MacNeil error.

People watch The MacNeil/Lehrer NewsHour because it's Serious Television News. Not bound to 22 minutes of commercial-driven images like the networks, the PBS show penetrates issues with in-depth reports and debates. It needn't entertain--it educates.

At least that's the line.

In reality, the NewsHour suffers from a common television news malady: It often lets opposing parties face off and volley dubious "facts" and assertions--without being challenged by the moderators. There's no doubt that Robin MacNeil and Jim Lehrer are intelligent and charming. But because they face different and complex issues every day, they don't always have the knowledge, or the confidence, to ask the clarifying questions. And it's the viewer who pays the price.

This shortcoming is most visible when the show takes on complicated subjects, as it did on May 10 when the news of the day was Medicare reform. Senate Republicans had just announced their plan to cut $250 billion in the future growth of Medicare, and the NewsHour invited two senators to debate the issue.

First, the NewsHour's background report filled in some facts: Beneficiaries pay about $2,800 annually for their medical care, double what it cost them only seven years ago. People are living longer and taking advantage of an increasing number of expensive medical procedures. Medicare will cost the federal government $176 billion this year, and twice as much by 2002, leaving Medicare's trust fund broke.

With Medicare costs exploding--spending on the program quadrupled between 1980 and 1994--the need to reform the program is obvious. But is the Republican plan a smart one? What are its flaws? What would the Democrats do? macNeil/Lehrer's debate that evening sought answers from Senators Chris Dodd and Judd Gregg. But few answers came, as moderator Jim Lehrer allowed the senators to release a torrent of errors, inconsistencies, and half-truths.

The following annotation of the debate suggests some of the questions that could have been asked and points that could have been made for the purpose of clarification. Of course, we wouldn't expect them all to be raised in a single show, but the NewsHour certainly should have hit more than it did.

Still smarting from the Republican's obstruction of health care reform in 1994, Democrats are eager to punch back. Defending Medicare--and its constituency of over 34 million senior citizens--against the ruthless Republicans is the perfect opportunity. In that vein, Dodd asserts that the Republican plan goes way too far. Next he argues that it doesn't go far enough. Lehrer doesn't point out the inconsistency.

Dodd must be confused. There have been no Medicare cuts under the Clinton Administration.

What extended the fund's solvency was Clinton's 1993 deficit reduction bill, which expanded the 2.9 percent Medicare payroll tax to cover all earned income, and earmarked an increase in income taxes on Social Security benefits for the Medicare trust fund.

Dodd has a point. It would be better to reform Medicare along with the overall health care system since their costs are so closely linked. Unrestrained Medicare payments are a prime reason health care costs began to spiral in the late sixties and early seventies. The Monthly has argued for years that a well-designed single-payer system like Canada's would solve many of our most pressing health care problems, including those of Medicare. Lehrer should have asked Dodd what he meant by saying it should be reformed "in the context of health care overall." Lehrer should have also pointed out that because overall reform is unlikely in the near future, we still need to do whatever can be done about Medicare now. In the next two years Medicare costs will increase by more than 20 percent.

Not so. The "trust fund" is a convenient way of describing how much money the government plans to spend on Medicare, but the program is integrated into the federal budget--if the trust fund runs out of money, the shortfall is paid from the general fund. This may increase the deficit, but it won't spell the end of Medicare. Raising the specter of "no insurance program for senior citizens" is a scare tactic, designed to herd public opinion into the Republicans' corral.

Is Gregg forgetting that the Republican plan calls for increasing beneficiaries' share of the premium for Medicare Part B (the part of the program that covers doctor visits and other non-hospital costs)? Seniors' share of the premium is currently 31 percent, and would revert to 25 percent by 1996 under present law. Senate Republicans are proposing an increase to around 35 percent, possibly higher for the wealthy.

Gregg's rhetoric of "choice" disguises a basic premise of the Republican plan: They hope to save money by nudging seniors towards Health Maintenance Organizations (HMOs), which reduce costs by restricting choice.

"Give 'em what Congress has got"--a line straight from Hillary Clinton's health care reform playbook. But Mrs. Clinton was pointing out that some 37 million Americans had no health care coverage, while members of Congress had the best coverage in the nation. Gregg's appropriation of this rhetoric falls flat. Most senior citizens will never have the options members of Congress have. As federal employees, congressmen choose from an array of top-notch health care plans. And as Capitol Hill royalty, they enjoy numerous medical perks unavailable to the general populace (like an on-site physician and access to the Walter Reed Army Medical Center). When members retire, they can keep their health plans as long as they want (paying the same premium as they would as employees), and when they hit 65, their still-subsidized plans can be used to supplement Medicare.

