Medicareless: the nation's largest insurer of the elderly could add a few benefits and save a few billion.

• Author: Franklin, Daniel

It's time for a health care quiz. If you were in charge of the largest health insurer of the nation's elderly would you:

1. Pay enormous charges for unnecessary and avoidable procedures and hospital stays, thereby incurring one of the largest drags on the nation's deficit, or

2. Fund proven, less expensive options that can be prevent extended illnesses, thereby reducing the cost to senior citizens and taxpayers?

If you picked B, don't quit your day job.

But if you picked A, congratulations, you may have a career waiting for you in the Health Care Financing Administration (HCFA), the organization that administers Medicare.

And that's the problem, for as HCFA and Congress grope for ways to reduce costs in the Medicare system, they see only the simplest and, ironically, the most harmful cures. Congress thinks only in terms of reducing benefits or trimming physician reimbursement rates. The seriousness of the health care crisis, they say, justifies the austerity of these measures. But times of emergency require more than mere draconian budget cutting; they require creativity.

Preventing serious illness - instead of waiting until expensive treatments are necessary - or offering alternatives to unnecessary procedures and hospitalizations can actually save HCFA money. It's a paradox that both politicians and the elderly can learn to love: By adding benefits, you can increase the health of America's senior citizens while slowing the meteoric rise of the Medicare budget.

* Increase funding of home health care.

"People are almost always happier in the home, and we would like to keep them there," says Joanne Schwartzberg, director of geriatric health at the American Medical Association. "We just haven't figured out a way to do that yet." The obstacle, however, isn't lack of medical knowledge; the obstacle is HCFA. Although patients are more comfortable at home, and home health is overwhelmingly cheaper than equivalent hospital care, Medicare's coverage encourages patients to stay in hospitals. The health benefits alone should be enough to encourage HCFA to increase its home care coverage, but since it is not, consider some of the economic advantages:

* According to study by Lewin/ICF, a patient recuperating from a hip fracture at home incurs $2,300 less in medical costs than one who stayed in a hospital. These savings multiplied by the approximately 250,000 hip fractures per year, could put Medicare's savings into the hundreds of millions.

* The same study found a $520 per case savings for victims of chronic obstructive pulmonary disease. At nearly 95,000 cases per year, that comes to an additional $48 million savings.

* By treating...