Medicare and Medicaid
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Many Roads to Divide and Conquer Healthcare
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6 Treats in the New House Health Care Bill
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8 Things You Need to Know About the New House Health Reform Bill
Meet Medicare Part E
Published October 23, 2009 @ 06:00AM PT
How much time-consuming bluster did it take to get to this simple and obvious option? Open up Medicare to everybody, like Ted Kennedy originally proposed in the Senate HELP bill. Part E does stand for “Everybody.” While it’s only one of the three public options being considered by the House, it’s the strongest. Keith Olbermann gives us a great introduction to the concept in the video clip above. Meet Medicare Part E.
"Doc Fix" Shows (AGAIN) Why the House's Health Reform Bill Is Better Than the Senate's
Published October 21, 2009 @ 11:03AM PT
The last House committee to work on comprehensive health reform finished at the end of July. The last Senate committee (Sen. Max Baucus's Senate Finance Committee) finished last week. But the House has not been idle. News comes today that an initial score from the Congressional Budget Office says the House has refined its bill to only cost $871 billion over 10 years. Of course that is likely to get overshadowed by the train wreck in the Senate concerning Medicare's "Doc Fix." So many commentators are focused on the political clumsiness of pushing a separate bill in the Senate to fix the Medicare Sustainable Growth Rate (SGR) that they may miss what this Three Stooges-esque vignette tells us about the policy strength of these House and Senate bills.
Simply put, the House has its act together. The Senate's got a lot of work to do.
The SGR was an attempt to curb skyrocketing costs in Medicare which has not only failed, it's become the second-worst accounting trick in the federal budget over the past decade (the worst being leaving the costs of the wars in Iraq and Afghanistan out of the budget every year of the Bush Administration so the deficit wouldn't look so big.) A brainchild of the Gingrich Congress and an amendment to the 1997 Balanced Budget Act, the SGR is a formula intended to prevent physician compensation for Medicare from rising above the rate of growth in GDP each year. If physician fees were threatening to go higher, all doctors' fees across the board in Medicare would be cut to keep them within that limit. Not inherently a bad idea, but it has a huge flaw -- in most years, medical costs rise at several times the rate of growth in GDP whether you're talking public coverage or private insurance. The net result is that SGR would guarantee a major cut to Medicare nearly every year, at least until we get an explosive economic growth like we had in the 1990s. And we're not talking obvious waste like Medicare Advantage subsidies for HMOs or those motorized scooters you see in ads on cable TV -- we're talking doctors' fees. You know, the whole point of having health coverage.
So every year, Congress passes a one-year moratorium on the SGR. Every year, all Democrats in the Senate vote for it. Every year, almost all Republicans vote against the moratorium and for the cuts to take place (including every single one of the conservatives who are making "how dare we cut Medicare in any way, shape or form!" their rallying cry for defeating reform. Gotta love that blatant disregard for consistency.) Every year, doctors' fees in Medicare continue to rise at roughly the same "way, way over inflation" rate they do for private insurance, meaning if the cuts took place this year, it'd yield a 21% cut across the board. But every year, the cut never actually happens. It's like a bad sitcom whose punchline you can see coming from miles away. It's absurd. And it needs to be fixed.
Enter health care reform -- an obvious spot to fix it.
Faulty Math in CBO Senate Healthcare Bill Analysis
Published October 08, 2009 @ 06:00AM PT
Well, the CBO definitely got one thing right in its financial analysis of the Senate Finance Committee’s health bill. In commenting on Kent Conrad’s nonprofit co-op idea, it wrote that they "seem unlikely to establish a significant medical presence in many areas of the country." I already shared my opinion on co-ops as destined-to-fail recycling attempts.
Other than that, though, here is their 10 year breakdown of the bill:
- Cost: $829 billion
- Benefit: $81 billion in reduced federal deficits
- Coverage: Increase from 83% to 94% of Americans
- Uninsured Reduction: 29 million
- Missing: $200 billion in Medicare physician payment increases
- Risk: 15% low-income subsidy cuts to abide by Obama’s budget-neutral failsafe mechanism
The SFC bill’s lower cost sent House Democrats scrambling to reduce HR 3200’s cost under the $900 billion limit set by the president, even though their plan would cover 8 million more people than the SFC’s. Part of their strategy may be to move 7 million low-income individuals onto Medicaid instead of providing subsidies for private insurance.
Which brings me to my point. They realized something most of us haven’t. Much of the budgeting exercise has been based on faulty math because the largest cost factor is an unknown – private insurance costs. Higher education provides a useful, though painfully similar, example.
Whistleblowers Expose Hospitals Fleecing the Public's Back
Published October 07, 2009 @ 09:00AM PT
What happens when two whistleblowers separately expose widespread Medicare fraud to authorities? Other than nearly $90 million in fines, one wrongdoer loudly protests that she just lacked supporting documentation for the fraud.
Such is life in the case of medical device maker Medtronic Spine LLC and its hospital customers. After two former employees alerted the Justice Department of a scheme that ran from 2002-2008, Medtronic’s acquisition of Kyphon Inc. came back to haunt it with a $75 million fine. Kyphon made equipment and materials used to perform kyphoplasty. It promoted the procedure as a hospital money-maker if clients billed Medicare for inpatient rather than outpatient surgery.
