Bending the Cost Curve, or Not :: Political News and commentaries

« Sickening Insult to Injury | Main | AG Holder's True Motive »

November 20, 2009

Bending the Cost Curve, or Not

Clearly, it's a "Not."

As Megan McArdle points out:

[...] ... according to the CBO, the savings achieved by Subtitle A, the main delivery system reform part of the bill, are trivial--not really distinguishable from zero, when you consider the uncertainties inherent in the estimates.

What passes for delivery reform consists mostly of slashing reimbursement rates to providers, and then putting Medicare Advantage on the same plan. There are two problems with this. The first is that there's no reason to believe that providers will find ways to efficiently provide care at the new, lower rates, rather than just stop serving Medicare patients. That was the core point of the recent report from the Centers for Medicare and Medicaid Services--and though a lot of bloggers developed sudden suspicions about the integrity of government reports, in fact, this pretty much jibes with the warnings that Doug Elmendorf has been issuing, and also, reality. There are already shortages of geriatricians which can be substantially attributed to the fact that Medicare has ensured it is one of the lowest-paid specialties. When the guy who oversees your provider payments says that your new payment scheme is probably going to lead to providers dropping out of your program, you need to take that seriously.

The second is that the treatment cuts--and any further cuts recommended by the cost effectiveness commission--can be undone by Congress. Not only can, but almost certainly will. There's some attempt to get around this by forcing Congress to do only an up or down vote on the recommendations. By bundling the really unpopular stuff with other reforms, the hope is that they'll be able to push them through.

Unfortunately, the commission's recommendations do not save much in any one year, which means it's not actually going to be all that difficult to vote "no" in any one year--and by the time it actually is hard to vote "no", we'll face the same problem we have with the Sustainable Growth Rate cuts for physicians--the cuts needed are so big that it has become impossible to vote "yes", because the providers can't deliver those kinds of cost savings.

Read it all ...

Jennifer Rubin sums up the reality that Americans are faced with; there's really nothing in sight that will influence the cost of health care, because the Democrats refuse to address two issues:

tort reform (with the ensuing problem of defensive medicine and unneeded procedures) and expanding markets (e.g., interstate sales, changing tax treatment of individually purchased plans).

What we are doing here is spending gobs of money, raising hundreds of billions in taxes, slashing Medicare payments, and empowering government bureaucrats to influence health-care treatment all in the name of expanding coverage. It isn't remotely what Obama promised, and it's not what voters seem to want. But we may get it anyway.

Take home message: It's a big NOT on bending the cost curve - and if any current versions of Obamacare are approved - count on rationed care, expanded entitlements, all Americans being made dependent on government-approved insurance plans, tax-payer funded abortions, and stifling additional national debt.

Posted by Richard at November 20, 2009 9:25 AM

Articles Related to Political News and commentaries: