health reform.  Considerable experience with similar reforms in the past suggests that this ACO strategy will lead to yet another health policy dead end. Answer contributed by Drs. Steffie Woolhandler and David Himmelstein What is PNHP's perspective on the Medicare crisis? Medicare can only be saved by incorporating it in a single payer program that would be very different than the current Medicare program. 1)  Medicare benefits need to be greatly upgraded.  At present, Medicare covers less than half of the total medical expenses incurred by its beneficiaries. - Its physician fee schedule is wildly skewed toward specialist care and needlessly complex; it discourages salaried practice. - Its hospital payment system uses per-patient payments rather than global budgeting, and lumps together capital and operating payments -- negating any real health planning possibilities. - Its rehab and nursing home payment methods are similarly complex, discourage health planning, and reward institutions willing and able to engage in financial scheming. -The home care payment system burdens nurses with extreme amounts of paperwork, rather than paying home care agencies lump sum budgets. 3) As long as Medicare is one among many payers it cannot achieve substantial administrative savings (in doctors' offices, hospitals, and other facilities) and it cannot enforce the health planning changes needed to "bend the cost curve" over the long term. In short, the only way to preserve Medicare is to replace it with a single payer program with comprehensive benefits and effective cost controls (negotiated fees, global budgets, and bulk purchasing)