The Application And Influence Of The Balance Budget Act Of1997in The American Medicare System

Medicare who serves the old people over65years old，can effectively preventthe elderly poverty, protecting the old people’s health.Otherwise,Medicare also plays ahuge role in the maintenance of social stability and promoting the development ofnational economy。However, with the development of the aging of the population andthe health care delivery system, Medicare is also facing many problems, such asfinancial problems, fairness, prescription drugs, long-term care issues.Among them,the most fundamental problem is the financial problems.Although, several Republicanpresidents, such as Nixon, Reagan, Ford, Bush tried to pass health care reform inorder to cut expenditure and to achieve a balanced budget objective。But most haveeither failed or succeeded only moderately. With the Medicare costs soaring, thebiggest problem is the Medicare trust fund bankruptcy.The Balanced Budget Act of1997who can solve this problem is amilepost-type-measures. In order to control the cost of the Medicare, guarantee thelong-term solvency, achieve a balanced budget, it wss based on traditionalmanagement methods (such as price management, cost management), also introducedcompetition mechanism. In the medical service providers,"the Balanced BudgetActof1997"carried out the reform focusing on the emergency nursing, healthmaintenance organizations and the costs of doctor’s treatment.The prospectivepayment system was introduced to the organization of the emergency nursing and thehealth maintenance organizations.It had changed the past simply capitatedpayment,whice led to the excessive waste.How to restrict the excessive fees at thesame time to improve the working enthusiasm of doctors and a cost cutting initiativeis the key to solve the problem.The biggest innovation in the Balanced Budget Act of1997is the Medicare+Choice Program.Market mechanism is introduced into the Medicare whice is basedon government management.Competition between various health care providersimprove work efficiency, and reduce the medical expenses.At the same time,it alsoexpand the beneficiary the freedom to choose medical service range.However, the beneficiary is forced to face the risk of more of the cost sharing ratio and selection.After the implementation of “the Balanced Budget Actof1997", America Medicarecost growth slowed, and medical cost is relatively reduced, whice led to Medicaretrust fund to eliminate the bankruptcy crisis. Thus, the Balanced Budget Act of1997(BBA) is considered to be the biggest reform since the implementation of therate in the1980’s.