Bold Move on Medicare Eligibility Maybe Deserved Another on Executive Pay

Friday, September 30, 2011

The Chicago-based American Hospital Association (AHA) never asked for my advice before advocating that Americans should have to wait an extra two years before becoming eligible for Medicare.

I know, the AHA is a big organization with lots of issues on its plate, lots of constituencies to massage. They don't have time to consult even a handful of the former hospital public relations executives floating around this country, of which I happen to be one. I must face facts: health-care-legends-in-their-own-minds like me are a dime a dozen.

But if the folks in the hospital association had for some strange reason contacted me before loosing this proposal on the public yesterday, I would have had the perspicacity to advise extreme caution when packaging this.

I also would have advised them to have something compelling to offer against the predictable reaction that hospital executives were trying to preserve their own bottom lines at the expense of their elderly patients, a line of attack that cropped up in the first paragraph of an article in today's Boston Globe:

"As the deficit reduction supercommittee hunts for $1.5 trillion in additional savings, U.S. hospital executives are so worried about having their payments cut that they plan to start lobbying Congress next week to shift the burden onto their elderly patients -- specifically by raising the age of eligibility for Medicare."

Lynn Nicholas, president of the Massachusetts Hospital Association, was quoted as saying, "We have to look at health care entitlements and not just payments. It's pretty much a no brainer to raise the age of eligibility for future enrollees."

The AHA is not wrong on the big picture. Our country is broke and living on credit; something has to give if we are going to have a country in 10 or 20 years that resembles America as we know it. Pegging Medicare eligibility at 67 would save the federal government nearly $125 billion over a 10-year period -- serious dough, in other words.

We hear every day that it will require "shared sacrifice" by all citizens and all sectors of our economy to get through this crisis, a cry that has become a cliche; but, like all cliches, it is true as death.

Many of America's hospitals are hurting financially, and many have had to make considerable sacrifices to get through these difficult times. "Providers have been giving and giving and giving, and will give more," Ms. Nicholas emphasized to the Globe.

I do not doubt the sincerity behind that position. Nevertheless, it is a position with some weaknesses. Hospital executives could strengthen it substantially with a bold gesture or two.

The upper crust of hospital management in the U.S. is very well compensated. Even though most hospitals are non-profits, and even though the President of the United States makes $400,000 per year as the head of the largest non-profit organization in the world, (the U.S. government), most hospital CEOs make more than that. And some make a great deal more -- in the neighborhood of $1 million or $2 million more!

If the AHA had somehow persuaded its members to support a $15,000 reduction in the pay of every non-profit hospital executive making between $250,000 and $500,000, a $25,000 reduction in the pay of every executive making between $500,000 and $750,000, and so on, and if the AHA had tied those reductions to a two-year increase in the Medicare eligibility age, the hospitals would be in a stronger position today. Whenever they talked subsequently about shared sacrifice, they would have greater authority.

And it would be easier for them to deflect missiles from antagonists like Rob Restuccia, who headed Health Care for All in Massachusetts for many years and is now the director of Community Catalyst, an organization pushing for universal health care across the nation.

Today in the Globe, Restuccia pronounced the AHA's idea on Medicare eligibility a "public relations disaster," adding, "These are mostly nonprofit institutions. They're supposed to be focused on caring for their community. This would not help their community, though it may help their bottom line."


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