the CBO is required to compare the BCRA with current law. For Medicaid, that means it must assume that the financially unsustainable entitlement will continue to swell to cover about 5 million more people, accounting for the bulk of the remaining 7 million uninsured. Not likely. For the individual ACA markets, it means the CBO assumes that enrollment rises by 30 percent over the next 10 years — a sharp contrast to the reality of insurer after insurer walking away.
Some remarks:
1. I have not been following the health care bill at all. Of all the commentators on it, I trust Holtz-Eakin the most. He is for the bill.
2. If the Republicans do not fix Obamacare, then the Democrats will. That means single-payer. That is another reason to be in favor of the bill.
3. My longstanding analysis of health care remains: as individuals, we wish for unlimited access to medical services without having to pay for them. But the more people who are granted our wish, the more that health care spending will soar. What we need is not more people to be granted our wish, but fewer people granted our wish. But pity the politician who runs on the platform of granting fewer people their wish.
4. The libertarian approach to health care is to have people make their own decisions and trade-offs about health care. The bleeding-heart libertarian approach is to give poor people and people with chronic conditions subsidies, but still let individuals make their own decisions and trade-offs. I am not convinced that there are many Americans who want to make choices and trade-offs when it comes to health care. When it comes down to it, they would rather have government make those decisions for them.
5. The CBO’s role in this has been a disgrace. The model that they use to predict consumer insurance choices way over-states the sensitivity to mandates, so it over-estimated how many people would choose Obamacare and it over-estimates how many people will “lose” (i.e., choose not to obtain) insurance without the mandate. The CBO should not be in the business of making this sort of forecast in the first place. The CBO should not be “scoring” the effects of policy, such as the effect of the stimulus on employment. The CBO should be restricted to making budget forecasts and nothing else. When it tries to forecast any other policy impacts, it ends up harming the decision-making process. Holtz-Eakin, a former CBO director, might not agree with me on this point.
People want to receive “good enough” healthcare for a % of their income that seems reasonable. Good enough is whatever it seems like most people in their situation are getting. % of income includes any taxes paid for healthcare.
I’m sure you can find people who want the whole world, but if you push people on that issue that seems to be what it comes down to. At least middle class people.
Neither party has put forward a plan to accomplish that. Other countries have accomplished this through a variety of means.
People prefer choice but don’t consider themselves doctors. The only kind of choice I’ve seen people comfortable with is moderate expenditures on conditions that are easy to understand or elective in nature.
The current insurance billing market is far to byzantine for anyone to make intelligent decisions based on price.
Asking people to make life or death decisions for loved ones based on $$$ isn’t going to fly either.
If I quizzed ten of my friends, most of them college educated professionals, I don’t think a single one could tell me what the CBO is.
I also haven’t been following the bill, but I get the impression its a cutback whose money is going into tax cuts for the wealthy. Even if you think Obamacare should get cut back (I’d be on board) you’ll at least thing they would use it for middle class tax cuts, or health credits, or simply paying down the debt. But no, its tax cuts for rich assholes that probably voted Democrat. Hope they realize every one of those dollars is getting donated to Democratic campaigns.
Money isn’t as big an issue for Democrats as message and strategy. Clearly running ads that aren’t working didn’t work well in 2016.
1) in as much the state does provide for some minimum standard level of care/coverage, I think it should be like social security (or like social security should be): people Are required to pay in and guaranteed to get something out; maybe slightly redistributionary but definitely a regressive tax to disincentivize over-consumption.
2) even if most people aren’t informed enough to make their own decisions, empirical evidence amply proves that even a small fraction of consumers doing informed shopping is enough to drive down costs and quality up, including in health care. The alternative the government making decisions isn’t uninformed people making decisions: the uninformed can do what they do for other goods and services: defer to the market;buy whatever’s available or cheapest or well-rated. Most people don’t know much about cars, but enough do know enough to control the costs and quality of cars in the market, to everyone’s benefit.
3) Tax cuts for the rich? I’m not going to take the NYT’s word for it. What specific tax cuts are they? If their capital gains or corporate tax cuts, then they will mostly be enjoyed by consumers and employees, in which case they are effectively middle and working class tax cuts.
I want High deductible and HSA.