It's not clear what Gregg is talking about here. His office claims he was referring to employers' health care costs, which actually decreased 1.1 percent in 1994, in large part due to employers aggressively seeking competitively priced managed care plans. However, that is not the only measure of health care inflation in the private sector. The medical component of the Consumer Price Index, which measures individuals' expenditures on health insurance premiums and out-of-pocket medical expenses (but excludes employer-paid health insurance premiums and government-paid health care like Medicare and Medicaid), increased 4.8 percent in 1994.

We learned in the background report that Medicare beneficiaries pay an average of $2,800 a year for deductibles, co-payments, and supplemental insurance. Gregg's hypothetical figure is almost twice that. If Gregg is talking about what it costs the program, he should not refer to what it costs "them," the beneficiaries.

HMOs won't necessarily save money for Medicare. (Ten percent of Medicare beneficiaries are already in managed care, and the government is not saving a dime.) In fact, the hybrid system with both HMOs and fee-for-service that Gregg favors could be a budget buster. Here's why:

Republicans propose giving beneficiaries vouchers in the amount of the average per capita Medicare cost (Gregg implies here that the vouchers would be based on each recipient's actual cost, but that's not what he meant, his office says), and allowing them to purchase their own health care plan and pocket 75 percent of their savings. There's a huge problem with this: Relatively healthy people will easily find cheaper plans and turn a nice profit, while many sicker people will be unable to find plans for the amount of the voucher. They'll remain in fee-for-service. With the government spending far more on the healthier people and just as much on the sicker ones, Medicare costs would soar. Remember, 70 percent of all Medicare funds are spent on the sickest 10 percent of recipients. Without controlling costs among this group, reform efforts will fail.

Currently, when HMOs take on patients enrolled in Medicare, they receive a flat fee--95 percent of the average per capita Medicare cost. Naturally, HMOs prefer healthier patients, since they get the same money and pay less for care. Under current law, which requires HMOs to take all comers from Medicare, they use clever marketing schemes--and even crude tactics like keeping their office up a flight of stairs--to keep the sicker, more expensive patients away. The way the system works now, according to the Congressional Budget Office, Medicare spends more for people in HMOs than it would have spent on them in fee-for-service.

"HMOs can be as wasteful as anything else. It all depends on the framework in which they compete," explains Neil Howe, chief economist for the National Taxpayers' Union.

Not a bad question, but Gregg just rattled off a litany of untested assumptions and questionable claims. This would be a great place to say, "Wait a minute. Will Medicare really end if the trust fund goes dry?" or "Will HMOs in fact save the program money, given the history?" Even with the question Lehrer did choose, why not be more specific: "You just said beneficiaries won't be hit. What about the plan to increase their premiums?"

The problem here may be that Lehrer, as a television anchor, simply cannot know everything there is to know about everything that crosses his desk. Medicare reform is a contentious and complicated issue, and it's impossible to get up to speed on all the specifics in a few hours. Why not have a NewsHour reporter who has been covering Medicare moderate the discussion? True, MacNeil and Lehrer are the stars, but is public television about celebrity or education?

But he just said the way to savings "isn't by hitting the beneficiaries at all." Now he says there will be "some adjustment," which is chicken-speak for increasing their share of the Part B premium. It's not a bad idea. Why doesn't he come clean?

They say this now--and we hope they stick to it--but experience shows that Republicans don't cotton to means testing, or anything else that burdens the affluent. For instance, they plan to reverse the 1993 law which increased the portion of Social Security benefits subject to federal income tax from 50 to 85 percent for individuals earning more than $35,000 (couples, $44,000).

Ironically, that money is designated for the deflating Medicare trust fund; without it, the impending crisis will worsen.

Lehrer could pose a more probing or specific question than this. How about asking Dodd if he agrees that HMOs would save Medicare money? Or if Democrats support an affluence test?

Gregg has been arguing that HMOs will save money for Medicare. What is Dodd's position? From his comments here, it's impossible to tell.

More doomsday rhetoric that doesn't match reality. With Social Security and pension cost of living adjustments, the incomes of many retirees are no more fixed than those of wage-earners. And the elderly are far and away the wealthiest segment of society.

