DATE: Tuesday, July 29, 1997                TAG: 9707300022

SECTION: LOCAL                   PAGE: B8   EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   53 lines

BACK FROM THE BRINKTAKING ONE STEP FORWARD, TWO STEPS BACK, REFORM MAY NOT ARRIVE IN TIME TO SAVE THE SYSTEM.

In an image straight out of Butch Cassidy, Bob Dole was fond of pointing out that the only way to achieve entitlement reform was for Republicans and Democrats to hold hands and jump together.

It looked for a time this summer like bipartisan reform might be a possibility. Instead, the two sides appear to be backing away from the brink. Gutsy proposals by Senate Republicans called for an increase in the eligibility age for Medicare, higher deductibles and premiums on a sliding scale so that ore affluent seniors would pay somewhat more for care.

Those proposals now appear to be dead. Left-wing Democrats and right-wing Republicans in the House opposed the measures. President Clinton promised to hold hands, but Republicans feared the slippery grip of a man who demagogued the issue less than a year ago. A robust economy and declining deficits may also give legislators a false sense of security and a reduced sense of urgency

Politically, flinching from entitlement reform is understandable. Actuarially, it is irresponsible. The huge baby boom generation daily inches closer to retirement and when it arrives and presents the bill for Medicare and Social Security, the country will be unable to pay unless reforms have been made. And the sooner, the better.

Raising the eligibility age would subject seniors to an unacceptable gap between retirement and benefits kicking in, but expecting seniors with means to contribute more for coverage isn't unreasonable.

Fundamental reforms to the system are also badly needed. Reports of tens of billions in annual overpayments and of widespread home health fraud don't inspire confidence. The existing red-tape nightmare benefits no one other than the paper shufflers.

The system needs to be rationalized, then policed. This is another area in which laws have been passed, but too few cops put on the beat to ensure compliance. Incentives for the efficient delivery of health care are also needed. Presently, the incentives are often for actions that neither enhance patient care nor encourage thrift.

It may sound like a cop-out to suggest that an independent commission is needed to propose fundamental reforms outside the ambit of politics. Certainly, there have been previous studies that now gather dust. But the system careering toward insolvency is the result of politics as usual.

An attempt must be made to construct a package of reforms before political pressures come to bear. Of course, even if dispassionate wise men propose, partisans will dispose. They will ultimately have to hold hands and jump. The approach of the baby boomer posse could be the impetus needed to force action. But as yet, it is only a speck on the horizon. To get the partisans in a hand-holding frame of mind, boomers may need to fire off a couple warning shots.

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