The skyrocketing per capita Medicare spending is accelerated by aging population, fraud, and healthcare cost. These progressively accumulate unfunded liabilities threatening the sustainability of Medicare programs.
The aging population is susceptible to chronic or acute illness making them to fall sick quite often making the elderly population to demand more medical services than the younger generation for example in 2002 Canada used approximately $8,208 per year per elderly persons and $1,428 per year per persons below the age of 65. As the medical costs increases with age, the cost of medical services given to the aged people increases the per capita cost of Medicare programmes hence becoming unsustainable. The unsustainable age specific health care needs have increased the medical, diagnostic and surgical expenses since services to the elderly are costly e.g. knee replacement, coronary bypass, cataract surgery and dealing with dementia. The extra health care services to the aging population are; primary care services by nurse or social worker, self management training for aged patients, transitional care, and pharmaceutical care by pharmacists, therapists to proactively rehabilitate autonomy, safety and quality life. As dying is extremely expensive, health care cost becomes expensive during final years of life since probability of dying increases with age.
Fraud accounts for unknown amount of wasteful spending throughout Medicare program and demands aggressive intervention for sustainability of Medicare. Criminals have come up with organized and sophisticated fraud schemes committing fraud in many forms. The fraudsters inflate the bills higher than the actual cost of medical services offered or miss present data to increase payment, they claim bills for goods and services which were not offered or which were not medically needed, they forge identities of providers or beneficiaries as they masquerade in homes, community centers, churches and other public places claiming to be Medicare officials. They target durable Medicare equipment by setting up sham storefronts and illegally billing for equipment threatening to terminate Medicare services unless beneficiaries disclose their Medicare number or accept the equipment.
Medicare being a desired service is faced with long term growth in per capita spending due to; price inflations, use of brand name drugs which are more expensive than generic versions which are biologically equivalent, medical advancement in science and technology targeting devices, procedures and drugs. High retail charges, administrative costs and unaffordable premium rates, insolvency of funding programs e.g. hospital insurance trust fund program.
When the projected funding programs account for more than almost half of Medicare per capita spending, the administration should sustainably reduce cost by increasing revenue e.g. increasing payroll taxes and raising beneficiary premiums or reducing spending by cutting benefits, reducing provider payments and administrative law agencies enacting regulations to sufficiently control the inefficiencies that increase cost of Medicare.
Longwoods.com.(2012).How sustainable is healthcare spending in Canada?
Retrieved from (http://www.longwoods.com/content/18839 )
Social Security Advisory Board. (2009). The Unsustainable Cost of Health care retrieved from (http://www.ssab.gov/documents/TheUnsustainableCostofHealthCare_graphics.pdf )