1. The main reason why I supported Obamacare is a way to move from employer based insurance along with other programs. I think the current system is awful is creates terrible job lock and I really wished this nation moved away from it.
2. The CBO missed a number of things in Obamacare but the number of uninsured people is close to 28M. Their main miss was in 2009 they assumed the employer based system would continue to diminish which was reasonable in 2009.
3. The Senate is a reasonable plan for universal coverage
4. I don’t think it is just money but fear. I do have a child with pre-existing conditions who is going struggle the rest of his life on money & insurance.
5. I don’t the left loves the single payer as much as you assume but they believe in some sort coverage everybody. Frankly, I wish we had more of a state system as California would benefit from a like Singapore plan while Alaska is the definition of single payer.
6. Republicans do NOTHING about supply of health care and only offer more Savings Accounts that everybody fuckin’ hates.
7. If the Senate bill does pass, I hope poorer people react not by choices but by the way the Singapore society acts which is having less children. Less children will save a ton of money. I warning all my kids that you need a career, married and good health insurance to be ready for kids.
1) Obamacare didn’t do this though. In fact that only thing anyone remembers was “if you like your health plan, you can keep it.”
7) Where they having less kids before Obamacare?
First, the poor don’t plan children. They “just happen.” Child mortality is birth control for the poor.
Second, poor people got medical care both before and after. The only difference was whether the hospital ate the cost of got a check from the government.
The worst thing about Singapore is its an IQ shredder where smart genes go in and they don’t come out. They are losing the high IQ at a rate of 50% per generation.
March 2017, Dean Baker and Cherrie Bucknor
A major goal of the ACA was to give workers the ability to obtain insurance outside of their employment, so that they would not be tied to a job that doesn’t meet their needs or fully utilize their skills due of their need for health insurance. The jump in voluntary part-time employment since the exchanges went into operation is an indication that the ACA has had this effect. This paper gives the breakdown of this increase by state. Presumably, if the ACA were repealed without some comparable or better system of insurance put in its place, these numbers should give an indication of how many people would again be forced to seek out full-time employment to get employer-provided health insurance, even though part-time work better fits their needs.”
http://cepr.net/publications/reports/the-affordable-care-act-and-the-change-in-voluntary-part-time-employment-by-states
“Presumably, if the ACA were repealed without some comparable or better system of insurance put in its place…”
This is a simple fix: deregulate insurance markets to allow for more portable (and non-group) plans, particularly in employer provided plans (and of course get rid of special tax treatment of employer plans). The incentive to get full time in order to qualify for (mandated or incentivized) employer provided insurance is an artifact of regulation. Get rid of the regulation. Problem solved.
Mind you, this won’t happen; too many ‘moderate’ Republicans in the senate have basically bought into the ideal of ‘technocratically’ regulated, state-guaranteed universal health care. This is likely a big reason why the GOP won’t do anything to improve the supply side of health care.
I did not say Obamacare did it well and they rightfully paid for these mistakes. However:
1) At my company we had a HUGE cutback in health benefits in 2009 in which of course they blamed Obamacare. (In reality it was in the works since 2007 and is a plan conservatives are pushing.) I still say economist way underestimate these ‘wage decreases of 2008-2011 and frankly I am surprised the employer based system did not decline after 2011. (In our office there was a sudden shortage of skilled labor in 20112.)
7) Didn’t Garrett Jones write a whole book on how great Singapore was and it had the highest national IQ? Singapore is the most beloved nation in conservative/libertarian policy and I find it fascinating they have also have among low fertility rate in the world. (Estimation are 1.1 baby/woman although I believe there has been some increase.) So it appears the modern contradiction that richer society we are the less we can afford children holds true here.
Anyway, the US births did drop about ~8% from 2008 to 2012 so there was some of this going on with choices. Additionally, teenage pregnancy drop a bunch in the 2009 – 2012 period so a number of poor people made alternative choices here. And if we did lower Medicaid in the US covering the $15K price tag, I bet a lot more poor people would get abortions.
https://www.cdc.gov/teenpregnancy/about/index.htm
1) Yes, Obamacare hurt employer plans, but didn’t provide an alternative for middle class workers that was better then what they had. As such its an enemy of me providing healthcare to my children.
7) Singapore’s low fertility is recent, it will take awhile to sort all the way through society. They are also able to supplement with fresh high IQ Chinese immigrants, but that is a non-renewable resource.
