Indeed, three out of five of the protege's claims in this case-those involving breach of contract, third-party beneficiary liability
, and promissory estoppel--did survive the mentor's legal challenges.
While most efforts to constrain costs have been directed at the supply side, these changes may also have implications for beneficiary liability (demand side) as well.
Of course, other efforts to limit reimbursement on the supply side may serve to limit beneficiary liability. We merely wish to point out that, while most efforts to constrain Medicare costs have sought to avoid affecting beneficiary liability, such impacts are in many cases inevitable, and may even serve to raise benficiary liability.
Table 4 indicates that changes both in Medicare reimbursement and in beneficiary liability and ability to pay affect Medicare expenditures substantially.
Although the results suggest that significant cost savings to Medicare may be realized either by constraining reimbursement (supply-side constraints) or by increasing beneficiary liability (demand-side constraints), it is unclear which of these options for controlling Medicare costs is prefarable.
That demand factors apparently have played a significant role in raising Medicare expenditures does not imply that efforts to increase beneficiary liability serve the public interest.
In 1977, total beneficiary liability accounted for about 18.0 percent ($4.5 billion) of all Medicare expenditures; in 1983 and 1990, the comparable figures were 17.6 percent ($11.4 billion) and 16.5 percent ($20.0 billion), respectively (Figure 3.16).
As a proportion of all beneficiary liability, the HI deductible liability amount increased from 18.8 percent in 1977 to 22.6 percent in 1990.
This cohort accounted for only 16.5 percent ($3.3 billion) of all beneficiary liability. In contrast, the remaining 35.9 percent (9.7 million) of the beneficiaries with cost-sharing liability were responsible for 83.5 percent ($16.7 billion) of the total beneficiary liability.
As currently envisioned by HHS Secretary Otis Bowen, Medicare would be restructured to limit beneficiary liability
to $2,000 per year.
For the years 1984-88, trend data on Medicare physician and supplier services are shown by: distribution of Medicare program payments and beneficiary liability (Table 3); assignment rate by State of residence of the beneficiary (Table 4); allowed charges by physician specialty (Table 5); and allowed charges by place of service (Table 6).
* The total Medicare program and beneficiary liability for physician and supplier services increased from $24.6 billion in 1984 to $34.8 billion in 1988, representing an AARG of 9.0 percent.