What the Doctor Ordered

Before Medicare took effect on July 1, there were dire predictions of imminent chaos. Every oldster with a hangnail or bellyache would demand a hospital bed, pushing admissions beyond capacity. Thousands of hospitals would fail to meet federal standards and thus be unable to serve Medicare patients. General administration of a plan covering 19.1 million persons could easily break down. In the first eight weeks of the program, Medicare has had its problems, but they have been surprisingly few and far less serious than expected.

Widespread Confusion. Last week, as teams of expert observers toured the U.S. and regional offices filed their reports, Social Security Commissioner Robert M. Ball announced that "forecasts of a rush to hospitals by people 65 and over have not materialized." Admissions have risen only about 3%, and occupancy is generally below capacity. Of the nation's 8,200 hospitals, 6,600 have been approved to participate in Medicare; the institutions already accepted contain 96% of the general hospital beds in the U.S. As for general administration, 700,000 "start of care" notices were received in the first six weeks, and the initial payments of bills to both hospitals and physicians were made by July 11. No serious breakdowns have yet been detected.

One widespread problem is considerable confusion among beneficiaries as to just what Medicare covers. Many are disappointed to learn that they must still pay the first $40 of hospital bills, for instance, and that Medicare does not provide such items as eyeglasses. Some patients over 65 are also finding their gross doctor bills going up, even while the net cost to them may fall. A New York Times survey last week indicated that physicians accustomed to charging reduced fees to care for older patients of limited means are now asking their regular rates. Under the optional Part B of Medicare, subscribed to by more than 17 million persons, 80% of doctors' bills after the first $50 are paid by the Government. Medicare is also expected to raise further the already spiraling cost of medical care--especially in hospitals--by increasing the demand for services and thus increasing the competition for medical personnel already in short supply.

Open Drain. The rise in doctors' fees and hospital costs comes as no surprise to the Government, which considered both more or less inevitable. What has been a shock, though, is the way a less prominent medical program has worked out: a system called Medicaid, which was set up by Title 19 of last year's Social Security Act. While Medicare covers persons over 65 through the social-security system, Medicaid is a federal-state-local venture to help the "medically indigent" regardless of age. States wishing to participate were to establish phased programs, with each state defining its own standards of indigence. Already, 19 states have started programs and several more are preparing them. Some are being far more liberal in their eligibility rules than anyone had predicted. The original estimate by the Department of Health, Education and Welfare of first-year federal cost has already nearly doubled to $500 million--and $700 million may be closer to the facts. As more states sign up, of course, the cost will rise well into the billions.

Astonished Congressmen are beginning to realize that they have created what amounts to an open-end drain on the federal treasury, and are now considering passing economizing amendments. But the most difficult trick in Government is to take back a benefit once it has been granted.

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