Wealth itself doesn’t cause low fertility. Secularism, liberalism, feminism, and progressivism cause low fertility. These tend to increase with wealth, but high IQ people who avoid them still have 2.0 TFR.
We already abort so many brown babies its hard to imagine getting the number even higher. Besides, the problem isn’t native brown TFR near 2.0, its low high IQ TFR & low IQ immigration that’s the problem. Both are leftist impositions. Singapore solved the latter but could not crack the former.
Please.
In what way did the ACA hurt employer plans? By making insurers pay 85% of premiums to providers for services?
Show me something.
BTW,
You aware of the slowdown in healthcare costs since the ACA came into being?
There are a lot of reasons for a slowdown in healthcare costs, try actually linking them to the ACA.
The ACA added direct taxes to employer health plans to fund the subsidies. I reviewed these as a regulator. It also increased taxes on medical devices, which gets passed through to health plans. Finally increased taxes and debt related to the program inevitably fall on the employed middle class, who get nothing out of the deal.
BTW, the 85% rule is a joke that didn’t accomplish shit. One of the first things I learned as a regulator for ACA.
1) From my company, the 95% health care changes did not come from Obamacare but from work they did starting in 2007. Blaming Ocare was an exaggeration for cutting the coverage. I am surprised O’care did not allow businesses to voucher the employer based system as our family might have taken that 2 years ago when our division was sold to a smaller company.
2) In terms of Singapore fertility they have been below 2.0 babies/female since 1977 and below 1.3 babies since 2000. That does not hit me as a recent trend. Like other Asian Tigers they appeared to be behind Japan by 5 – 10 years. It is true it is modern wealthy nations don’t have to have low birth rates but name a good capitalist nation that has a thriving birth rates not in the Middle East. Even India is close to 2.2 replacement rate and it is exceptionally poor areas that are keeping this rate up. The main wealthy nations with high birth rates are in the ME like Israel, Saudia Arabia and the other oil rich nations.
3) In terms of birth rate and religion, I believe it is a circular function. As religion diminishes than birth rate declines from young people putting off family formation. As people have children later then they return later or simply don’t return. (But remember the divorce rate has decreased the last 35 years so it is not like earlier generations were dedicated to ‘family’)
To be honest, I am not sure how to break this cycle as it takes longer for young people to reach a ‘good’ career with decent health insurance.
4) Isn’t the abortion rate in the US still a lot lower than 1979 – 1982? I still don’t understand why conservatives don’t pursue birth control as Over-the-counter.
The age curves are just starting to hit Asia. People born in 1977 are 40 today, prime working age.
Its easy to have a low divorce rate if you have a low marriage rate and low fertility rate.
“To be honest, I am not sure how to break this cycle.”
Nobody has cracked the nut, its a scary nut. It’s also the only nut that matters.
Affordable family formation policies, counter great centralization as much as possible, end immigration, make progressivism low status by any means possible.
More simply, look at which high IQ groups are breeding and promote more of that. Look at which groups aren’t breeding and make what they do low status. Better to look within rather then between countries to do that analysis.
Condoms are cheap and readily available. Nobody ever didn’t use protection due to cost.
“You aware of the slowdown in healthcare costs since the ACA came into being?”
Healthcare costs have been decelerating in the last few years in most of the developed world, and last I checked the ACA’s jurisdiction is restricted to the US.
Moreover, it is statistically laughable to try to infer a sustainable slowing trend from the past few years in the US.
Look at this graph from wikipedia (taken from OECD website):
https://en.wikipedia.org/wiki/Healthcare_in_Canada#/media/File:Health_care_cost_rise.svg
Healthcare costs in the US started to plateau in the early 90s, then picked up again in the late 90s; started to plateau in the early 2000s, then picked up again in the late 2000s, only to plateau again; then seems to have started picking up again. Maybe its the business cycle, but there is a cyclical tendency to plateau and re-accelerate going back decades.
Octavian:
In looking at that chart in the past it seemed arguable to me that healthcare costs grow consistently, it’s the GDP that’s changing. If you look at the bumps, they’re in 2001 & 2008…recession years. So if you measure HC cost vs. GDP and HC costs grow consistently while GDP slows you get an increase in HC cost/GDP.
