Back surgery is overused and people on Medicare are a prime target. Medicare pays more than $80,000 for a type of back surgery that causes more harm than good for people who should never have the operation. It's hard to think of a worse public policy.

CT scans are a great diagnostic tool but they are wildly overused. The harm is real. National Cancer Institute researchers estimate that 14,500 people died in 2007 from cancer-causing radiation from CT scans.

Where can Obama begin to curb overuse? He can follow the advice of a group of physicians working to sever financial ties between doctors and the drug and device industries. The National Physicians Alliance launched the Good Stewardship Project that identified the "Top Five" things that doctors should stop doing. Prescribing antibiotics for the treatment of colds is one example. Other physician organizations are developing their own "Top Five" lists. Stay tuned.

In the meantime, to protect yourself, learn more about the most common tests and procedures that are overused.

A second Medicare fix is ramping up the attack on fraud and abuse. The FBI says that up to 10 percent of health care spending is lost to fraud.

For Medicare, this means that $50 billion is looted every year. Over ten years the amount of leakage is staggering: half a trillion dollars, almost double the $248 billion Obama wants to cut from Medicare. Health care reform gave federal officials new authority and $350 million over ten years to clamp down on fraudsters but the amount is paltry compared to the staggering loss.

President Obama can save Medicare without putting the burden on older Americans. And yes, it is possible to have great health care in America if Medicare is a good steward of the money the public has entrusted to it.

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