Free Markets, Free People
To date it’s been an attempt that mostly gets fussy about word usage, but my guess is it will get more pointed:
Gov. Romney is talking nonsense. Bipartisanship requires that you not make up the facts. I did not ‘co-lead a piece of legislation.’ I wrote a policy paper on options for Medicare. Several months after the paper came out I spoke and voted against the Medicare provisions in the Ryan budget. Governor Romney needs to learn you don’t protect seniors by makings things up, and his comments today sure won’t help promote real bipartisanship.
That’s obviously in reaction to a statement by Romney in which he talked about legislation, not a policy paper.
So Wyden is right, the quote is incorrect.
But Wyden is being a bit disingenuous too. You don’t vote for parts of a budget so claiming you voted “against the Medicare provisions” of a budget are a bit of nonsense as well. Democrats voted against the entire Ryan budget, the Medicare provisions being only a part of that.
Even Think Progress has some problems with the attempted delinking driven by the inconvenient politics of having a Democratic Senator’s name on a plan that Democrats have chosen to mischaracterize and demonize:
The plan Sen. Wyden co-authored with Ryan does bear a striking resemblance to the proposed Medicare changes in Ryan’s latest budget for the House GOP. Both keep traditional Medicare as a kind of public option, in an exchange where it would compete with private plans offering insurance to seniors. The government would give seniors support for purchasing these plans, and that support would be benchmarked to the cost of the second-least expensive plan. The plans would also be prohibited from discriminating based on pre-existing conditions.
Where they begin to differ is Paul supports more market based solutions while Wyden wants government based solutions.
But this sort of linkage is inconvenient when you’re claiming the GOP ticket is “trying to end Medicare as we know it” (even though it is ObamaCare which is pulling $700+ billion out of Medicare). Avik Roy has the “bottom line” on that meme:
The bottom line: if Romney and Ryan leave you the option to remain in the 1965-vintage, fee-for-service, traditional Medicare program, and you claim that Medicare has “ended as we know it,” what you’ve really ended is the English language as we know it.
The point? Ron Wyden did indeed “co-author” a Medicare plan with Paul Ryan. There’s no question about that. And it was indeed a bipartisan plan, by definition. In fact the paper is entitled “Bipartisan Options for the Future” and lists both Wyden and Ryan as the authors.
Finally, their plan contains this paragraph:
We are a Democrat and Republican; a Senator and a Representative; senior members of our respective Budget Committees; and members of the committees that have jurisdiction over Medicare and health care costs. As budgeteers, we understand the difficulty presented by demographic changes over the next several decades. As members with policy oversight, we recognize and encourage the potential for innovation to improve care and hold down costs. And most important, as representatives of hardworking Americans in Oregon and Southern Wisconsin, we realize our absolute responsibility to preserve the Medicare guarantee of affordable, accessible health care for every one of the nation’s seniors for decades to come.
Sounds like a pretty bipartisan effort to me.
Here’s the problem for the Democrats. They need badly to demonize Paul Ryan as an extremist who is out to push granny over the Medicare cliff and end Medicare as we know it. That’s because “Medicscaring” seniors is a tried and true method of gaining votes, and Democrats know it. They’ve deployed it many times in the past.
And bipartisan cooperation? No way, no how, can’t let that sort of thing become public knowledge when you have an active campaign beginning to label Ryan as an extremist ideologue.
But the facts don’t support that sort of branding campaign. Not only has Ryan not attempted in any form or fashion to end Medicare, he’s teamed up with a liberal Senator to put forward a plan to actually save it (even while the loudest critic is pulling that $700+ billion from the program via ObamaCare) and make it sustainable.
That is why Wyden is trying his best to delink from Ryan. And you can imagine from whence the pressure to do so is coming. But it’s a hard sale to make when his name is clearly associated with Ryan’s on a plan he claimed will “preserve the Medicare guarantee of affordable, accessible health care for every one of the nation’s seniors for decades to come”, isn’t it?
Not that it will stop them from trying.
Perhaps you remember the “clever” accounting trick (also known as double counting) that the Democrats used to claim that ObamaCare would save money?
You know, it would cut Medicare by 500 billion (after the election, of course). You were supposed to believe that was a net cut in spending, remember? Of course it wasn’t. It was simply shifting the money to “pay” for other areas of ObamaCare. There was no “net” savings.