Since people still get cancer during recessions it seemed plausible.
1.). I did as well at the time. I also thought it might bend the cost curve. It did neither.
5 and 6.) I love my HSA. My company offers a traditional plan and an HSA. I go HSA. I go to a doctor once every year or two. A non-HSA plan is flushing money down the drain for me.
Also on this point, my understanding is that Singapore’s system is basically HSA driven (w/subsidies for the poor). I found it odd that you seemed to praise it and trash HSAs. My hunch is that most people would like HSAs if they understood healthcare spending economics.
The trick to Singapore is they regulate health services and price levels to keep wasteful procedures and price spirals from taking over like they ordinarily do in major med. Also, HSAs aren’t optional, its a forced savings/insurance regime that deducts right from your paycheck.
So its a bit foolish to call Singapore “free market healthcare”.
I am aware of the basic nature of the Singapore healthcare system that you mention.
Your ascribing regulations and price controls as preventing over utilization of procedures strikes me as odd. My understanding is that individuals having to pay directly for services is thought to reduce utilization (hence the reason for having HSAs) while price controls keep prices for critical procedures from spiking.
My basic point is that not everyone hates HSAs and that they are a component of Singapore’s system.
“If the Republicans do not fix Obamacare”
Got a problem with the verb here. When you place millions more Americans at risk, that is not a fix.
Taking Holtz-Eakin at his word in terms of his math on the uninsured:
“swell to cover about 5 million more people”
“assumes that enrollment rises by 30 percent over the next 10 years ”
I still come up with this “plan” he supports throwing 15 million people off their insurance coverage. Course, that does not include everything else this bill does.
But deficits……
The CBO assumption is that 15 million people will choose not to get insurance because of no individual mandate. Not be thrown off their insurance coverage.
One must remember, “not being required/subsidized to buy a good/service” = “being denied access to said good/service.”
No, that is wrong. The CBO assumption is that they will not have the money to buy insurance.
The obsession with this tiny mandate penalty is annoying. It makes no one buy insurance.
“The CBO assumption is that they will not have the money to buy insurance.”
Which is not a correct assumption; many of them will have enough money.
You’re right, the penalty is small and has not had nearly the effect that the CBO assumed it would. Nonetheless, they continue to assume a large impact for the individual mandate. Their estimates of insurance coverage have been off by a lot so far, and there’s no reason to suppose that their most recent estimate will be any better.
We’re doomed.
Major points to keep in mind about “Single Payer:”
Where does the money come from for the “Single Payer” to disburse?
How is the amount of money required determined?
How (on what criteria) does a “Single Payer” determine disbursements?
How and by whom and with what degree of effectiveness is the “Single Payer” managed and controlled?
Umm,
See Medicare.
Almost all civilized countries in the world are able to do this. And most of them are not “single payer”, they are two tiered systems, where the basic healthcare coverage is guaranteed and paid for by taxes, while the private market is for deeper and more extensive coverage.
It is not hard. And it is far, far cheaper and better than the current US system. Even the system that was improved by the ACA.
“It is not hard. And it is far, far cheaper and better than the current US system. Even the system that was improved by the ACA.”
This is debatable at best. Among developed countries there is no correlation between healthcare expenditure and outcome, and controlling for factors beyond the controll of the healthcare system (i.e., homicides, suicides, car accidents, eating habits) the US has the best quality health care in the world. We are indeed getting what we pay for, but the marginal benefit of paying more is simply negligible at this point.
Not to mention supporters have offered viable no mechanism by which greater state subsidization of health care would reduce costs. Economies of scale? Already almost entirely exploited by large insurance companies? Reduced administrative costs? Empirical evidence suggests the opposite.
Randomcriticalanalysis did a good blog post on the US healthcare system (a few posts actually) showing that the US is not actually that exceptional among developed countries.
https://randomcriticalanalysis.wordpress.com/2014/11/24/national-healthcare-expenditure-united-states-versus-other-countries-the-us-is-not-really-an-outlier/
This is of course all wrong. And beyond tiring.
“The U.S. health care system has been subject to heated debate over the past decade, but one thing that has remained consistent is the level of performance, which has been ranked as the worst among industrialized nations for the fifth time, according to the 2014 Commonwealth Fund survey 2014. The U.K. ranked best with Switzerland following a close second.”
http://time.com/2888403/u-s-health-care-ranked-worst-in-the-developed-world/
Amazing how the people in here just say things that are not close to being true, and of course there is never any kind of facts to back you up.
