Tag: "Medicare"

In Defense of the Ryan/Wyden Medicare Plan

In fact, it would be fair to say that virtually everyone who has taken a serious look at the Medicare program’s cost problems (which also date from the inception of the program) has come to the same conclusion. Instead of basing the program’s contribution to premiums on the cost of care in the traditional FFS health plan, the government contribution should be based on bids from competing health plans, including both private plans and traditional FFS Medicare. Jessica Vistnes and her colleagues at the Agency for Healthcare Research and Quality found that offering multiple health plans with a level dollar contribution to premiums minimized total healthcare costs compared to offering only one plan. Roger Feldman at the University of Minnesota recently estimated that premium support would result in immediate savings to the Medicare program of 9.5 percent of total program cost–5.6 percent more than the provisions in President Obama’s Affordable Care Act.

Source: Bryan Dowd writing in The American.

Dec 28, 2011 | 3 comments | by

Holiday Myths, and Other Links

Holiday myths. Recycled by Aaron Carroll.

The average lifetime cost of dementia per patient for Medicare is approximately $12,000 (2005 dollars) and for Medicaid about $11,000. HT: Jason Shafrin

Does mental health insurance reduce suicide? HT: Jason Shafrin.

Just how Neanderthal are you? (HT: Tyler)

Dec 27, 2011 | 5 comments | by

Hospitals with the Poorest Patients Have the Highest Readmission Rates

The analysis showed that 11.7 percent of the Most Poor Patients hospitals were ranked by Medicare as having worse readmission rates than the national average. Only 4.3 percent of the rest of the hospitals had worse-than-average readmission rates. In other words, those hospitals with the largest share of poor patients were 2.7 times as likely to have high readmission rates.

But is it because of the patients or because of the hospitals?  Source: Kaiser Health News

Dec 27, 2011 | 3 comments | by

Lie of the Year

Politifact’s  Lie of the Year 2011: “Republicans voted to end Medicare.” The perpetrators: the Democratic Party and such columnists as Paul Krugman. The judgment:

Just four days after the party-line vote [on the Paul Ryan House republican budget], the Democratic Congressional Campaign Committee released a Web ad that said seniors will have to pay $12,500 more for health care “because Republicans voted to end Medicare.”

Rep. Steve Israel of New York, head of the DCCC, appeared on cable news shows and declared that Republicans voted to “terminate Medicare.” A Web video from the Agenda Project, a liberal group, said the plan would leave the country “without Medicare” and showed a Ryan look-alike pushing an old woman in a wheelchair off a cliff. And just last month, House Minority Leader Nancy Pelosi sent a fundraising appeal that said: “House Republicans’ vote to end Medicare is a shameful act of betrayal.”

Objecting to the decision: Matt Yglesias and Ezra Klein. But did they object when Politifact declared the 2010 lie of the year was the Republican claim that ObamaCare was a “government takeover of health care”? Not that I can recall. Avik Roy provides the back story.

Dec 26, 2011 | 5 comments | by

Comparative Effectiveness is a Paper Tiger

In August 2009, results from a pair of rigorous double-blind randomized controlled trials were published and reported that vertebroplasty provided no better pain relief than a sham procedure in which needles were introduced into the back without injecting cement. More than two years after publication of the two studies, insurers’ coverage of the procedure continues unchanged. […]

…. But without action from Medicare, many private payers believed that they lacked the legitimacy to lead in adjusting coverage; “their hands were tied,” as one put it. […]

Health Affairs study here [gated, but with abstract]. HT: Austin Frakt.

Dec 23, 2011 | 4 comments | by

The Politics of Waste

The program was created by Congress in 1997, after a wave of rural hospitals closures, to make sure Americans in isolated areas would still have access to health care. Hospitals with 25 or fewer beds that are at least 35 miles away from another facility, or 15 miles across secondary roads, qualify. The Medicare Payment Advisory Commission estimates that in 2003, these hospitals were paid an average of $850,000 more than they would have been without the CAH designation.

