ABSTRACT
Americans believe that at least basic healthcare is a right, and Medicare is a well-established program offering equal access for nearly all elderly and disabled persons so long as they contributed during their working years and “played by the rules". Two challenging constraints place bounds on what can be achieved from Medicare in the foreseeable future. First, financing problems arising from both a history of high rates of healthcare spending growth and the long-run aging of the population put serious limits on future options for the Medicare program. Second, the demise of broader healthcare reform makes some desirable changes in Medicare more difficult to make. Although Medicare has already relied heavily on reducing payments to providers of services and on payment reforms that alter the incentives for provision of care, more can and should be done in certain provider payment areas. Cost containment efforts must include better monitoring of service use and better ways of reducing unnecessary care.