This is somehow entertaining to you?
Time and Commonwealth. Consider the source.
I’m occasionally asked to teach a course on real-world healthcare economics to residents. One of my standard comments is ‘if you read something on healthcare in Time, it’s probably wrong’
Umm, google the WHO or any organization. The result is the same.
Shooting the messenger only works in a bubble. Oh, wait……
Sorry. Too much real-world experience conflicting what I read in shoddy media coverage and dueling policy papers. My bubble has been poked by reality a few many times to hold its shape.
No, try reading what I posted.
Your time piece mostly consists of repeating the complaint that healthcare is too expensive and outcomes are poor, both of which are beside the point. Of course high quality care is expensive, and overall outcomes like life expectancy are mostly determined by factors other than quality of health care.
When one measures things like the success rates of specific procedures, the US generally exceeds the rest of the developed world. For example the US does more cancer screening and treatment (and enjoys better survival) than in European health care systems.
The myth that the US has worse quality health care than the rest of the developed world is based on the erroneous assumption that health outcomes well reflect quality of care; the point (which apparently went over EMicheal’s head) is that, among developed nations, the quality of care is already well past the point of being good enough that differences in quality have little if any discernible effect on outcome. Hence why “countries like Norway and Luxembourg spend more than twice as much Israel and Malta and see significantly shorter life expectancies.”
(1) Medicare does not cover the full cost of care. Medicaid REALLY does not cover the full cost of care. Both are subsidized by commercial payers.
(2) An example. Lucentis & wet AMD
* US: MDs prescribe course of treatment, patients adhere based on insurance status, willingness to pay, etc
* UK: Lucentis covered for one eye if you are blind in the other (wet AMD causes blindness). Though I suspect if you had wrap-around coverage it looks like the US model.
* Spain: Hospital gets $x, they decide who gets Lucentis (and who goes blind), who gets a hip replacement, etc
* France: Complicated mechanism whereby patients that need multiple courses get treated but at a slower rate than the disease progresses
* Russia: If you can pay out of pocket you do, if not you don’t. Or use Avastin off-label and split dose.
Single payer systems ration care too. Demand for healthcare services far outstrips ability to pay, same as in the US. They just use different mechanisms to ration that care.
The CBO should be restricted to making budget forecasts and nothing else. When it tries to forecast any other policy impacts, it ends up harming the decision-making process.
I see your point, but if the CBO didn’t do it, odds are someone else would fill the void. Brookings, maybe, or some other government agency, like the GAO. One entrepreneurial bureaucrat comes along and….
This would be a lot easier sell if Trump and Republican leadership would ask their supporters to immediately commit to not getting any health care for themselves or their family that they cannot personally afford to pay for, or for which they have exercised their freedom to refuse to be insured for, and live or die with the consequences. This would allow others to see that they will not be called upon to pay for the care for freeloaders, and to be assured that those supporting the bill’s sponsors will actually live by the principles the bill embraces. I personally would find it very persuasive.
Allow them to purchase a catastrophic health plan that uses the 2005 regulatory framework and I’d bet you’d get plenty of takers.
That framework allows denial of or rating of coverage for pre-existing conditions and high deductibles, not to mention denial of payment after it is received, so many wouldn’t or couldn’t.
But you agree with the basic premise that health care is a commodity that should not be available unless you can pay or have made arrangements to pay for it, right? There is no right to health care, is there?
Healthcare is a product like any other.
It has some features that make some types of healthcare hard to deliver in a market context (e.g., tough to identify ‘good’ care, time lag between provisioning and outcomes).
Further, as a society we may agree to subsidize certain populations that ‘lose the genetic lottery’.
But those are nits. Healthcare is massively over-regulated and healthcare is not a right.
What regulations have lead to so many opulent hospitals complete with interior waterfalls and $10,000 per dose medicines?
Opulent hospitals are driven by patient expectation and the lack of a price mechanism. Hospitals are factories and need adequate occupancy to be economic. If the hospital down the street has single-patient rooms and pretty waiting rooms and you don’t, you waste away. But since the patient isn’t paying the real cost (the 3rd party payer is), they select for amenities rather than lower cost/less capital.