Yes, in a cringe-worthy twist, hospitals were making decisions on inpatient versus outpatient status based on financial gain, not medical necessity. Just not according to Pamela Jones, St. Francis Hospitals’ chief legal eagle: "It is important to note that the probe had nothing to do with quality of care, patient safety or medical necessity ... the issue is that the documentation did not support the inpatient stay." Well Pamela, as for medical necessity, receipt of the lawsuit’s largest hospital fine for fraud ($3,158,629) would suggest otherwise. And I would hope St. Francis wasn’t jeopardizing patient safety and providing low-quality care while fleecing the public.
The Cost of a Health Reform Fail
Published September 30, 2009 @ 06:48PM PT
Robert Wood Johnson Foundation and the Urban Institute today gave us a peek at what lies ahead for the U.S. if we don’t complete the job on health care reform. What does the future hold if we continue to face costs that rise at three times the rate of inflation, and the subsequently depressed wages and increased number of employers dropping coverage or shifting the costs to individuals and families? From 1999-2009, the number of uninsured rose 10 million -- even with an increase in public coverage through SCHIP, Medicaid and Medicare. What will that number be in 2019? What will that do to state budgets? To the federal budget? How will we manage to pay the cost of failure?
To see what trajectory we’re on, you only need to look at where we’ve been. Health care costs have risen an average of 9% for private insurance each year since 1970 (for Medicare, it’s 8%). More and more employers are dropping coverage altogether, or substantially decreasing their contributions. The number for the uninsured, for uncompensated care, for those on public programs will continue to go up -- as will medical debt-related bankruptcies. The trendlines are long-term and irrefutable. So Urban Institute plugged the numbers into their Health Insurance Policy Simulation Model and projected a number of scenarios for each state and the District of Columbia. They presented two scenarios: one where the recession is prolonged, health care costs continue accelerating, and income growth is about the same; and another where we rebound to almost full employment, income growth is brisk, and health care costs don’t accelerate the way they have the past several years.
But even the best-case scenario numbers ain’t that rosy.
It’s the fulfillment of all the anti-reform slogans you’ve ever heard. If you think reform will take away your choices, imagine an America where 57.0-65.7 million have no choices because they're uninsured. If you think reform means losing what you have in terms of coverage, imagine being one of the 20 million Americans who will lose their employer-sponsored insurance by 2019. The why is obvious -- employer costs for health care would more than double in 27 states in the worst-case scenario. That enrollment in government-funded Medicaid and CHIP programs for lower-income Americans will also increase. If hospitals are complaining about a hypothetical public option based on Medicare rates (the versions of the public option in the bills now would not use Medicare rates), then imagine how happy they’ll be with increases in uncompensated care rise from 72-128%.
You may be OK with an increase in the uninsured, and working families and businesses continuing to see more of their budget eaten up by health care costs. But, as the report concludes, “[Uncompensated care] together with the increased spending for Medicaid and CHIP, this would inevitably mean higher taxes even without reform.” Even if we miraculously avoid a tax increase at the federal level through clever accounting or spending cuts, the state tax piper for Medicaid and CHIP must be paid.
So you can continue telling me that we can’t afford health reform. But for me to take you seriously, you’re going to have to show me how we can afford a health reform epic fail.
(Photo credit: http://www.flickr.com/photos/southpaw2305/ / CC BY 2.0)
Getting Medicare and Health Reform Backwards
Published September 28, 2009 @ 08:03PM PT
I’ve noticed that many opposing health care reform -- many of them Republicans -- have started using “don’t let them cut any money from Medicare under any circumstances” as their favorite argument. But the “Bizarro world” quality of seeing the minority party so defensive over a program that they have long sought to prevent outright, cut or entirely replace or privatize doesn’t just stop with the applause line. A lot of the arguments they’re using have a similar “up is down” quality.
Take John Goodman’s blog today (the conservative economist, not the guy in The Big Lebowski) devotes a post to perverse incentives waiting for our medical system if reform passes. “At the risk of oversimplification,” he lays out a vision of perverse incentives for physicians if reform is passed. With government setting fee-for-service rates for all medical procedures, doctors have the incentive to do more services. But then if Medicare growth exceeds a certain limit, the federal government “will impose an across-the-board percentage reduction in all doctor fees.” The behavioral anarchy is shocking to Goodman. Each individual doctor has a miniscule ability to affect Medicare growth, and so will continue following his or her natural instinct to do more services -- even though in aggregate, that will cause the across-the-board cut to trigger. Paradoxically, this cruel blind injustice will just make it more likely that more doctors will do more services. More care means more wasteful care, and it perpetuates the situation it was designed to curtail.
Yes, that sounds massively inefficient.
