The Dallas Morning News is reporting that Mark McClellan, who is currently the head of the Centers for Medicare and Medicaid Services (CMS), may be resigning on Tuesday. I heard him speak at the conference I attended in Chicago last month. Mr. McClellan was articulate and interesting, and he definitely knew his stuff. I was very impressed with his Q&A style. He was relaxed and not easily fazed by the barrage of questions sent his way.

I'm always telling my boss that CMS or Medicare is a trendsetter for health care. In the next 10-20 years, I think the stats are 50% of the country will be on Medicare because of the baby boom retirees. That's a lot of people on the government plan. The sheer volume of people expected to be on Medicare make the current levels of payment unsustainable for the U.S. economy. The US cannot fight a war and have that many people receiving social security benefits and health insurance.

I would expect for Medicare to start some serious cost containment programs soon. CMS already has a few in place, but they will need to have them at all levels to try and control costs. Some exec at one of the plans, can't remember which, predicted that the pool of businesses that offer health insurance will start to seriously shrink and more and more people will have to turn to the government for health care.

Walmart started the trend by not offering health care, and other companies will soon follow. I have been predicting for some time that when, not if, the big three automakers (GM, Ford and Chrsyler) declare bankruptcy, the first thing to go will be the retiree health insurance. In fact, I can see the execs of each corporation recommending bankrupty as a way to unload retiree costs, since it looks better to dump them in bankruptcy than when the company is still solvent.

A bankruptcy would give them the cover they need to unload the retirees, get concessions from the unions, and restructure the company. And those poor retirees will have to turn to Medicare for their health care, and Medicare won't be able to handle it. The gloom and doom health exec then said that Medicare will contract with the individual health plans to take of the sudden influx of retirees into the government system.

This will be a recipe for disaster because right now the easier and in the short term cheapest way to reduce health care costs is to have everyone on medication. Preventative care requires too much manpower, and the CMS payment system does little too reward preventative care although they are trying to reverse this trend. In the long run however, I think that people on medication will cost the government more because who knows what the side effects will be for people on continual medication. I can only relay what what people have been predicting for the last 10 years, which is that 3 out of every 5 americans will be suffering from some debilitating disease and that there will more people requiring care than people paying into the system to pay for the care and people healthy enough to take care of the sick.