Well the newest projection by the CBO is that it will actually be 716 billion over 10 years (2013 to 2022) and it will essentially gut Medicare. Of course the old folks will have voted before it goes into effect.
The result of the shift of the funds? The Foundry has it:
- A $260 billion payment cut for hospital services.
- A $39 billion payment cut for skilled nursing services.
- A $17 billion payment cut for hospice services.
- A $66 billion payment cut for home health services.
- A $33 billion payment cut for all other services.
- A $156 billion cut in payment rates in Medicare Advantage (MA); $156 billion is before considering interactions with other provisions. The House Ways and Means Committee was able to include interactions with other provisions, estimating the cuts to MA to be even higher, coming in at $308 billion.
- $56 billion in cuts for disproportionate share hospital (DSH) payments.* DSH payments go to hospitals that serve a large number of low-income patients.
- $114 billion in other provisions pertaining to Medicare, Medicaid, and CHIP* (does not include coverage-related provisions).
*Subtract $25 billion total between DSH payments and other provisions for spending that was cut from Medicaid and CHIP.
The effect will be fairly substantial and should be obvious to even the most staunch ObamaCare supporter:
The impact of these cuts will be detrimental to seniors’ access to care. The Medicare trustees 2012 report concludes that these lower Medicare payment rates will cause an estimated 15 percent of hospitals, skilled nursing facilities, and home health agencies to operate at a loss by 2019, 25 percent to operate at a loss in 2030, and 40 percent by 2050. Operating at a loss means these facilities are likely to cut back their services to Medicare patients or close their doors, making it more difficult for seniors to access these services.
In addition, as MA deteriorates under Obamacare’s cuts, many of those who are enrolled in MA (27 percent of total Medicare beneficiaries) will lose their current health coverage and be forced back into traditional Medicare, where Medicare providers will be subject to further cuts. The Centers for Medicare and Medicaid Services chief actuary predicted in 2010 that enrollment in MA would decrease 50 percent by 2017, when Obamacare’s cuts were estimated at only $145 billion. Now that the cuts have been increased to $156 billion (or possibly $308 billion, as the Ways and Means Committee estimates), MA enrollment will surely decrease even further.
But Obamacare’s raid of Medicare doesn’t stop with cuts; it includes a redirection of tax revenue from the Medicare payroll tax hike in Obamacare. The payroll tax funds Medicare Part A, the trust fund that is projected to become insolvent as soon as 2024. Obamacare increases the tax from 2.9 percent to 3.8 percent, which is projected to cost taxpayers $318 billion from 2013 to 2022. However, for the very first time, Obamacare does not use the tax revenue from the increased Medicare payroll tax to pay for Medicare; the money is used to fund other parts of Obamacare, much like the $716 billion in cuts are.
That in addition to the fact that Medicare still has 37 trillion in unfunded mandates.
Also note the tax increase in the last paragraph (yes, that would be a middle class tax increase) and how the funds will not support the program with the 37 trillion problem.
Now we can argue all we want about the existence or non-existence of “death panels”, but here we have exactly what was predicted prior to this abortion of a law being passed. Rationed care (“… cut back services to Medicare patients or close their doors, making it more difficult for seniors to access these services.”) driven by these cost cuts are defacto “death panels”.
As the Foundry concludes:
With a raid on Medicare of this magnitude, President Obama’s assertion that his new law is protecting seniors and Medicare is astonishing. The truth is that Obamacare does the opposite.
But hey, this is the same President who claims his economic policy is working too. See previous post for the reality of that claim.
The reason this cut takes place in 2013 is obvious. If seniors were aware of its impact, you know how they’d vote.
Whether you do or don’t support Medicare isn’t the point, it’s the bald faced lies that have been put forward claiming something that isn’t at all true. And now the numbers are out that prove that.
Again, something which should be front and center as a major issue in this political season.
But it won’t be.
John Goodman poses a scenario for you to consider:
Suppose you are accused of a crime and suppose your lawyer is paid the way doctors are paid. That is, suppose some third-party payer bureaucracy pays your lawyer a different fee for each separate task she performs in your defense. Just to make up some numbers that reflect the full degree of arbitrariness we find in medicine, let’s suppose your lawyer is paid $50 per hour for jury selection and $500 per hour for making your final case to the jury.