Why does Lehrer keep letting this central point pass? You can't cut Medicare without considering how it will affect health care costs overall. In America's complicated health care morass, almost any systemic changes--whether it is encouraging managed care, providing vouchers, or even increasing co-payments--will affect the balance of health care delivery nationwide. In the past, Medicare has saved money by reducing its payments to hospitals. To recoup their losses, the hospitals have simply raised their prices for everyone else. Gregg needs to respond to this problem and it's Lehrer's job to see that he does.

This is the kind of question one wants Lehrer to ask--good and tough, calling attention to the fact that Gregg is fudging the facts. As this goes to press, Republican leaders of the House and Senate agreed to $245 billion in tax cuts would begin in time for the 1996 elections, but well before 2002, which is when the Republicans say their plan will bring a balanced budget.

Just minutes earlier, Gregg said that the trust fund is "out of whack" by $262 billion over five years. But he also said that the Republican balanced budget proposal seeks only a $160 billion "adjustment." Why don't the Republicans' numbers add up? Another question Lehrer didn't ask.

One reason he didn't might be that Medicare reform boils down to details--lots of them. The show's format demands the impossible of its moderators: be experts and generalists. If the NewsHour truly wants to perform a public service, it has to work harder to take guests to task for their errors, omissions, and fabrications.

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MacNeil/Lehrer NewsHour

May 10, 1995

MR. LEHRER: Now, to our debate with two members of the Senate Budget Committee: Christopher Dodd, Democrat of Connecticut, and Judd Gregg, Republican of New Hampshire, who headed the committee's working group on entitlement reform earlier this year. They both join us from Capitol Hill. Senator Dodd, what do you think of the Domenici Republican approach to Medicare?

SEN. CHRISTOPHER DODD (D--Connecticut): Well, I think it goes far beyond what needs to be done. Obviously, you've got to look at the reform measures we tried last year. You may recall the health care effort that failed, but there, there was some $55 billion in cuts in Medicare the president proposed, in fact, succeeded in getting. We had $124 billion as part of the health care package which did not make it. That has extended the solvency of the fund an additional three years, and clearly more needs to be done. No one questions whether or not we need to reform it, but it needs to be reformed, in our view, in the context of health care overall. It isn't just a Medicare problem. It's a Medicare--it's a Medicaid problem. It's access. It's rising costs. The inflation factor is double-digit. It's higher than the Consumer Price Index, and it seems to us that before you just decide you're going to take some significant cuts in the growth of Medicare, which will be tantamount to a $900 increase to retirees--that is out of pocket expenses that they can hardly afford--we ought to be looking at the totality. That's what the President has asked for. And, of course, last year, every effort we made in this area, we were told there was no crisis, nothing needed to be done, and now we're being told a few weeks later that something has to be done. I would add that I think there is a legitimate suspicion that these cuts in Medicare appear to be, at least from a House perspective, less so in the Senate bill offered by Senator Domenici, that these are going to be used to pay for a significant tax cut, the benefits of which by and large will go to upper-income taxpayers in the country, not to working families. And that seems to be a very legitimate concern as well. So reform is on the table, ought to be, we need to look at it in terms of how we can solve it, but this goes very, very deep, and a lot of people, hard-working people who've spent all of their lives building this country, are going to be asked to pay a very dear price, indeed, without looking at the totality of the problem.

MR. LEHRER: Do you agree with that, Senator Gregg, that people are going to have to pay a very deep price for this?

