Restructuring the Medicare Program

The Medicare program pays for healthcare provided to nearly 40 million older and disabled Americans. Established in 1965, Medicare has become a popular government program, and an expensive one, consuming nearly 12% of each year’s federal government budget. In recent years, Congress has had to pass special legislation twice to keep the program solvent. When large numbers of baby boomers begin to retire and become Medicare beneficiaries around the year 2010, the program will be severely stressed financially and will have difficulty providing healthcare to many people who, compared to previous generations, will be living well into their 90s and 100s.

Recognizing these impending problems, Congress and the Clinton administration enacted a large number of changes in the Medicare program when it passed the Balanced Budget Act of 1997 (BBA) – which, among many other things, mandates the development of Medicare prospective payment systems for non-hospital providers, and direct payment for clinical nurse specialists and nurse practitioners regardless of practice setting. The changes in the BBA are expected to patch the Medicare program’s financial problems through the year 2006 and possibly a few years beyond. The BBA also created a special commission to examine the structure and financing of Medicare. But what does this have to do with the future of nursing?

As health policy experts think about the changes necessary to protect and strengthen Medicare in the future, many doubt that the program will be able to sustain its traditional reliance on acute care hospitals as the major site of care, or afford its reliance on physicians as Medicare’s chief decision-makers. Both approaches have been enormously costly. Rather, the Medicare program is expected to shift more care delivery out of the hospital and into the home and community, cover more preventative and health promotion services, and use a greater array of health professionals rather than relying solely on physicians. The shift in the delivery of care, the need to treat more chronic conditions in an increasingly older population, and the greater use of non-physicians suggests that nurses are well-positioned to play a far more prominent role in Medicare’s future.

These anticipated changes are very much in line with the clinical strengths and philosophical and practice orientation of the nursing profession. At the same time, however, other groups will recognize that their professional interests will be affected substantially by how the Medicare program is restructured, and they will work to obtain changes favorable to them. During the next 10 years it is critically important for nursing’s policy leaders to work closely with the Medicare commission and members of Congress so that, where feasible and socially responsible, Medicare’s eventual restructuring will allow more nurses to exercise a greater role in meeting the needs of our nation’s aging society. Looking ahead, the future looks very bright for all nurses, particularly geriatric and geriatric/psychiatric nurse practitioners (NPs).

Increasing Emphasis on Quality

Beyond changes in Medicare that will unfold over the next 10 years, the healthcare environment will increasingly emphasize the quality of care. Quality will be defined more clearly, and with the aide of information systems, public watchdogs, and increasingly smart employers, the public will have much better information to judge and select organizations based on their quality, and not just the price of care.

The quality environment is being shaped by both federal and state governments enacting new consumer protection laws and by private economic forces that are placing financial pressure on organizations to compete on the basis of quality. Nurses consistently enjoy a very strong ranking in public opinion polls and, therefore, can anticipate that the public’s demand for high quality healthcare will translate into increasingly strong demands for professional nursing care.

In the future, when an organization’s management team comes to work each day, they will be less worried about cost structure and far more worried about whether its reputation for, and actual delivery of high quality, will be high enough to enable them to stay in business. In such an environment, no organization will want to be known for its problems or shortage of nurses. Nurses will increasingly be recognized as vital to the quality of healthcare in all settings, and vital to the survival of healthcare organizations.

Aging RN Workforce

Unfortunately, there is at least one storm cloud lurking over the profession’s future. The average age of RNs is rising at a rate of one third of a year each year, one of the fastest (if not the fastest) aging occupations in the country. Today, more than 50% of all working RNs are over the age of 40 years. Based on the early results of a research project currently underway, an increasing number of RNs may be retiring from the workforce during the first decade of the new century. Although it is difficult to know for sure, it is possible the contraction in the supply of RNs could result in shortages just at the time when the aging baby boom generation will need us the most.

The changes that are affecting the Medicare program, the emphasis on the quality of care, and the rapid aging of the RN workforce all present challenges, threats, and opportunities for the nursing profession. I believe that the sooner more policy-makers and nurses understand the ramifications of these trends, the sooner the nursing profession can formulate and implement strategies that will reduce the threats and capitalize on the opportunities that lie ahead.