What would happen? At the end of your trial, your lawyer’s summation would be stirring, compelling, logical and persuasive. In fact, it might well get you off scot free if only it were delivered to the right jury. But you don’t have the right jury. Because of the fee schedule, your lawyer skimped on jury selection way back at the beginning of your trial.
This is why you don’t want to pay a lawyer, or any other professional, by task. You want your lawyer to be able to reallocate her time — in this case, from the summation speech to the voir dire proceeding. If each hour of her time is compensated at the same rate, she will feel free to allocate the last hour spent on your case to its highest valued use rather than to the activity that is paid the highest fee.
None of us would ever want to pay a lawyer by task, would we (not talking about a will or legal document production here, but instead some form of defense against charges which necessitates a jury trial and requiring the accomplishment of many tasks)? We’d instead insist upon paying them for a package of services designed to do whatever is necessary to defend us to the best of their ability with the ultimate goal of us walking free.
So why is it we can’t demand the same of doctors? Why can’t we demand a package of services designed by them to address all of our medical problems?
Well if your stuck with Medicare or Medicaid, you’re stuck with government price fixing and payment by task, that’s why. First the price fixing:
Medicare has a list of some 7,500 separate tasks it pays physicians to perform. For each task there is a price that varies according to location and other factors. Of the 800,000 practicing physicians in this country, not all are in Medicare and no doctor is going to perform every task on Medicare’s list.
Yet Medicare is potentially setting about 6 billion prices across the country at any one time.
OK? Bad enough that Medicare has completely removed the price mechanism from the process. As economist Dr. Mark Perry notes:
These problems sound a lot like the deficiencies of Soviet-style central planning in general when the government, rather than the market, sets prices, see Economic Calculation Problem.
Exactly and stultifyingly obvious, correct? In fact, it’s something one shouldn’t have to point out. Nor, would it seem, should it be something that we’re doing either. But we are. You just have to remember, our government doesn’t care about history, because, well, you know, it will get it right where all these other governments have failed. Just watch.
If the price fixing isn’t bad enough, it has also hit upon a procedure that actually inhibits the delivery of good health care rather than incentivizing it.
Medicare has strict rules about how tasks can be combined. For example, “special needs” patients typically have five or more comorbidities — a fancy way of saying that a lot of things are going wrong at once. These patients are costing Medicare about $60,000 a year and they consume a large share of Medicare’s entire budget. Ideally, when one of these patients sees a doctor, the doctor will deal with all five problems sequentially. That would economize on the patient’s time and ensure that the treatment regime for each malady is integrated and consistent with all the others.
Under Medicare’s payment system, however, a specialist can only bill Medicare the full fee for treating one of the five conditions during a single visit. If she treats the other four, she can only bill half price for those services. It’s even worse for primary care physicians. They cannot bill anything for treating the additional four conditions.
So, for example, if you have diabetes, COPD, high blood pressure or any combination of a number of other chronic diseases, tough cookies, your doc can only treat one per visit – unless, of course, he or she wants to work for free on the others.
Don’t believe me?
[When Dr. Young] sees Medicare or Medicaid patients at Tarrant County’s JPS Physicians Group, he can only deal with one ailment at a time. Even if a patient has several chronic diseases — diabetes, congestive heart failure, high blood pressure — the government’s payment rules allow him to only charge for one.
“You could spend the extra time and deal with everything, but you are completely giving away your services to do that,” he said. Patients are told to schedule another appointment or see a specialist.
Young calls the payment rules “ridiculously complicated.”
That has nothing to do with being complicated. It has to do with stupidity overruling common sense and the stupidity being enforced by an uncaring bureaucracy. “Rulz is rulz, Doc”. Do what is best for your patient and do it for free – that’s one way to lower costs, isn’t it?
But don’t forget – government involvement will mean better care at lower cost. That’s the promise, right?
Instead government is now redefining “better” to mean “their way or the highway”. It has nothing to do with what is better for the patient or the doctor. It has to do with what is better politically. And, of course, better for the bureaucracy. In this case, that means squeezing the doctor for everything they can get at the expense of the patient. Since you don’t have a choice about Medicare when you reach 65, any doctor you see doesn’t have a choice about how he or she treats you.
The only choice you have?
Live with it … if you can.
The concept in the title isn’t a difficult one to grasp, yet it seems to be one that eludes any number of people who think government can cut medical care costs and improve care simultaneously.
