Gingrich: Today’s Medicare Will ‘Wither’ : Health care: Aide says he was describing voluntary shift away from fee-based system. Democratic leader calls it a sign of intent to ‘obliterate’ the program.

WASHINGTON —  Despite repeated GOP assurances that it is out to “preserve, protect and strengthen” Medicare, House Speaker Newt Gingrich (R-Ga.) said this week that Republicans believe the traditional Medicare system now serving 37 million seniors will “wither on the vine” under the far-reaching reforms about to be enacted by Congress.

Gingrich’s extemporaneous comments on Medicare’s transformation came during a little-noticed appearance Tuesday before the Blue Cross/Blue Shield Assn. meeting here. A transcript of his remarks was made available to The Times Wednesday night.

Tony Blankley, a senior aide and press secretary to Gingrich, confirmed the Speaker’s remarks but downplayed their significance.

Blankley said that Gingrich’s comments were consistent with the Republican belief that most seniors will voluntarily choose to leave the traditional Medicare fee-for-service system in favor of health maintenance organizations and other managed-care networks once they discover the benefits of the reforms that Republicans have devised.

Even so, if that shift dries up fee-for-service Medicare, it will mean the end of the system as most seniors know it. Gingrich has never publicly expressed a view that fee-for-service Medicare would end, and most other Republicans have maintained consistently that fee-for-service medicine would always remain an option under Medicare.

As word of Gingrich’s comments circulated Wednesday night on Capitol Hill, Senate Minority Leader Tom Daschle (D-S.D.) said they “confirm what we’ve said all along--that the Republicans want to obliterate Medicare [because] they believe that Medicare has outlived its usefulness and they are prepared to end it as we’ve known it.”

Throughout this year’s contentious debate about Medicare reform, Republicans have predicted that vast numbers of seniors will join less expensive health maintenance organizations and other managed-care networks voluntarily. In exchange, those beneficiaries would, in theory, be offered additional benefits, such as eyeglasses and outpatient prescription drugs.

The extent to which seniors actually will leave fee-for-service for more restricted delivery arrangements is subject to dispute. Gingrich has estimated savings of as much as $90 billion over seven years--one-third of the total Medicare savings--from the movement into managed care.

But the independent Congressional Budget Office said that the House Medicare reform plan would produce only $34.2 billion in savings over seven years by channeling seniors into managed-care plans.

Currently, only 9% of Medicare beneficiaries are enrolled in HMOs and managed-care systems. Under the reforms offered by the GOP, Blankley said, “rationally, people will want to go there.”

At the Blue Cross/Blue Shield meeting Tuesday, Gingrich said:

“Now, we don’t get rid of it in Round 1 because we don’t think that that’s politically smart and we don’t think that’s the right way to go through a transition.

“But we believe it’s going to wither on the vine because we think people are voluntarily going to leave it--voluntarily.”

Blankley said that the word it in each of those sentences referred to fee-for-service medicine.

Another controversial element of the GOP’s Medicare plan is a so-called “fail-safe adjustment mechanism” that would reduce payments to fee-for-service providers further if projected levels of savings are not reached under their plan.

Overall, the GOP plan is projected to yield $270 billion in Medicare savings by 2002--achieved through a reduction in the annual growth rate from the current 10% to 6.5%.

As it is, according to the CBO, the Republican plan would result in a reduction in fee-for-service payments to doctors and hospitals of $146.8 billion over seven years.

Unlike HMOs and managed-care systems that restrict physician access, especially to specialists, Medicare beneficiaries in fee-for-service arrangements are free to see any physician.

Also Wednesday, Democratic operatives circulated a videotape containing a brief comment by Senate Majority Leader Bob Dole (R-Kan.) that they hoped would provide arguments against the GOP Medicare plan. In remarks to the American Conservative Union, Dole is shown and quoted as boasting: “I was there, fighting the fight, voting against Medicare . . . because we knew it wouldn’t work.”

Dole’s office had no comment.