Rochester's growth owes a lot to Medicare

By Mark Liebow, M.D.
Rochester (Minn.) Post-Bulletin, Aug. 2, 2013

Medicare, a program that has transformed health care and Rochester, celebrates its 48th birthday this week.

Before 1965, the federal government provided care for active-duty servicepeople and their dependents, some veterans, some native Americans and merchant sailors. As an employer, it provided health insurance for federal employees and their dependents.

However, it did nothing to help most people in the country pay for health care.

The revolution of the 1940s and 1950s in health insurance coverage meant most employees of larger companies and their dependents had health insurance, but, with some exceptions, coverage stopped at retirement. Most seniors, at an age when they usually needed health care more than ever, no longer had health insurance.

There was a limited private market for health insurance for seniors, but even those who qualified often found the cost unaffordable. Seniors without coverage paid for care out of savings, got help from their children, depended on charity care — or went without care. Going without care was dismayingly common.

Medicare changed all that. It had been a Democratic dream for a generation, and it finally passed in 1965 after the Johnson landslide in 1964 gave Democrats overwhelming control of Congress.

Starting Jan. 1, 1966, Medicare covered hospital care, physician care and tests for seniors. Seniors could go to doctors and hospitals without risking bankruptcy or asking other people for financial help.

This meant medical advances often needed for seniors, such as heart bypass surgery, joint replacement and cataract surgery, became available in hospitals across the country. It made hospitals far less dependent on fundraising to pay for day-to-day operations and so less vulnerable to failure. It helped raise incomes for most health professionals.

Since Medicare started, the United States has become one of the countries with the highest life expectancy for those who reach age 65. The program was the first time the federal government paid directly for care provided by private doctors and hospitals. It worked out very well. Administrative costs for the government, as well as for doctors and hospitals, were lower than for private insurance programs. It proved a large, single-payer insurance program could work in the United States, at least for part of the population.

Medicare changed Rochester, too. Since Medicare began, Mayo Clinic has grown almost tenfold, and Rochester's population has more than doubled. The Rochester we have today would be unimaginable without Medicare. The flow of money into clinics and hospitals, and then out to their employees, has helped make Olmsted County the wealthiest county in Minnesota outside of the Twin Cities metropolitan area.

Thousands of people make their livings from having Medicare patients come to our area for care. Even the training of young physicians in Rochester has been boosted by Medicare, which has always paid for graduate medical education and now is the primary payer for that.

Medicare has taken on new responsibilities over the years. It now covers people with end-stage renal disease and many people with long-term disabilities, even if younger than 65, since few of these people can get private insurance. It also provides greater coverage for seniors than it did in 1965. Neither preventive services (most of which didn't exist in 1965) nor most drugs were covered in 1965, but drug coverage was added in the last few years, and preventive service coverage has been added bit by bit over the years.

Like most 48-year-olds, Medicare has more aches and pains than it did in its youth. The aging of the baby boom generation will put increasing pressure on the Medicare Trust Fund, which pays for hospital care for seniors, but a small change in the payroll tax that supports the Trust Fund can keep it going. For a while it looked as if the rising cost of physicians services and tests, 75 percent of which is paid for out of federal general revenues, would put severe strain on the rest of the federal budget, but the rate of cost increase has slowed considerably, and there's hope the slower rate of increase will continue into the future. We won't stop worrying about how to pay for Medicare, but this isn't as big a concern as it was a few years ago.

Medicare has been good for America and particularly good for southeast Minnesota.

Mark Liebow is a Rochester doctor and the chairman of the Senate District 26 DFL.