A growing number of states are sharply limiting hospital stays under Medicaid to as few as 10 days a year to control rising costs of the health insurance program for the poor and disabled.
So what does that mean? Well, it’s a vicious circle that ends up costing more, because of one tiny problem:
In Arizona, hospitals won’t discharge or refuse to admit patients who medically need to be there, said Peter Wertheim, spokesman for the Arizona Hospital and Healthcare Association. "Hospitals will get stuck with the bill," he said.
That will most likely be the case for all hospitals.
And the result?
Advocates for the needy and hospital executives say the moves will restrict access to care, force hospitals to absorb more costs and lead to higher charges for privately insured patients.
And what will happen?
Cost will continue to spiral upward for everyone.
And continue to do so.
For fiscal 2012, the association estimated state Medicaid spending will rise 19%, largely because of the end of the federal stimulus dollars.
The program served 69 million people last year.
That number will go up as millions are added under ObamaCare.
Your “cost cutting” government at work.
Promises, promises, promises. President Obama promised the passage of the Affordable Care Act would lower health care costs across the board, making health care “more affordable”. The entire premise of the massive government intrusion in that market was to lower costs and make insurance more affordable.
A new study says that doing nothing would actually have been slightly less expensive. The irony is this isn’t some opposition think tank which has put up these numbers but the Centers for Medicare and Medicaid Services:
Despite President Obama’s promises to rein in health care costs as part of his reform bill, health spending nationwide is expected to rise more than if the sweeping legislation had never become law.
Total spending is projected to grow annually by 5.8 percent under Mr. Obama’s Affordable Care Act, according to a 10-year forecast by the Centers for Medicare and Medicaid Services released Thursday. Without the ACA, spending would grow at a slightly slower rate of 5.7 percent annually.
The primary reason, supporters say, is more people will have insurance.
CMS officials attributed the growth to an expansion of the insured population. Under the plan, an estimated 23 million Americans are expected to obtain insurance in 2014, largely through state-based exchanges and expanded Medicaid eligibility.
The federal government is projected to spend 20 percent more on Medicaid, while spending on private health insurance is expected to rise by 9.4 percent.
Anyone – do you know why “private health insurance costs” are expected to rise by 9.4%? Because the privately insured will be tapped to help pay the difference between what an expanded Medicaid base pays and what doctors charge. Or, in other words, they will be the victim of government intrusion and market distortion. And of course government is then going to point to the costs its distortion caused and claim it should help solve the problem it has created. And what will be eventual answer to those increased costs caused by government distortion be? Single-payer, of course.
This study doesn’t address the other real problem – you may expand Medicaid dramatically, but having that insurance doesn’t guarantee seeing a doctor. Other studies have shown that increasing the insurance base doesn’t decrease emergency room use, but instead increases it in the face of a building doctor shortage. And then, of course, there are those doctors who simply won’t take Medicaid (or any more than they now have) because of the low reimbursement rate.
So when the White House’s Nancy-Ann DeParle says:
“The Affordable Care Act creates changes to the health care system that typically don’t show up on an accounting table,” she said. “We know these new provisions will save money for the health care system, even if today’s report doesn’t credit these strategies with reducing costs.”
She’s also leaving out that part of the problem that doesn’t “show up on an accounting table” as well.
Bottom line, we were sold a lemon, a bill of goods, snake oil. All the ACA does is give the government a legal ability to intrude deeper and deeper in a market it really has no business being in at all and to distort that market even further. And that’s precisely what is going to happen. We all know that when government gets in as deep as it will be in this market, nothing ends up “costing less”.
You might ask, what could McQ possibly find similar in an article about a U2 concert and an LA Times opinion piece about Medicare?
Well, you might be surprised.
Here are excerpts from the articles. First the U2 concert:
U2 and its frontman Bono, known for their global poverty-fighting efforts, were accused of dodging taxes in Ireland by activists who crashed their performance at England’s Glastonbury festival.
The anti-capitalist group Art Uncut inflated a 6-metre balloon emblazoned with the message "U Pay Your Tax 2." Security guards wrestled them to the ground before deflating the balloon and taking it away. About 30 people were involved in the angry clash.
Art Uncut argues that while Bono campaigns against poverty in the developing world, his group has avoided paying Irish taxes at a time when his austerity-hit country desperately needs money.
