More On Medicare Cost Cutting
This is from the NBER working paper by Vivian Y. Wu and Yu-Chu Shen, examining the long term impact of Medicare payment reductions on patient outcomes using a natural experiment – the Balance Budget Act (BBA) of 1997 (via Austin Frakt):
This is not good news for Obama Care. See previous posts here and here.
A recent RAND Technical Report highlighted the fact that payment reforms designed to encourage efficiency could have the effect of reducing quality. In economics, this would be referred to as the law of diminishing marginal returns. As inputs are added, the outcomes improve but not proportionally to the inputs. That doesn’t mean, however, that outcomes don’t rise. We could theoretically spend our entire GPD on health care in useful ways. But we should probably stop short of that since most people would prefer to trade other amenities for the last output of health achieved at a very high cost.
These graphs are rather stunning. And this is a very serious study.
Fascinating.
So we cannot cut Medicare spending?
Steve
This is very disturbing, when you consider that this is the way Obama Care is paid for.
Doesn’t look good for seniors.