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.

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