Tag: "Medicare"

Reforming Medicare the Right Way

With all of the heated rhetoric coming from Washington these days you would think there is a huge difference in the way Republicans and Democrats want to reform Medicare.

But did you know that over the next decade there is no difference at all between the agendas of the two parties? Although the House Republicans voted to repeal ObamaCare they did not vote to repeal the cuts in Medicare spending intended to pay for ObamaCare. So for the next ten years, there’s not a dime’s worth of difference between the two parties, to quote an all but forgotten political refrain.

Even more surprising, there is no difference between what the House Republican budget proposes and what Democrats voted for in last year’s health reform bill for anyone over the age of 55. It’s only young people who have a real stake in this fight. But as former Medicare Trustee Thomas Saving and I reported in The Wall Street Journal the other day, the cuts the two parties are proposing are so draconian, that there is little chance they will ever see the light of day.

In a way, that’s bad news. Absent politically unsustainable spending cuts, Medicare’s unfunded liability is almost $90 trillion at today’s prices, looking indefinitely into the future. That’s about six times the size of the entire U.S. economy. And Medicare spending is growing at twice the rate of growth of our national income. Clearly that cannot go on forever.

So what can be done? Fortunately, there are three common sense steps we can take that will give us substantial reform with a minimum of pain.

There is no sickness or toil or danger
In that bright land to which I go.

Read More » »

Jun 13, 2011 | 15 comments | by

Squandering Medicare’s Money

Medicare spends a fortune each year on procedures that have no proven benefit and should not be covered. According to Rita F. Redberg, writing in The New York Times, examples abound:

  • Medicare pays for routine screening colonoscopies in patients over 75 even though the United States Preventive Services Task Force … advises against them (and against any colonoscopies for patients over 85). In 2009, Medicare paid doctors more than $100 million for nearly 550,000 screening colonoscopies; around 40 percent were for patients over 75.
  • The task force recommends against screening for prostate cancer in men 75 and older, and screening for cervical cancer in women 65 and older who have had a previous normal Pap smear, but Medicare spent more than $50 million in 2008 on such screenings.
  • Two recent randomized trials found that patients receiving two popular procedures for vertebral fractures, kyphoplasty and vertebroplasty, experienced no more relief than those receiving a sham procedure … Nevertheless, Medicare pays for 100,000 of these procedures a year, at a cost of around $1 billion.
  • Multiple clinical trials have shown that cardiac stents are no more effective than drugs or lifestyle changes in preventing heart attacks or death. Yet one study estimated that Medicare spends $1.6 billion on drug-coated stents … annually.
  • A recent study found that one-fifth of all implantable cardiac defibrillators were placed in patients who, according to clinical guidelines, will not benefit from them. But Medicare pays for them anyway, at a cost of $50,000 to $100,000 per device implantation.
Jun 09, 2011 | 4 comments | by

What ObamaCare Means for Seniors

While charges and counter-charges about Medicare are flying back and forth in Washington, hardly anyone seems to have noticed that Medicare’s financial problems have already been solved. They were solved by the health reform bill enacted last year, what some people call ObamaCare.

So why isn’t this front page news? Why aren’t people dancing in the street? Why isn’t the Obama administration boasting about this accomplishment far and wide? Probably because Medicare’s financial problems are slated to be solved by the unconscionable rationing of health care for the elderly and the disabled.

The most recent Medicare Trustees report conveys the same message as the last one: On the day that Barack Obama signed the health reform bill, Medicare’s long-term unfunded liability fell by $53 trillion. That sum is about three times the size of the entire US economy. And, it gets better. Once the baby boomers work their way through the system, Medicare spending will grow no faster than the payroll taxes, premiums and general revenue transfers that pay for that spending.

So what does this mean for senior citizens who rely on Medicare? No one knows for sure. But it almost certainly means they will get less health care.

Don’t Stop Thinking About Tomorrow

Read More » »

Jun 08, 2011 | 19 comments | by

Will the Affordable Care Act Cause Seniors to Die Early?

A recent paper by Vivian Wu and Yu-Chu Shen studied the effect of Medicare funding cuts on hospital mortality as a result of the Balanced Budget Act of 1997. They concluded that mortality rates increased at hospitals that suffered the largest Medicare funding, causing reductions in staffing and adoption of other cost-cutting measures. Wu and Shen found a 1% reduction in hospital payments increased mortality by about 0.4%.

