The U.S. spends $2.8 trillion a year on health care, about 18 percent of the economy. As recently reported, some of that spending is on Medicare-reimbursed eyelid lifts -- a procedure that sometimes serves a medical need but often is for cosmetic enhancement.

Most would agree Medicare should pay for medical need, not to make seniors look better. How could the program better distinguish between the two?

This instance reflects a more general challenge about public (or even private) coverage of health care: how we use collective funds to pay for more of what we need and less for the things that don’t enhance health but that some may want.

Medicare has been at the center of this debate because it consumes a large fraction of our tax dollars: about 16 percent of federal spending today and an estimated 18 percent by 2023. One way to curb this growth is to leave decisions about spending to the beneficiaries, but increase deductibles and co-payments.

Another is to use evidence and data to recognize which interventions work best and for whom, and to cover procedures that do, something called “value-based insurance design.” These two approaches aren’t as different as they appear.

To date, Medicare hasn’t moved far in either direction. This leaves it open to payments that some might consider wasteful, such as for eyelid lifts. Over the past decade, the number of reimbursed eyelid-lift procedures has tripled. The cost to taxpayers has quadrupled, to $80 million from $20 million.

Florida Cases

Medicare traditionally avoids coverage for cosmetic procedures such as Botox or breast augmentation (except after medically necessary breast removal). So why cover eyelid lifts? It’s possible that more of the elderly are suffering real vision problems in need of corrective surgery.

But is it likely that a disproportionate number of these patients live in one state? More than half of the 20 highest-billing physicians were in Florida, where one doctor submitted for 2,200 eyelid lifts in 2008 alone.

This raises the suspicion that some doctors are blurring the line between use of the procedure to correct impaired peripheral vision, and to make someone look younger. Eyelid lifts are just one example. There are many other treatments, such as coronary-artery stenting, that benefit some patients and not others, to whom they are given anyway.

Medicare needs to do a better job of distinguishing between the two. One way would be to require pre-authorization for procedures, using strict criteria for medical need. Medicare doesn’t do that now. Medicare could also scrutinize doctors who perform a large number of procedures, imposing penalties on those who are found to be performing them excessively and unnecessarily.

It may seem outrageous that this doesn’t happen already. In general, doctors and the public rebel against such oversight and control as an intrusion into the doctor-patient relationship.

This very issue caused the backlash in the 1990s against managed care. Insurers were exerting what was thought to be excessive control over medical decisions and interfering with physician autonomy. Nevertheless, private insurers impose pre-authorization constraints on some procedures and monitor the billings of doctors with whom they contract. It’s time Medicare did the same.

In addition to these approaches, Medicare should start directly assessing and paying based on value. It should avail itself of the judgment of a body that rules on the merit of certain treatments -- those of higher value would be reimbursed at a higher rate. We’re not talking about death panels; no beneficiary should be denied life-preserving care. However, if patients want lower-value procedures, they may have to pay more out of pocket for them.

Stressing Value

If this mechanism was in place, we would probably see fewer submissions for eyelid lifts. Alternatives such as reducing costs across the board or raising the Medicare eligibility standard would be unfair and ineffective, shifting costs to seniors without hitting the right target: the value of care delivered.

The example of eyelid lifts is easy to rail against. Purely cosmetic operations are obviously not something most taxpayers want to finance. Yet the resistance from beneficiaries and doctors to ending coverage of eyelid lifts illustrates that reforming Medicare is more than cosmetic.

Short of huge increases in taxes or debt, however, there just isn’t enough money to cover projected future costs. We must reduce what we spend one way or another. Stopping Florida seniors from getting free plastic surgery is one way to start.

(Aaron Carroll is a professor of pediatrics at Indiana University School of Medicine. Austin Frakt is a health economist with the U.S. Department of Veterans Affairs.)

To contact the writer of this article: Aaron Carroll at aaecarro@iupui.edu Austin Frakt at frakt@bu.edu.

To contact the editor responsible for this article: Christopher Flavelle at cflavelle@bloomberg.net.