SEN. JUDD GREGG, (R--New Hampshire): No. And, in fact, I think the Senator's made a number of statements which are inaccurate. To begin with, it's the trustees of the trust fund--four of whom happen to be administration officials, including Donna Shalala--who have told us if we don't do something about this the trust fund goes insolvent in the year 2002. And that means there is no insurance program for senior citizens, so the matter has to be addressed. In addition, the trustees have set the number. They've said that the trust fund is out of whack by the amount of $262 billion over a five-year period. Now, we haven't attempted to get to that large a number, quite honestly, because we thought it was too big a number to adjust. Our adjustment is in the range of $160 billion over five years. And we've suggested that the way you get to that isn't by hitting the beneficiaries at all. What we've suggested is that we give the beneficiaries some choices that they don't presently have. We've suggested that the beneficiaries have a program much like members of Congress have where they can go out in the market and choose other programs than fee-for-service. As your introductory comments noted, 90 percent of the senior citizens are using fee-for-service. That's because they grew up with it in the fifties and the sixties. But that's the most expensive form of health care. What we've suggested is to create an economic incentive to allow seniors to go out and choose other forms of services, such as HMOs or PPOs, fixed cost delivery services, and we've said if they want to stay with fee-for-service they can. Voluntarily, they can choose whichever program they want, but if they choose a fixed-cost program, and it's less than what fee-for-service costs, then we're going to allow them to keep a significant amount of what they save. Say the program they have today costs them $5,000, and be able to go out and go into an HMO that costs $4,500 with the same benefit structure, maybe even a better benefit structure because many HMOs stress wellness and preventive care, then they'll be able to keep 75 percent of the $500 difference. And that'll create: one, an economic incentive for seniors to look for other and better types of health care; two, it will create in the marketplace a variety of different health care programs coming out to seek seniors' business; and three, for the federal government, what it gives us is a fixed rate of increase. And we're not talking about cutting Medicare at all. And I think that's very important to note here. We're talking about taking a rate of growth in Medicare which is now 10 percent, three times the rate of inflation in the private sector, 10 times the rate of health care inflation in the private sector, and reducing that rate of growth down to 7 percent. So we're talking about a dramatic increase in the amount that's spent on Medicare here.

MR. LEHRER: And that can be done--according to your calculations and those of Senator Domenici and others--without hurting any of the people who are the beneficiaries?

SEN. GREGG: Well, there will be some adjustment for beneficiaries, but more importantly, the adjustments will be, we think, in a positive way and the beneficiaries will be given more choices. They'll be given the opportunity, like members of Congress are, to go out and take an HMO program and if the HMO program costs less, then they'll save money. Now, as we get into--as we transition into that, there's going to be a transition period. And what we suggested is that the savings up front that are needed in order to get on a glide path to making this Medicare system solvent here. And what you got to remember here is if we don't make it solvent, beneficiaries are really going to be hurt because they won't have a system at all to get on that glide path. We suggested some adjustments which impact provider groups, they impact doctors, they impact hospitals, and they impact some segments of the beneficiaries but the affluent ones primarily, because we do put in an affluence test on the Part B premium which we think is very reasonable--so that John and Mary Jones who are working 60 hours a week at the local restaurant to make ends meet don't end up subsidizing the 500 top retirees from IBM.

MR. LEHRER: Senator Dodd, what's wrong with that? What's wrong with giving the folks more choices and all the things Senator Gregg just outlined?

SEN. DODD: Well, it sounded wonderful, didn't it? But the fact of the matter is you have an awful lot of people that don't have those choices because in the fee-for-service plan, they don't want to take on someone. As you know, people are living longer today, and a lot of these people have not--don't work out financially in the fee-for-service area, so they don't have those choices at all, and so that makes it much more difficult. Secondly, you have organizations like the National Association of Manufacturers, the American Hospital Association has said rather bluntly here that if you have these kind of very deep cuts--and they are--it may not be much if you're on the wage or salary of a congressman or senator--but if you're on a fixed income like the elderly are, this is a huge whack and that's one of the problems of getting some sense of reality of what this means to them. Those costs get shifted. Hospitals are not going to just absorb these costs. They're going to pass them on in higher health care costs to others. So working families out there pay more, or the premiums go up, and business is very worried about it, so it isn't just the elderly here who can pay the price but also other segments of the economy.

MR. LEHRER: Senator Gregg, let's come back to a point that Senator Dodd raised earlier, that he has, he thinks that people have a legitimate suspicion--that was his word--legitimate suspicion--that was his word--legitimate suspicion--that what's really at work here is that Medicare will be reduced or that growth--the rate of growth of Medicare will be reduced in order to finance a tax cut that you Republicans, particularly in the House, are committed to.

SEN. GREGG: Well, number one, the Senate bill has no tax cut in it until you get to a balanced budget and until you've restored the actuarial soundness of the trust fund. And the number one goal here, remember, is to restore the actuarial trust--the soundness of the trust fund--which is linked to deficit reduction. I mean, the fact is--and it's only logical and this point was made by the trustees of the trust fund when they testified before us--that if you're able to bring a trust fund into balance, which is way out of balance right now, that in the process, you obviously positively impact the deficit issue, but there is no tax cut in our bill.

There is no transfer in our bill because the tax--to the extent there is a tax cut in our bill--it doesn't incur until after we've gotten to a balanced budget and until after it's been scored as a balanced budget...