How many seniors might die as a result of Medicare cuts required by the ACA? Calculations are back-of-the-envelope at best. About 5% of Medicare enrollees die in any given year. Multiplying the percentage reduction in projected Medicare payments and extrapolating the proportion of Medicare enrollees who die annually suggests a total of 6,300 additional deaths among the Medicare population from 2011 through 2019.

This is not farfetched — numerous studies have found Medicare regions with higher-spending have better outcomes than lower spending regions. For instance, a study [gated, but with abstract] by George Mason professor Jack Hadley and Urban Institute scholars found:

On average, greater medical spending is associated with better health status of Medicare beneficiaries, implying that across-the-board reductions in Medicare spending may result in poorer health for some beneficiaries.

Hadley and his co-authors found 10 percent greater medical spending over a three year period is associated with 1.5 percent greater odds of survival.

Jun 06, 2011 | 5 comments | by

Cookbook Medicine

Would you like the government to tell your doctor how to take care of you? That possibility is not as remote as you may think.

Medicare recently announced it will start paying more to hospitals that follow a dozen procedures, including administering antibiotics prior to surgery and anti-clotting medication to heart attack patients. It will pay less to hospitals that don’t comply. The same thing is about to happen to doctors. Those who comply on up to 194 different metrics— including adopting electronic medical records — will get higher fees. Those who resist will get lower ones.

These are examples of a much larger trend: Washington telling the medical community how to practice medicine. Even though a recent study finds little relationship between the inputs Medicare wants to pay for and such outputs as patient survival, and even though the latest pilot programs show that paying doctors and hospitals for performance doesn’t improve the quality, we are about to usher in the era of big brother medical care.

Remember these words: “evidence-based care.” They are likely to be very much a part of your future.

To its advocates, evidence-based care follows medical treatment guidelines and protocols developed by experts, based on the scientific literature — as reported in medical journals and scholarly reports. If all doctors follow the same protocols, they argue, patients with similar conditions will be treated the same way. Wide variations in the practice of medicine would be replaced by uniform, standardized treatments. This view is about to dominate the entire health care system.

If you are elderly or disabled, Medicare will probably refuse to pay for any procedures that aren’t evidence-based. If you get health insurance at work, your employer will probably do the same. If you buy your own insurance, you won’t have much choice about the matter. The only health insurers that will be allowed in the new (ObamaCare) health insurance exchanges — certainly the only ones that survive — will be those that limit coverage to evidence-based care.

Before long, virtually all doctors will be practicing only the kind of medicine the health plans cover. After all, most doctors like to get paid for what they do. If that’s not incentive enough, the Obama administration has a medical malpractice carrot and stick it wants to try out. If doctors follow protocols and guidelines developed by committees of experts, they will be immune from lawsuits. If they don’t, they will have to take their chances.

So what’s wrong with that? Don’t you want your doctor’s advice to be based on scientific evidence? Don’t you want her to follow guidelines that have been written by reputable scholars who have surveyed all the relevant literature?

So what’s not to like? A lot, it turns out.

 

Don’t you think maybe

We could find us a

Brand new recipe?

 

Read More » »

Jun 06, 2011 | 30 comments | by

What They Hoped You Didn’t Notice

Chris Jacobs has dug these nuggets out of the latest Medicare Trustees Report:

  • Medicare’s cash flow deficit of more than $32 billion is the largest ever, both in absolute dollar terms and in percentage of taxable payroll.
  • The health care law’s “high-income” tax is NOT intended for inflation. Last year’s report found that the “high-income” tax will affect only 3 percent of taxpayers in 2013 (when it takes effect), but a whopping 79 percent of taxpayers by 2080.
  • Enrollment in employer-sponsored retiree drug plans will drop from 6.8 million last year to a mere 800,000 by 2016 – a drop of nearly 90%.
  • Millions of seniors will lose their current Medicare Advantage plans.  However, thanks to the recent waiver announced by the Administration, enrollment in Medicare Advantage will not begin falling until 2013 – i.e., after the President has completed his re-election campaign.
  • Most seniors’ Social Security COLAs in 2012 are projected to be entirely consumed by the rise in Medicare Part B premiums.
May 26, 2011 | 7 comments | by

