Seniors on Medicare Consume Twice as Much Care
This is from a WSJ editorial by Merrill Matthews and Mark Litow:
Almost all discussions about Medicare reform ignore one key factor: Medicare utilization is roughly 50% higher than private health-insurance utilization, even after adjusting for age and medical conditions. In other words, given two patients with similar health-care needs—one a Medicare beneficiary over age 65, the other an individual under 65 who has private health insurance—the senior will use nearly 50% more care.
Very interesting result.
Medicare’s unfunded liability is $107 trillion when extended out to infinity. Litow (an actuary) explains that the mere act of enrolling in Medicare boosts health care utilization 50%. This strongly suggests the first step to securing Medicare’s future is transforming the benefit structure to a one more closely aligned with private coverage.
Well, of course the senior will use more care. The closer one is to that last and terminal illness, the more medical care is consumed.
I guess I will say it since no one else will. Krugman wrong yet again! See earlier posts at this site.
That is because private insurance rations. Let Medicare say no to some procedures and it becomes even more cost effective than private insurance.
Steve
I’m a senior now. When I was younger my employer paid my insurance, but I covered my husband out of my quite low salary. It wasn’t cheap. I hardly ever used doctor help, and when I did with Humana, the response was telling me to believe the problem would eventually go away. So now I’m retired and have to pay for Medicare out of Social Security and also for a supplement, over $300 a month total. Doctors play Doctor Tennis. Same problem and they send you from one doctor to the next. Primary doctor sent me to an Orthopedic specialist who sent me to physical therapy then to an Orthopedic doctor who doesn’t deal with the spine to a doctor who deal with the spine and then to another doctor for shots in the spine which didn’t work and now to a pain management doctor who got things wrong. The problem doesn’t go away and it isn’t solved. The answer they give is that everything is specialized. Frankly I think it’s since Medicare pays so little every doctor gets a little from a lot of patients. Also they never talk about how much money is collected by the government from seniors. They always act as if seniors are getting everything free of cost.
What Medicare pays for isn’t the same as what Medicare recipients get!
With waste, fraud and abuse being a known $900 billion a year and most of that coming from Medicare and Medicaid, perhaps this makes the “statistics” just seem to make Medicare 50% higher.
CMS doesn’t know what they pay for and can’t get their new data system started in 2006 to work.
So not knowing how to stop these criminal actions, they just cut seniors benefits, and claim costs are going down.
Overall spending on Medicare was about $500 billion in 2009.
Fees paid to physicians totalled about $110 billion.
Lab tests and imaging added at least $30 billion.
It is absolutely true that the low deductibles in Medicare Plan B encourage more doctor visits. Many individuals under age 65 — who face wildly higher deductibles — postpone visiting the doctor until Medicare kicks in for them.
(I am 64 years old myself. I have had a $2,000 deductible for the last 5 years. I know whereof I speak.)
We would cut some costs in Medicare if we raised the deductible on Plan B to $1,000, $2,000, or $5,000.
Seniors would still want buy supplements to pay the difference — habits die hard –but the premiums for those supplements would skyrocket.
As a result, less wealthy seniors would drop their supplements, and would start to stay home and not visit the doctor.
If you do not see a doctor, then you will not be diagnosed with chronic conditions, you will need fewer expensive drugs, etc.
Life expectancy for seniors will start to slide back, perhaps, after growing steadily for the last 50 years.
If this is the human cost of America balancing its budget, I suppose we can live with it.
However — office visits are not the only cost driver in Medicare.
if Medicare spending on hospital care is not controlled, then we will not balance the budget at all, and all the self-rationing caused by high deductibles will be in vain.
We could also look at countries like France. Germany,
and Japan — where deductibles are very low, and doctor visits are frequent – and yet their health care budgets are in better control than ours.
How do they do it? I am not sure. I suspect that price controls on drugs and cheaper hospitals are a big reason why.
Soneone’s ox has to gored to cut the cost of Medicare. Matthews would essentially gore the non-affluent senior. I would choose to gore someone else.
Bob Hertz, The Health Care Crusade
Bob, the Health Care Crusader, is on the right track in defining the problem. I’m also an early Boomer. I too have been on high deductible plans since leaving the corporate world to start a new busines in 2005. In my case, the deductibles were running $5000/individual/year. I turn 65 in October, and I look forward to taking care of the numerous ailments I’ve been stockpiling for the past 7 years.
If someone’s ox is going to be gored, then policymakers should take a hard look at the big ox, i.e. big insurance, that has fostered the big lie about consumers needing to have “more skin in the game” in order to reduce healthcare costs. High deductible health plans are bad public policy. Consumers in the private sector cannot afford to pay $5,000 to $10,000 deductibles each year. Higher medical costs are being kicked down the road by insurers, employers and willing politicians who to go along with the big lie and pocket generous contributions from the grateful Insurance Association of America.
Thanks for the endorsement, David.
Non-group health insurance for persons over age 55 has been a crappy market for the past sixty years.
The enactment of Medicare brought some relief to those over 65.
Back when Medicare became law in the 1960’s, most workers between 55 and 65 had fairly secure jobs, and their employers or unions took care of their health insurance.
The emergence of self-employed and unemployed older workers has been growing fast for the last 20 years, and the private health insurance industry has no solutions.
Even the ACA will have deep flaws for this age group. We need to expand Medicare.
I agree, Bob. Expanding Medicare now is the only thing that makes sense for those 50+. If the Republicans win in November, the 50+ need to have a loud voice in the proposed voucher system or their fate will be in the hands of the insurance industry lobby.