Tag: "Medicare"

Repeal and Replace

On this first anniversary of the president signing the health reform bill into law, Investor’s Business Daily features an editorial I wrote with Newt Gingrich and Jim C. Capretta. It reflects our one-year assessment of ObamaCare that we presented to the National Press Club last week:

  • Ever-More-Costly Mandate: ObamaCare will force Americans to buy insurance whose premiums will rise at twice the rate of their incomes.
  • Bizarre System of Subsidies: Depending on where insurance is bought, the subsidies for individuals are radically different, a cost factor so large it will force a major reorganization of American business.
  • Perverse Incentives for Insurers: Health plans will try to attract the healthy and avoid the sick; and after enrollment, they will over-provide to the healthy and under-provide to the sick.
  • Perverse Incentives for People Buying Insurance: With small (and maybe unenforced fines), people will have an incentive to wait until they are sick to buy insurance, and then drop coverage after their medical bills are paid.
  • Tattered Safety Net: With 32 million newly insured and more generous coverage for almost everyone else, there will be a huge increase in the demand for care; but the legislation has no provisions to increase supply. The result: increased waiting times at the emergency rooms and in doctors’ offices — with those whose plans pay below market being pushed to the rear of the waiting lines.
  • Benefits Cuts for Seniors: Deep Medicare cuts will make it increasingly hard for seniors to find doctors to treat them and facilities who will admit them.

These problems and the recommended solutions build on a continuing consensus among critics about what the problems are and how to solve them — beginning with an editorial Newt and I wrote for The Wall Street Journal last year and a Capitol Hill think tank briefing in January with the Heritage Foundation, the American Enterprise Institute, the Cato Institute and the American Action Forum — featuring this summary document.

Mar 23, 2011 | 7 comments | by

Prices Matter

What happens when we pay too little? Ask anyone covered by Medicaid—whose payment rates have historically been well below Medicare and private insurers—how easy it is for them to find a regular source of care other than the local hospital’s emergency department. A similar dynamic helps explain…the difficulties that some Medicare beneficiaries are experiencing in securing access—including the recent announcement by the American Medical Association that there are 22 “patient access hot spots” where access to care for Medicare patients “is already at risk.”

What happens when we pay too much? Inefficient unbundling and re-bundling of the delivery system as providers maneuver to capture the “excess” revenue. It is no accident that we have seen the emergence of physician-owned cardiac and orthopedic specialty hospitals, but no similar physician-owned hospitals for the treatment of trauma, burn care, or AIDS.

Full report by David A. Hyman (Cato Institute) here.

Mar 21, 2011 | 4 comments | by

Why You Won’t Be Able to Get the Drug You Need, Part II

This is Scott Gottlieb again on medical innovation. See previous post:

When CMS has been given discretion to set coverage policies and payment rates, it has often been preoccupied with cost over clinical benefit. Take the agency’s tortured decisions around the use of implantable defibrillators that shock stopped hearts to prevent sudden death. Medicare sharply restricted use of them in the 1990s. But mounting research proved that the devices, which cost $30,000, could be saving many more lives. So in 2003 Medicare adopted a novel theory to expand coverage to some, but not everyone who needed one. The agency said that only patients with certain measures on their electrocardiograms (called wide QRS) seemed to benefit. It was an easily measurable but ultimately imprecise way to allocate the devices. After another major study firmly debunked the QRS theory, Medicare expanded coverage again in 2005, potentially saving 2,500 additional lives, according to its press release issued with that decision. That experience wasn’t unique. From 1997 to 2007 Medicare denied access to a third of the treatments it evaluated through its coverage process, taking an average of eight months to complete reviews. When coverage was granted, in 85 percent of cases the treatments were restricted, usually to patients with more advanced illnesses.

Mar 21, 2011 | 3 comments | by

Do You Think You Could Successfully Steal $4 Million from American Express Over a Year-and-a-Half?

How about Mastercard or Visa? Well, Medicare is apparently an easier mark:

Caridad Guilarte, 54, and Clara Guilarte, 56, were on a most-wanted list on the website of the U.S. Department of Health and Human Services, which runs Medicare.

The sisters are charged with collecting more than $4 million from Medicare for drug therapies that were unnecessary or not performed at a clinic in Dearborn over an 18-month period.

Mar 18, 2011 | 15 comments | by

Why You Won’t Be Able to Get the Drug You Need

Unless you can pay for it yourself. This is from Scott Gottlieb’s new book chapter on medical innovation:

Many of the authorities that CMS acquires [under ObamaCare] will flow from the newly created Independent Payment Advisory Board (IPAB), which has the mandate to cut Medicare outlays by $4 billion a year by capping the program’s rate of growth. The goal is to keep Medicare’s spending growth in line with the overall rate of economic inflation…

IPAB is likely to confer on CMS authority to engage in some tacit forms of reference pricing—fixing reimbursement rates on new products to those paid on similar, but older, and more cheaply priced drugs. One way is by giving CMS the authority to pay only for the “least costly alternative” (LCA) medical product within a broad class of competing treatments. Patients choosing a more costly treatment will have to pay the difference themselves.

The entire chapter is worth reading. See our previous post on how this works in Britain.

Mar 18, 2011 | 10 comments | by

Headlines I Wish I Hadn’t Seen

Government Entitlement Programs Amount to Over One-Third of Total Wages.

Medicare Illegally Paid for Seniors’ Viagra.

Robots are winning big at major online poker sites.

White House refuses to release records on how ObamaCare came to be.

How Safety Net Hospitals survive in NYC: Millions in bribes to legislators.

78 per cent of kids sleep through home smoke alarms.

Mar 16, 2011 | 6 comments | by

Quote of the Day

“I would like to stand on the highest mountain in Montana, and shout price-by-price, rip-off by rip-off, the shenanigans here showing how much more the American consumer is paying.”

—  Montana Gov. Brian Schweitzer, referring to a 112-page spreadsheet detailing the federal discounts allowed for more than 5,000 drugs.

Mar 14, 2011 | 4 comments | by

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.

Mar 11, 2011 | 6 comments | by

David Broder, RIP

This is from a column he wrote on the Senate version of ObamaCare:

Nine of 10 Republicans and eight of 10 independents said that whatever passes will add to the torrent of red ink. By a margin of four to three, even Democrats agreed this is likely. That fear contributed directly to the fact that, by a 16-point margin, the majority in this poll said they oppose the legislation moving through Congress.… Every expert I have talked to says that the public has it right. These bills, as they stand, are budget-busters.

Mar 10, 2011 | 3 comments | by

Headlines I Wish I Hadn’t Seen

“Medicare Fraud Is Incredibly Easy.”

More than 90 percent of nursing homes employ one or more people who have been convicted of at least one crime.

Largest one-year jump in health spending as a fraction of national income in history.

Mar 08, 2011 | 4 comments | by
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