That’s not really regulation though. So a small example. One disinfecting wipe costs $2/pack and is applied for 2 min. Another costs $3/pack and is applied for 3 min. The $3/pack is for rooms that had a patient with c-diff. Joint Commission comes around and asks providers questions about facility policies. Providers have to be able to answer them to maintain accreditation (regulation). If asked, can they say ‘apply for 3 min’ regardless of wipe? No, that’s wrong (even tho it works). So the facility converts to the $3 wipe for everyone instead of a mix with an average cost of (say) $2.20. Multiply that by a billion.
$10,000/dose drugs are driven by the fact that the cost to develop a new drug is semi-fixed ($1-2B last I looked). Most of the cost is in the failures and up to about phase IIa/b the costs are reasonably consistent. The lifetime is fixed in the US (for small molecules, biologics are a different dynamic). So you have to amortize that cost over the life of the drug. If you amortize it over millions of patients taking the drug chronically, you get $4/dose (cholesterol, depression, etc). If you amortize it over thousands or hundreds of patients taking it for a short period (cancer) you get $10,000/dose. The initial $1-2B cost is heavily influenced by the FDA and other equivalent agencies. The more risk-averse and intrusive FDA gets, the higher the discovery cost.
asdf,
Must me nice to be able to discuss a topic solely with simple declarative sentences validated by “do you know who I am”.
I am not going to go up and down your little list (yeah, I know there were other reasons costs declined besides the ACA), I also know Medicare costs have gone down a couple hundred billion a year solely due to the ACA.
Meanwhile, one bit of real data in your area of expertise would be nice. Exactly how much does the medical device tax cost employer provided insurance plans yearly? I sure don’t know. But my estimate would be little more than a rounding error. Please correct me if I am wrong in my guess.
How did it cut costs? How exactly?
In medicare, by imposing an unsustainable cap on the rate of increase in compensation for care provided under medicare, which, if not eliminated in the near future, will either lead to rationing (doctors seeing fewer medicare patients) or will lead doctors to increase costs for non-medicare patients to offset below-market prices for medicare patients.
The ACA cost-saving in medicate is simply price-fixing. It is unavoidably being paid for by either customers in the private market or by reduced availability of services to medicare patients.
I posted a link. Somehow that post will not be accepted.
Mainly by holding providers responsible for care via readmission penalties.
If you ahve eve been through an aging parent or grandparent and experienced the merry-go-round that hospitals would put people on:
3 days in hospital; run all expensive tests; rehab; home; readmisssion; run all expensive tests; rinse and repeat,
You would know how it worked.
I tried for the second time. Seems link the link will not post.
I will just put the dialog and you can search for the link
I am a little confused by this:
“The CBO should not be “scoring” the effects of policy, such as the effect of the stimulus on employment. The CBO should be restricted to making budget forecasts and nothing else.”
How can you make a budget forecast without “scoring” the effects of policy? In the editorial linked above, Holtz-Eakin talks about the budget effects of this Senate bill(sic), he cannot do that without “scoring” policy effects.
For instance, here is one of the policy effects of the ACA:
“Dive Brief:
Medicare is on track to spend about $2 trillion less over the next 10 years compared to previous projections from 2009, according to a new analysis from the Center for American Progress.
The findings, based on spending projections from the Congressional Budget Office, indicate the savings will increase over the years alongside slowed Medicare cost growth.
This slowdown in Medicare spending will fulfill one of the major goals of the Affordable Care Act, the researchers suggested, noting the ACA was signed into law in 2010 after the CBO pegged rising Medicare costs as one of the biggest drivers of growing, long-term national debt.
I’ll try another
A new report by the Urban Institute analyzing government projections in U.S. health care spending shows that it is growing at even slower rates than what was originally projected with the passage of Affordable Care Act. The study predicts that the U.S. will spend $2.6 trillion less on health care between 2014-2019 than what was initially anticipated when Obamacare was passed in 2010.
