Medicare in the 21st Century: Building a Better Chronic Care System

Abstract

This report is about how Medicare could improve care for beneficiaries with chronic conditions. During the mid-1960s, acute care - not chronic care - was the major focus of medicine. When Medicare was instituted in 1965, it was modeled after the health insurance system of that time. Medicare was to function primarily as a claims payer; its benefit package and reimbursement systems were not designed for chronic conditions; preventive services were excluded; and reimbursement was paid only for in-person visits and procedures to individual providers. Since then, good chronic care and comprehensive coverage have become crucial to Medicare beneficiaries. Though some improvements have been made to Medicare, major changes in the provision and financing of chronic care for Medicare beneficiaries are needed. Medicare has the potential to refocus its Medicare program - as well as the nation's health care system - and should take a leading role in improving chronic care. This report is the final product of the Medicare and Chronic Care in the 21st Century study panel, a panel convened by the National Academy of Social Insurance as part of its Making Medicare Restructuring Work project. The panel was charged with determining the health care and related needs of Medicare beneficiaries with chronic conditions, how well Medicare meets their needs, features of the current Medicare program that support or impede good chronic care, and the experience of other chronic care models. The study panel focused on original Medicare, Medicare's traditional fee-for-service program. It chose this focus because 35 million of Medicare's 40 million beneficiaries are covered under this system. The study panel also recommended changes to the Medicare+Choice (M+C) system, as changes to M+C may be easier to facilitate.