Ireland, which has already accepted an international bailout, is suffering through deep spending cuts, tax hikes and rising unemployment as it tries to pull the debt-burdened economy back from brink of bankruptcy."
“Tax(es) nestling in the band’s bank account should be helping to keep open the hospitals, schools and libraries that are closing all over Ireland," Art Uncut member Charlie Dewar said ahead of the protest.
U2, the country’s most successful band, was heavily criticised in 2006 for moving its corporate base from Ireland to the Netherlands, where royalties on music incur virtually no tax.
Okay? Got the gist?
Now to an article where Michael Hiltzik obviously thinks he does yeoman’s work “debunking” Paul Ryan’s Medicare plan. Here’s his underlying premise:
One of the basic flaws of Ryan’s plan is that he folds Medicare’s long-term fiscal problem into the near-term problem of the federal deficit. But these are two very different things. As Henry Aaron of the Brookings Institution observes, the current government deficit is the result of an enormous tax cut mostly for the wealthy, of paying for two wars by credit card, of the Great Recession, and of spending to address that recession. Recovery will address at least some of that, and restoring income tax rates to pre-Bush levels would go a long way toward managing the rest.
Or tax cut, spending, recession, spending. His solution? Tax and tax. Seriously when he says “recovery will address at least some of that”, he’s talking about increased tax revenue. And of course the rest of his solution is a tax increase (of course only on the “wealthy”).
Spending? Well it’s only a problem now. It becomes a lost word when it comes to solutions. His tax solutions, you see, will take care of everything. No need to cut spending.
But that’s not even the big point here. In both the U2 story and the Hitzik op/ed, a very basic assumption is made – that the money earned by the wealthy is OWED to the rest of society simply because the rest of society has gotten itself in over its head. And in the case of both stories, the wealthy are assumed to be “dodging” taxes by doing what is legal (and necessary) to protect what they earned. Their property.
U2, who would prefer to use what they earn for their own priorities (fighting poverty as it turns out), are criticized for not turning it over to be spent as the protesters think it should be spent. They actually believe they’re being cheated of their money because the band has moved to a place which doesn’t tax what they do as heavily as the country from which they originate. There’s no other reason for the protest if that isn’t their belief, is there?
So with Hiltzik and the protesters we see variations of the same theme that is so popular on the left. In essence it says that what you earn is really owned by all and they have every right to determine how much you keep – not you. That, as most of us know and understand, is a foundational concept of one of the most dangerous ideologies in the world.
And, as Margaret Thatcher famously said, “the problem with socialism is you eventually run out of other people’s money”.
That’s precisely what the “solutions” the protesters and Hiltzik put forward are attempting to stay, isn’t it?
Because they’re all over the place. Many of them are trying to nationalize this very local special election by claiming it is a referendum on the GOP’s Medicare plan because a Democrat won. But it you look closely at the race, it was more of a Republican debacle than much to do with Medicare. As has been the case in many elections, competing Republicans managed to get in each other’s way (the Dem won 47% while the GOP candidate garnered 43% and the Tea Party candidate 9% – thus guaranteeing the Dem win with a plurality).
As for the Medicare portion of this, yes it was demagogued by Democrats. But as a reason for the win? Tentative at best. But it does point to a messaging problem for the GOP. I thought I understood Ryan’s plan (and, despite the usual inflammatory Democratic rhetoric, it doesn’t end Medicare at all) but to satisfy myself, I went out looking for his explanation. I found this:
How awful, no? Patient centered (bureaucracy removed), means tested, and competition. In fact, as he says, the program would be “just like the one Congress has”.
Well, wait, wasn’t that a promise of ObamaCare? Wasn’t that something we were supposed to want? Wasn’t cutting costs supposed to be the “big promise” in ObamaCare?
So here’s the plan to deliver that (oh, by the way, nothing changes for those 55 and older, so they’re grandfathered in) and the Democrats are savaging it as only Democrats can (dead grannies and the live one’s eating cat food).
If NY 26 turned on Medicare – and I don’t really believe it did – I think the GOP needs to get this video out there prominently. When I went to YouTube to find something I noticed this vid had been watched by 111 others. Not exactly viral.
You tell me – which plan makes more sense? I know which I think fulfills the promises of making health care more affordable and competitive.