“Health care costs have had several years of really historic low spending during the period, so overall, public programs, private spending is all less than we thought it would be,” said Gary Claxton, vice president at the Kaiser Family Foundation. “Each year we see spending going up 3 percent, 2 percent, whatever, and not 5 percent, and because that stuff compounds, when it continues to go up more slowly … it starts to really add up.”
http://talkingpointsmemo.com/dc/health-care-spending-growth-urban-institute-study
An alternative hypothesis: in this decade Medicare has made a number of unilateral payment changes that have had major impacts on hospital reimbursement. Examples include shifting patients to observation status (80% reduction in payments), 2 midnight rule, and more recently shifting hospital rates for outpatient facilities more than 250 yards from the inpatient site. Observation status alone had a significant impact given the proportion of patients that come in through the ED. It pushed some community hospitals from financially stable to not.
None of these had anything to do with ACA. They were all backdoor rate reductions by CMS. Some flowed downstream to commercial payers, who are quick to follow if there’s a way to reduce cost growth.
I’m not even saying they’re bad things. Nothing forces change like not getting paid. But from where I sit, straight up payer (CMS) rate reductions were driving the train. ACA has been a marginal player.
I’m less conversant with the physician payments side, but PQRS, MIPS, MACRA, etc. sound like very similar rate-reductions-clothed-as-quality efforts.
I work in Medicare/Medicaid reimbursement. Those penalties have next to no teeth at this point. They’re typically a fraction of 1% of a hospital’s total revenue. Even the worst offenders aren’t penalized more than a few hundred thousand per annum. If healthcare spending is shrinking, it sure isn’t due to penalties for readmissions.
Seconded.
So, why didn’t they happen before?
I have a niece who is the director of nursing for one of the largest hospital groups on the east coast.
She has told me that the ACA mandates have had an immense impact on their procedures.
Now, that is an unsourced anecodote (which this blog specializes in), but that anecdote and the real facts go hand in hand.
“So, why didn’t they happen before?”
Because the actual cause of declining costs wasn’t readmission penalties, but reduction in reimbursements.
That’s what the Brookings Institute thinks: https://www.brookings.edu/blog/health360/2015/07/23/the-hutchins-center-explains-the-medicare-trustees-report/
If the changes, unrealistic as they are, are repealed, ““Medicare spending rises to 9.6% percent of GDP, about 50% higher than in the baseline scenario.”
Here’s some data for you from Kaiser:
The federal government’s readmission penalties on hospitals will reach a new high as Medicare withholds more than half a billion dollars in payments over the next year, records released Tuesday show.
The government will punish more than half of the nation’s hospitals — a total of 2,597 — having more patients than expected return within a month. While that is about the same number penalized last year, the average penalty will increase by a fifth, according to a Kaiser Health News analysis.
A half a billion dollars spread over half the nation’s hospitals is a big Nothingburger. Nationwide, hospital revenues exceed a trillion dollars. You’re talking a tiny fraction of a 1% reduction. Nussing, Lebowski, nussing.
That isn’t significant.
They cut Medicare (old white people) to pay for the ACA (poor brown people). How does it help me that my parents have less Medicare because of ACA? When a doctor won’t take Medicare because the reimbursement is too low my parents have been hurt.
If it didn’t raise any money, why was it even in the ACA? Obviously, Obama thought it raised enough money to be worth fighting for.
According to Brookings its projected to be 29 billion over the next decade. It’s just one of many taxes implemented as part of Obamacare.
“When a doctor won’t take Medicare because the reimbursement is too low my parents have been hurt.”
The end game (assuming the reduced reimbursement rates aren’t done away with) I think is that (the next Dem administration) will impose more draconian penalties on doctors to force them to see medicare patients. Doctors will then have to charge more to non-medicare patients; premiums will go up in the vestiges of the private market. Democrats will blame corporate greed and market failure as the private insurers raise premiums and/or demand more subsidies, while more and more people end up in medicare or medicaid, causing a vicious cycle.
This, I think, is how they will get us to a single payer. The postmodern definition of a market failure: when private producers can’t compete with government agencies that force retailers (here doctors) to patronize their (government) competitors at below-cost prices.
Indeed, fully agree.
Which proves my point that this is bad news for productive white people. I think a lot of productive white people would have liked to disentangle healthcare from employment for a lot of reasons (what if I get too sick to work, what if I want to take a risk and start a business), but none of these bills do shit for them.
