Concluding Observations

Considering Medicare’s complexity, size, and statutory constraints, some contend that HCFA’s management of Medicare has—on balance—been satisfactory, while others argue that it has not been acceptable. There is evidence that HCFA’s success has been mixed and that the agency’s challenges are growing. Effective governance of Medicare depends on finding a balance between flexibility and accountability—that is, granting the agency adequate flexibility to act prudently while ensuring that it can be held accountable for its decisions and actions. Moreover, because Medicare’s future will play such a significant role in the nation’s fiscal future, we believe it prudent to make an adequate investment to ensure that Medicare is professionally and efficiently managed. Achieving such a goal will require that the day-to-day operations of Medicare’s traditional program are modernized and maintained, and that achieving program efficiency and effectiveness remains paramount.
What GAO Found

Considering the complexity, the size, and the statutory constraints affecting the Medicare Program, some contend that the Health Care Financing Administration's (HCFA)--recently renamed the Centers for Medicare and Medicaid Services--management of Medicare has, on balance, been satisfactory. Others argue that HCFA's management has been unacceptable. HCFA's record has been mixed and the agency's challenges are growing. Effective management of Medicare depends on finding a balance between flexibility and accountability--that is, granting the agency adequate flexibility to act prudently while ensuring that it can be held accountable for its decisions and actions. Moreover, because Medicare will play such a significant role in the nation's fiscal future, it is prudent to make an adequate investment to ensure that Medicare is professionally and efficiently managed. Achieving this goal will require the modernization and maintenance of Medicare's traditional day-to-day operations.