Tag: "Medicare"

What Difference Has RomneyCare Made?

Most conservative critics of the Massachusetts health reform have focused on any piece of bad news about the program they can find. After all, if this is the model for the federal legislation everyone calls “ObamaCare” it’s got to have a lot of defects. Right?

Not so fast. The real story coming out of Massachusetts is that the whole thing is a yawner. Health reform in the Bay State has been mainly about money: who writes the checks and who cashes them. That shouldn’t be a surprise. That’s usually what health reform is about. But what about the effect on patients? As it turns out, there has been very little change at all.

Does that mean that health reform at the federal level might also be benign? I wish. Unfortunately, ObamaCare introduces new and dangerous distortions that you don’t find in Massachusetts — partly because states don’t have the same powers as the federal government. More about that below.

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Jul 13, 2011 | 15 comments | by

Should Seniors be Rewarded for Choosing Lower-Cost Services?

Can Medicare save money by giving patients cash to make cost-saving decisions? This is the subject of an article from Reason.

The basic idea, dubbed cash-for-care, is as simple as a year-end performance bonus. When faced with two treatments of roughly equal efficacy but dramatically different cost, Medicare would pay patients a cash fee if they chose the less expensive option. The idea is a form of shared savings. But where most shared savings plans share exclusively with health care providers, Cash for Care shares it with patients.

Yet this should not be confused with consumer driven health care, where providers compete for cash-paying patients.

And that’s the biggest potential problem for a program like Cash for Care: It still relies on experts and administrators to make decisions about which treatments to encourage, and which ones to discourage, and how much to pay for each.

A better way would be for the doctors and hospitals themselves to figure out more efficient ways to provide care by getting a share of the savings. Providers should be able to negotiate with CMS to share in the savings if they can find efficiencies that are currently not being utilized.

Jun 28, 2011 | 5 comments | by

Is Medicare A Good Deal?

Think about everything you will pay to support Medicare: the payroll taxes while you are working, the premiums during retirement, and your share of the income taxes that subsidize the system. Then compare that to the benefits of Medicare insurance, say, from age 65 until the day you die.

Are you likely to come out ahead? That depends in part on how old you are. If you are a typical 85-year-old, for example, you can expect about $55,000 of insurance benefits over and above everything you have been paying into the system. If you’re a typical 25-year-old, however, you will pay an extra $111,000 into the system, over and above any benefits you can expect to receive.

By the way, this is not the sort of calculations you want to try at home on a pocket calculator. It’s too complicated. Fortunately the heavy lifting has already been done by Andrew Rettenmaier and Courtney Collins in a report for the National Center for Policy Analysis. See the table.

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Jun 27, 2011 | 38 comments | by

1983 Reform: Social Security Benefits Were Cut by 19 Percent

This is according to a report by AEI scholar, Andrew Biggs, who adds:

  • First, the 1983 reforms didn’t only reduce benefits; they also increased taxes, by covering newly hired federal workers and non-profit associations, accelerating tax increases already on the books, prohibiting state/local workers from leaving the system, and so on.
  • Second, while benefits in any given month will be lower in the future than they would have been under 1983 rules, that doesn’t mean they’d be lower in real terms.
  • Third, future retirees will live longer than those in the past did, so while they may receive somewhat lower replacement rates than in the past, they’ll collect them over longer retirements.
Jun 24, 2011 | 5 comments | by

Capretta Responds to Ezra On Ryan Care

[W]hen Rep. Paul Ryan proposed a broader reform of Medicare that is modeled on the Part D success story … Washington Post blogger Ezra Klein … argued: (a) that spending on prescription drugs throughout the health-care system (that is, not just in Medicare) is also far below previous expectations, which proves that Part D’s market-based design had nothing to do with costs’ coming in under budget; (b) that, regardless of what has happened to date, future Part D spending is expected to rise rapidly, thus undermining claims of cost discipline; and (c) that Part D premiums are 57 percent higher in 2011 than in 2006.

Unfortunately for Klein, each of these criticisms is easily dismissed.

See full James Capretta piece.

Jun 22, 2011 | 5 comments | by

Why Are More Than 35 Percent Swedes On Disability?

The proportion of men collecting disability benefits at older ages varies greatly across countries — for example, more than 35 percent of 64-year-old men in Sweden and more than 25 percent of those in the Netherlands are on DI, versus 10 percent or less in Belgium, Italy, and Spain. Does this reflect differences in the underlying health status of older individuals in these countries? Or do differences in the provisions of the DI systems explain this variation in DI take-up rates?

What do you think? Study here. HT to Jason Shafrin.

Jun 21, 2011 | 7 comments | by

Gaming Medicare

Performing two scans in succession is rarely necessary, radiologists say, yet some hospitals were doing that more than 80 percent of the time for their Medicare chest patients, according to Medicare outpatient claims from 2008, the most recent year available. The rate is typically less than 1 percent, or in some cases zero, at major university teaching hospitals.

Full article on hospitals administering double scans to Medicare patients.

Jun 21, 2011 | 9 comments | by

Path Dependency in Health Reform: The Case of Medicare

I think I first learned about path dependency when studying physics — but it surely applies to public policy, too. Despite the scholarly disputations about health reform, what drives most voters are not questions about the solvency of Medicare or beneficiaries’ access to care, but fear of change. Arguments will not change this fact: People change when the pain of not changing becomes greater than the pain of changing, but not before.

This can be the only explanation for the majority of respondents to polls (described here) which ask the foolish question whether “Medicare should remain as it is today” versus Paul Ryan’s proposed reform. Surely the majority, which prefers that Medicare not change, are waxing nostalgic for Medicare as it existed prior to the slashing and burning of the March 2009 Patient Protection and Affordable Care Act (ObamaCare), the consequences of which they have not yet experienced.

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Jun 17, 2011 | 6 comments | by

Krugman Gets it Wrong Again

In his New York Times column, Nobel Laureate Paul Krugman condemned the idea of vouchers for Medicare enrollees to purchase private insurance, arguing Medicare is more efficient than private insurance. As evidence he cites a graph showing insurance premiums rising faster than Medicare spending per enrollee. However, insurance premiums don’t tell the whole story. Out-of-pocket health care spending has fallen over the years from about 50% in 1960 to only 11% today. The more medical services an insurance policy covers, the higher the premiums. The Congressional Budget Office has calculated excess cost growth in health care spending after accounting for GDP growth, changes in demographics and the age distribution and other factors. The CBO found that the excess cost growth in Medicare spending from 1975 to 2008 was 2.5 percentage points, on average, each year. Over the same period, the excess cost growth in Medicaid spending was 2 percentage points while the excess cost growth in all other medical spending was 1.8 percentage points.

Jun 13, 2011 | 33 comments | by

Two Approaches to Controlling Drug Costs

The Medicaid Drug Rebate Program has been around for 20 years.  It requires drug manufacturers to rebate to the states about 15 percent of the amount the state pays for brand name prescription drugs, or 11 percent for generics….

Has the Medicaid drug rebate system controlled prescription drug spending?  [A]bsolutely not.  In a 2009 study in the journal Risk Management and Insurance Review entitled “Do State Cost Control Policies Reduce Medicaid Prescription Drug Spending,” the authors assert: “Spending on prescription drugs has been the fastest growing expense category in Medicaid in recent years, with expenses growing on average over 16 percent per year between 2000 and 2004.”  The Congressional Research Service reported in 2008, “The average annual growth in drug spending under Medicaid over the 15-year period from 1990 to 2005 was about 13.1 percent per year.”

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Jun 13, 2011 | 3 comments | by
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