Today, we welcome a guest post from Dr. Muriel R. Gillick, author of Old and Sick in America:  The Journey through the Health Care System, on the founding of the national health insurance program we call Medicare.

Since the introduction of Medicare and Medicaid in 1965, the American health care system has steadily grown in size and complexity. Old and Sick in America takes readers on a narrative tour of American health care, incorporating the stories of older patients as they travel from the doctor’s office to the hospital to the skilled nursing facility, and examining the influence of forces as diverse as pharmaceutical corporations, device manufacturers, and health insurance companies on their experience.

Old and Sick in America is now available in both print and e-book editions.

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Happy Birthday, Medicare

Fifty years ago this summer, Medicare celebrated its first birthday. After 30 years of unsuccessful attempts to introduce national health insurance, Congress finally took what was supposed to be its first step in the direction of comprehensive coverage, creating the Medicare program for older Americans. The consequences were profound: Medicare has influenced how older people die—where they die, and what they die of—and it has affected how older people live—longer and with less disability. Every site where older people receive medical treatment has been shaped by Medicare, from the office to the hospital to the skilled nursing facility.

Medicare did not achieve all this at once, although already after one year of existence, older people were flocking to the hospital as never before. They were finally tending to those nagging symptoms they had previously neglected or the elective surgery they had put off because they couldn’t afford to go to the hospital. Over time, Medicare evolved to adapt to new realities and to meet new challenges. Medicare hospice, for example, was non-existent in the early days of the program; the benefit was first introduced through federal legislation in 1983.  In its first year of existence, only 200 older people enrolled in hospice, accounting for less than half of one percent of all deaths. By 1986, 7 percent of Medicare patients who died had been enrolled in hospice; by 1998, that percentage had jumped to 19 percent, and in 2013 it soared to 47 percent.

Home care started to become a reality for older Americans after Medicare was expanded in 1972 to cover physical therapy and occupational therapy; it became even more of a reality when federal legislation permitted home services without a prior hospitalization and allowed for-profit agencies to provide the services. The availability of medical care at home—though with the conspicuous absence of physician care—became crucially important after the introduction of prospective payment for hospital care in 1983, which in turn led to dramatically shortened hospital stays. As older individuals were discharged “quicker and sicker,” they desperately needed help, and they quickly learned they could get it through home nursing, home physical therapy, and home health aides—paid for by Medicare.

For those older people who were just too debilitated to go home after a hospitalization, even with home care services, another alternative was rehab. This kind of inpatient care, typically provided in a skilled nursing facility (SNF), was virtually unheard of in 1967. It was covered by the initial Medicare legislation, but only took off after prospective payment shortened hospital stays. Today, one in five older patients goes from the hospital to the SNF.

Changes to the Medicare program continue unabated to this day, modifications that have profound ramifications for all older Americans.  The “value-based care” required by the Affordable Care Act is now embedded in the way that Medicare pays for joint replacement surgery: instead of paying the orthopedist, the hospital, and the skilled nursing facility separately for their work, Medicare instead pays the providers a single “bundled” fee that they must apportion among themselves. This means that no longer will the orthopedist be able to wash his hands (it’s usually a he) of what goes on the rehab setting, nor will the hospital regard discharged patients as out of sight, out of mind. In the drama in which the protagonist is the patient with a painful knee and trouble walking and the action revolves around an operation, all the players have to cooperate to make the outcome successful. Thanks to the Medicare Readmissions Reduction Program, hospitals can no longer discharge patients with impunity, before their problems have been adequately attended to and without a robust follow-up plan in place.

In a time when the integrity of the Medicare program is under threat—make no mistake, today it is Medicaid that is on the chopping block, tomorrow it will be Medicare—it behooves us to celebrate the program’s successes. We also need to look closely at how the health care system works, how all the pieces hang together, and the unique opportunity that Medicare presents in the form of a lever with which to manipulate this complex system.

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Muriel R. Gillick, M.D., is a member of the Division of Aging at the Brigham and Women’s Hospital and professor of population medicine at Harvard Medical School.  For more, visit her website.