Medical Costs and Medicare

May 24, 1967

Report Outline
Impact of Medicare on Medical Costs
Problems in Pricing Medical Services
Means of Curbing Increases in Costs

Impact of Medicare on Medical Costs

Coming Conference on Costs of Medical Care

Calling of a national conference on the costs of medical care, to be held in Washington on June 27 and 28, underlines the administration's deep concern over the sharp rise in this important item of family expenditure. A spokesman for the Department of Health, Education and Welfare, which is planning the conference, said on May 14 that its purpose was to “focus public attention on an increasingly important problem” and prepare the way for legislative or other action to deal with that problem.

Costs of medical care have been rising steadily since World War II, but the increase in 1966 was more than twice as great as any in the preceding half-dozen years and was the biggest in 18 years. Acceleration of the upward trend apparently was triggered by introduction of the Medicare program for underwriting the costs of private medical services for persons past the age of 65 years.

Medicare and Private Health insurance Plans

Medicare, and the sister Medicaid program, sharpened pre-existing inflationary pressures in the multibillion-dollar health industry, but it is not yet clear whether their cost-pushing effects are minimal, temporary, or correctable. Doctors deny charges that they raised fees inordinately when the government took responsibility for paying a large part of the bills of a large proportion of their patients. Meanwhile, hospitals are seeking a revised reimbursement formula that will pay them more than at present for services to Medicare patients. Doctors and hospitals both complain of costly and time-consuming paperwork.

ISSUE TRACKER for Related Reports
Medicaid and Medicare
Jul. 16, 2004  Medicaid Reform
Aug. 22, 2003  Medicare Reform
Jul. 18, 1975  Medicare and Medicaid After Ten Years
May 24, 1967  Medical Costs and Medicare
Dec. 08, 1965  Preparations for Medicare
Apr. 20, 1960  Medical Aid to the Aged
Budget and the Economy
Health Insurance and Managed Care
Medicaid and Medicare
Medicaid and Medicare