However, Goodman has described a problem that exists now, not a projected future. The exact adjustment he describes was strongly advanced by the Gingrich Congress of the late 1990s -- called the Sustainable Growth Rate, it cuts doctors rates across-the-board by an arbitrary rate if aggregate Medicare growth crosses a certain threshold. It does, indeed, create that system where doctors are powerless to fix the situation but incentivized to perpetuate it. In fact, it creates a situation that is slightly worse -- the cut has never materialized. Every year, Congress passes a law at the last second to put a one-year postponement on the cut. So all the fear and perverse incentives to waste more Medicare dollars are there, but Medicare spending is never, ever reduced. Curiously, the legislators most inclined to believe Goodman’s economic theories are the ones who have consistently voted against delaying or removing the SGR cut -- including last year where a newly-diagnosed Ted Kennedy needed to walk onto the Senate floor to break a Republican filibuster that would have let the cut take place.
But here’s the kicker -- fixing the SGR is one of the main adjustments to Medicare in the House bill. Goodman’s projected inefficiency isn’t what happens when health reform passes -- it’s what health reform would prevent.
I suppose I shouldn’t be surprised that Goodman’s offered solution -- “Services provided over three visits, for example, might be provided with one visit plus a phone call or two, or one visit plus an e-mail exchange -- provided that the government pays more for the one visit” -- exactly describes the medical home model of care, a better, higher quality and more cost-effective model of delivering care which the proposals in Congress, in fact, double down on in terms of investments. After all, when it comes to arguments against health reform these days, up is down, and black is white.
(Photo credit: http://www.flickr.com/photos/sico_activa/ / CC BY 2.0)
"I Think Your Mom Probably Did": The Best of the Weekend
Published September 27, 2009 @ 10:46PM PT
Every weekend, I share my three favorite videos or stories that helped enhance my own understanding of the health care debate. In Washington, the focus is almost entirely on the machinations of the Senate Finance Committee, the House’s preparations for a full floor debate, and the looming question of what package can or will survive in the Senate. But with such a focus on the politics, there’s not quite enough on the policy. Luckily, the first two articles helped me fill in the gaps.
1.) Kaiser Health News, “Canadian Doctor: Dutch Health Care System Could Work In U.S.”
Dr. Robert Ouellet, until recently the president of the Canadian Medical Association, was also recently on a fact-finding mission to several European countries to assist the Canadian government in finding ways to improve their own universal health care system. This interview really has it all – musings on where the American health care system needs to go, comparisons to the Netherlands and several other countries, and myth-busting about the much-maligned Canadian system.
As mentioned before, those looking to blacken the name of Canadian medicine need to spend more time talking to Canadian doctors.
Q: In the United States, we’ve heard a lot of negative things said about the Canadian health care system. How do you respond?
A: First, people are not dying on the streets in Canada. I think there is a lot of exaggeration in what we have seen in the ads in the United States about the Canadian system. We have a problem of access and we want to fix that, that's for sure. We're not denying patients care because they don't have money. We have good quality. Many doctors, I am one of them, went to the United States for training. So it's not fair to say our system is so bad. That's not true.
Q: Would the United States be well-advised to adopt some of the Canadian ways of doing health care?
A: I think so. The most important thing for us is to keep our system universal. If it is one value that you want to import, that's fine. But it doesn't mean you need to import all [of our system] because it won't work in the States. And it's the same for us. You have good things in your system. But we don't want to have your system here in Canada. This is why we went to some European countries, to look at something different. And the first value we were looking for is universal access.
Read the whole interview at Kaiser Health News.
2.) The New York Times, “Medicare Scare-Mongering”
If we’re having a health care debate, then it must be time for someone somewhere to be darkly warning that Medicare is about to face massive debilitating cuts! If I was a senior citizen, I'd be ticked that my presumed gullibility had become such a political target. As this New York Times editorial illustrates, the reality is that a major goal of health care reform is to strengthen the Medicare program to increase its solvency and quality.
What the Republicans aren’t saying -- and what the Democrats clearly aren’t saying enough -- is that in important ways, coverage for a vast majority of Medicare recipients, those in traditional Medicare, should actually improve under health care reform.
The House legislation, the only bills in near-final form, would reduce and ultimately eliminate a gap -- the so-called doughnut hole -- in Medicare drug coverage that currently forces more than three million beneficiaries to pay for drugs entirely out of their own pockets once they hit specified spending levels. That would also benefit many other beneficiaries who pay high premiums for coverage in the gap that they never end up using.
The House bills would also waive deductibles and co-insurance for preventive care that can head off serious illness, expand eligibility for programs that assist low-income beneficiaries and provide incentives for doctors and hospitals to coordinate care, improve quality, and lower costs. All that should benefit many if not most Medicare beneficiaries. And delivery system reforms should benefit the private plans as well.
Read the full editorial at New York Times.com
3.) Stabenow Replies To Kyl: You Don't Need Maternity Benefits, 'But Your Mother Did'
My favorite video from the Senate Finance Committee mark-up (with a big h/t to Igor Volsky over at Think Progress). Once again, a conservative member of Congress is making the case that legislatures should not create minimum standards for coverage (a la, a mandate). I don’t buy that argument, but if you’re going to make it, I’d avoid citing a class of medical care that half of the population had an excellent chance of needing at some point in their lives.
Plus, it’s basically a video of a United States Senator making a “Your Mama” joke. What’s not to love?