But there was also a loophole: States could waive the distance requirement — and they did. Today more than 1,300 U.S. hospitals — nearly one in four acute care facilities – are designated as critical access.

Source: NPR’s Health Blog

Dec 20, 2011 | 3 comments | by

Medicare’s PPS Made Costs Higher, Not Lower

The Prospective Payment System (PPS) was supposed to given hospitals economic incentives to reduce costs by providing the providers with a fixed fee based on diagnosis, irrespective of actual expenses. In fact, the hospitals apparently responded by treating more marginal cases – thereby increasing costs and putting patients at greater risk. A study of CABG (coronary artery bypass graft) surgery finds that:

The increased CABG use was not cost effective – the lower bound estimate of the cost per quality-adjusted life year was over one million dollars. The average cost payments of PPS provided incentives for hospitals to expand the use of technologies that have high fixed costs; an expansion that increased health care costs with possibly little health benefits.

Study here. This comes via Arnold Kling, Tyler Cowen and Reihan Salam.

Dec 16, 2011 | 5 comments | by

Ryan and Wyden Reform Medicare

Representative Paul Ryan and Senator Ron Wyden have proposed a reform of Medicare that is similar to many other proposals that have been made of late, but with considerably more detail. They explain their plan in a Wall Street Journal editorial  and in a white paper. Austin Frakt has a summary. Avik Roy has a discussion of some of the issues as well as commentary on what other bloggers (left and right) are saying.

Basically:

  • Medicare would be redesigned: Parts A and B would be combined to produce a single plan with catastrophic coverage (no need for Medigap).
  • Seniors would be able to choose among competing private plans, just as they do today under Medicare Advantage, and the regulations would be more flexible.
  • There would be competitive bidding by the private plans.
  • The growth of Medicare (and presumably of the government’s premium support for private plans) would be restricted to real GDP growth plus 1 %.

I like this plan. It is similar to the NCPA approach. But like other eat-your-spinach reforms, this plan shifts a burden to young people without giving them new tools to be able to manage that burden. Workers need to be able to save in tax free accounts in order to replace the lower level of spending by government in future years. About 4% of payroll would do the trick.

Dec 16, 2011 | 8 comments | by

Insurers Leaving the Market

Health plans across the country are leaving the small group and individual health insurance markets, forcing people to find other sources of coverage. In this paper, we provide examples of how millions of people in dozens of states already are being negatively impacted by the law — from New York to Colorado, Virginia to Florida, and Connecticut to Indiana. The paper provides an overview of carriers leaving the market; the impact of Obama administration rules on the child-only health insurance market; the disruptions caused by rules governing health premium payouts and “grandfathering;” and the threats to the Medicare Advantage market.

Dec 12, 2011 | 9 comments | by

Reinhardt Wins Smoot-Hawley Prize

I have decided to award Uwe Reinhardt the Smoot-Hawley Prize for the Worst Economic Idea of the Year. The award is named after the cosponsors of the 1930 Smoot-Hawley Tariff Act, which many economists believe pushed the economy into the worst depression in our nation’s history.

Uwe’s idea: let the government set medical prices, essentially forcing “all payers” to pay the same price for the same service.

Aah, I can already anticipate the objections: C’mon Goodman, this idea isn’t new or original. How can it merit a prize? It’s even been done before — in health care and in other industries.

True enough. Government started setting (all payer) prices a hundred years ago — first with the railroads, then with trucking and the airlines and every other form of transportation, then with electric power … and if Franklin Roosevelt had gotten his way, we would have all-payer rate setting in every market! (See my post on “progressivism.”)

But, the prize is not given for originality. It is awarded for exceptional refusal to learn the lessons of past experience. Smoot-Hawley, after all, didn’t invent the tariff. What made the measure remarkable was that it was enacted after almost 100 years of unprecedented economic growth under an international regime of free trade.

httpv://www.youtube.com/watch?v=7mSm19ETQvg

Lessons Learned

Read More » »

Dec 12, 2011 | 29 comments | by
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