December 2002

Grant Results

SUMMARY

In 1999, the American Economic Association conducted a symposium on Medicare reform.

The American Economic Association, based at Vanderbilt University in Nashville, Tenn., is a not-for-profit scholarly organization that promotes economic research.

Medicare spending is expected to increase substantially in the absence of reform. According to estimates from the Congressional Budget Office and the U.S. Health Care Financing Administration, Medicare spending in 1999 accounted for about 12 percent of the federal budget and could increase to as much as one-third of the federal budget by 2030.

Concern about the long-term stability and quality of Medicare, debate over the use of projected federal budget surpluses, and dissatisfaction with major Medicare reform legislation recent at the time — which proposed to reduce regulated fees for provider services — all contributed to interest in reform when this grant got funded.

The grantee organization proposed this conference during a time of legislative activity regarding Medicare reform.

The symposium grew out of the development of five papers — economic analyses of Medicare reform — that were being prepared for an issue of the Journal of Economic Perspectives, a peer-reviewed journal of the American Economic Association.

Through a symposium, the editors aimed to reach a broader audience of the public, the policy community and the press. Alan Krueger, professor of economics at Princeton University and editor of the journal, directed the project.

Key Results

  • The "Symposium on the Future of Medicare" took place on Oct. 15, 1999, at the National Press Club in Washington.

    Approximately 50 people attended the symposium, including policy analysts from both the legislative and executive branches of the federal government; academic economists; interest groups related to health, the elderly and organized labor; and journalists.

    Presentations were given by the authors of the papers, including:
    • Mark McClellan, "Medicare Reform: Fundamental Problems, Incremental Steps," described:
      • The financial problems facing Medicare.
      • The history of reform efforts.
      • More-recent reform proposals, which alternatively suggested using competing private plans to make Medicare more like the health insurance programs of large employers, or protecting and revising the traditional, government-run fee-for-service format of Medicare with added prescription coverage.
      • An economic analysis of the strengths and weaknesses of each proposal.
    • David M. Cutler, "Walking the Tightrope on Medicare Reform," examined ways of determining the value of Medicare and proposed reforms in terms of costs and benefits.
    • Victor R. Fuchs, "Medicare Reform: The Larger Picture," described the social context for Medicare in terms of the size, needs and financial resources of the elderly population in comparison with the pre-retirement population and suggests alternative approaches to medical coverage and division of financial responsibility.
    • Uwe E. Reinhardt, "Health Care for the Aging Baby Boom: Lessons From Abroad," presented an analysis of data on health spending on the aged across selected industrialized countries and within the United States.
    • Thomas R. Saving, "On Making the Transition to Prepaid Medicare," explored the concept of each generation's setting aside funds to provide for the health care it will demand later in life.

    Each speaker provided in-kind support for the symposium by forgoing the usual honorarium for such work, estimated at $2,000–$6,000 per speaker.

The grantee organization reported that the audience represented the various groups the project hoped to reach but amounted to about half the number anticipated. The lower turnout was attributed partly to an article in The Washington Post the day before the symposium, in which Medicare reform had been pronounced dead.

The project director reported two results of the symposium:

  • Academic health care economists and representatives of the health policy community exchanged ideas and perspectives.
  • The authors received comments and suggestions from participants, which they used to revise the papers for publication in the spring 2000 issue of the Journal of Economic Perspectives. (See the Bibliography for details.)

Approximately 20,000 individual and 5,000 institutional subscribers received the spring 2000 issue of the Journal of Economic Perspectives. The articles prepared for the symposium are also available to members on the American Economic Association's Web site.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $18,978.

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GRANT DETAILS & CONTACT INFORMATION

Project

Symposium on Medicare Reform

Grantee

American Economic Association, Inc. (Nashville,  TN)

  • Amount: $ 18,978
    Dates: October 1999 to March 2000
    ID#:  037886

Contact

Tim Taylor
(612) 626-7691
ttaylor@hhh.umn.edu

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Articles

"Symposium: The Future of Medicare." The Journal of Economic Perspectives, 14:2 (Spring): 21–98, 2000. (Articles are also available online to members of the American Economic Association.)

  • McClellan M, "Medicare Reform: Fundamental Problems, Incremental Steps."
  • Cutler DM, "Walking the Tightrope on Medicare Reform."
  • Fuchs VR, "Medicare Reform: The Larger Picture."
  • Reinhardt UE, "Health Care for the Aging Baby Boom: Lessons From Abroad."
  • Saving TR, "On Making the Transition to Prepaid Medicare."

Sponsored Conferences

"Symposium on Medicare Reform," October 15, 1999, Washington, D.C. Attended by approximately 50 people, including policy analysts from both the legislative and executive branches of the federal government; academic economists; interest groups related to health, the elderly, and organized labor; and journalists.

Presentations

  • Mark McClellan, Assistant Professor of Economics, Stanford University (Stanford, Calif.), "Medicare Reform: Fundamental Problems, Incremental Steps."
  • David M. Cutler, Professor of Economics, Harvard University (Cambridge, Mass.), "Walking the Tightrope on Medicare Reform."
  • Victor R. Fuchs, Henry J. Kaiser Jr. Professor Emeritus of Economics, Stanford University (Stanford, Calif.), "Medicare Reform: the Larger Picture."
  • Uwe E. Reinhardt, James Madison Professor of Political Economy, Princeton University (Princeton, N.J.), "Health Care for the Aging Baby Boom: Lessons From Abroad."
  • Thomas R. Saving, Jeff Montgomery Distinguished Professor of Economics, Texas A&M University (College Station, Texas), "On Making the Transition to Prepaid Medicare."

World Wide Web Sites

www.e-jep.org provides electronic versions of articles from the Journal of Economic Perspectives for members of the American Economic Association. Nashville, Tenn.: American Economic Association, Inc., October 2000.

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Report prepared by: Jan Hempel
Reviewed by: Antonia Sunderland
Reviewed by: Janet Heroux
Program Officer: David C. Colby