Making the Purple Health Plan More Purple

Larry Kotlikoff has proposed a Purple Health Plan (part red, part blue) that has been endorsed already by several hundred economists. Since Larry has attributed to me the idea of a government-subsidized health care voucher, I should have commented on this way before now. Here is the proposal, as summarized by Jason Shafrin of Healthcare Economist:

  • All Americans receive a voucher each year to purchase a standard plan from the private-plan provider of their choice.
  • Vouchers are individually risk-adjusted; those with higher expected health care costs, based on documented medical conditions, receive larger vouchers.
  • Participating insurance companies providing standard plans cannot deny coverage. Americans choose doctors and hospitals included in the standard plan they choose.
  • Plan providers offer supplemental plans to their participants and cannot deny supplemental insurance coverage to their participants.
  • The government (federal and state) ends the tax exclusion of employer-provided health insurance premiums.
  • Like all other Americans, Medicare, Medicaid and health exchange participants are covered by the Purple Health Plan, subject to appropriate transition provisions.
  • Each year a panel of doctors sets the coverage of the standard plan subject to a strict budget, namely that the total cost to the government of the vouchers cannot exceed 10 percent of GDP.

There are two things I would definitely change: The content of health plans and the risk adjustment amounts should be determined by the market, not by government. In addition, there are a few more features I would add, or least make more explicit. Details are below the fold.

Purple Rain

Read More » »

May 25, 2011 | 15 comments | by

Medicare Actuary: Obama Medicare Cuts Will Deny the Elderly Access to Care

For the second year in a row the CMS Office of the Actuary has released a dissenting analysis (to the Medicare Trustees’ report) of how the Affordable Care Act (ObamaCare) affects Medicare:

One of the most important factors in projecting Medicare expenditures are the annual payment updates to Medicare providers. The estimates shown in the 2011 Trustees Report are complicated substantially by mandated reductions in these payment updates for most Medicare services…..  It is reasonable to expect that Congress would find it necessary to legislatively override or otherwise modify the reductions in the future to ensure that Medicare beneficiaries continue to have access to health care services.

Here is Chris Jacob’s summary:

The report estimates that, if the productivity adjustments were to remain in effect, by 2085 “Medicare and Medicaid payment rates for inpatient hospital services would both represent roughly 33 percent of the average level for private health insurance.”  The report reiterates the actuary’s projection from last year that the productivity adjustments could cause approximately 40 percent of providers to become unprofitable by 2050.  Likewise, if the SGR reductions remain in effect, “Medicare [payment] rates would eventually fall to 27 percent of private health insurance levels by 2085 and to less than half of projected Medicaid rates.”  It’s also worth noting that all of the economists with whom the actuary’s office discussed these provisions “believed that the payment reductions were unsustainable,” including liberal economists like David Cutler, who served as an unpaid advisor to Barack Obama’s presidential campaign.

May 23, 2011 | 6 comments | by

1 in 4 Nursing Home Employees Has No Health Insurance, and Other Links

One in four nursing home employees and one in three home health care workers has no health insurance. Reason: Medicare and Medicaid pay too little.

Is there a cruelty gene? Maybe. “In most cruel people…the ’empathy circuit,’ which runs through 10 different regions of the brain, goes down either temporarily or permanently, leaving the person with ‘zero empathy.'”

Great article on Dr. Bob [pictured below, center]. He often comments at this blog.

Photo credit: Lara Solt/Dallas Morning News

May 17, 2011 | 11 comments | by

Mission Impossible: ObamaCare’s Planned Cuts in Medicare Spending

Before Congress passed a law  nationalizing the health care system, President Obama used to say that the government would save money by implementing the principle that if the “red pill” works just as well as the “blue pill,” but costs half as much, patients should take the red pill.

This dangerously simplistic notion is incorporated in the Independent Payment Advisory Board (IPAB), a creation of the Patient Protection and Affordable Care Act (PPACA). IPAB, governed by a 15-person board of presidential appointees, targets certain Medicare spending, and attempts to take it away from congressional oversight. As stated by an advocate: “A common theme in the health care reform debate in recent years has been the need for a board of impartial experts to oversee the health care system. . . Congress is too driven by special-interest politics and too limited in expertise and vision to control costs.” Much of the section of PPACA that institutes IPAB describes the byzantine rules and procedures that try to limit Congress’ ability to derail IPAB’s recommendations.

Read More » »

May 17, 2011 | 4 comments | by
« Previous Page — Next Page »