They are all subsidies from the productive to the unproductive. Or if you want to be even more cynical about it subsidies from the middle class to medical providers selling snake oil on the margin (who were going to treat the poor for free anyway, now they get reimbursed).
Single payer wouldn’t have been a terrible idea…40 years ago. Single payer is OK at keeping cost trend 2% lower due to bargaining power (a good thing if nearly all marginal revenue increases in medicine and subject to harsh diminishing returns), but its not like any single payer country ever shoved a 30% price decrease down anyones throat. So all the above average cost trend we’ve had since the 70s is water under the bridge.
If your a middle class white person I suggest defending employer based health coverage and Medicare (if you have parents you care about) with all you’ve got. Oppose all other expansions of care as a zero sum competition with your own.
Whatever coverage anyone might give you will no doubt be means tested and require you to shed all your assets/income in exchange for coverage anyway, which is no improvement over the current system were you to lose your job.
The largest loophole in our tax code is the ability of employers to deduct the cost of health insurance provided for employers who do not have to count it as income. A free market advocate who respects basic accounting would surely call for changing that subsidy, wouldn’t they?
If they got rid of employer deduction it would likely just mean a net reduction in compensation to middle class employed and the extra tax revenue would be spend on some government boondoggle. The middle class should defend this deduction with all its got.
BS
“They cut Medicare (old white people) to pay for the ACA (poor brown people).”
This is simply disgusting racism. You should not be allowed near decent human beings. Not to mention you seem to have an aversion to facts.
Here is one; Poor brown people are on Medicare.
Here is another: The largest group of people on Medicaid are white.
I could link to facts to prove that, but even typing a response to a person like you makes me feel ill.
Here is hoping that wearing that white sheet in the summer gives you an incurable heat rash.
Actually a dark colored sheet would be more conducive to heat rash.
On net, Medicare is a whiter program because the 65+ demo is whiter. Also, Medicare is for everyone, not just the poor. My parents are on Medicare, any cut to Medicare hurts them. Cuts to Medicaid don’t affect them at all.
Proportionally, blacks are poorer relative to their share of the overall population, and whites are less poor relative to their overall population. This is an example of a useless statistic, whites are going to be the majority of nearly any category because they are the majority of citizens.
Funny how they have to compare to current law when their characterization of current law is so wrong that wrongness is why we are doing this.
The disingenuousness is asserting the problems with healthcare is too high premiums, too high deductibles, too high cost, and too few insured, and then proposing to increase them. If they want to make a case for fiscal responsibility, then they should be making that one. If they want to make a case for tax cuts for the top 2%, then they should be making that one. They shouldn’t propose ‘solutions’ that exacerbate what they claim are the problems.
Also, while the removal of the mandate will increase the uninsured, the largest increase would be among medicaid as they are cut and told to buy plans that they can’t afford. The removal of the mandate just worsens this as the healthy drop insurance and wait until ill to buy, which only destabilizes the market more.
The tax cuts “for the top 2%” are (I expect, I honestly don’t know) either cuts in capital gains or corporate taxes or in income taxes, no? In any case they mainly amount to a reduction in tax on saving and investment. You are right that it can’t be billed as a ;fiscal responsibility’ policy. This is essentially a ‘pro-growth’ policy.
Cuts on entitlements do need to be made, and at least partially used to reduce chronic deficits. But if I were a cynical Republican politician who wanted to rationalize this kind of policy (essentially using cuts to entitlements to try to stimulate economic growth at the expense of the budget), I’d refer to the Krugman/Noah Smith argument (that I don’t actually believe): with the economy growing ad infinitam, it doesn’t matter how much we run up the debt as long as economic growth matches or exceeds the rate of growth of the debt.
That is not what Krugman says(don’t know about Smith).
What Krugman says is that the only important part of debt is debt service. Inflation will take care of the principal.
Our debt service/GDP is the lowest since before WW II.
Sovereign nations are not people and or businesses.
Econ 101.
What do you think is going to happen when interest rates go back up (as they must eventually)?
Oboy
Another person who think our federal debt is in variable interest rate bonds.
Umm, you need a bond calculator?
Here’s one:
“Also, if S&S are concerned about the measure of debt, then we can easily make them happy by simply buying back debt at a discount when higher interest rates cause bond prices to fall. Any bond calculator will show that the price of the long-term bonds issued today at record low interest rates will plummet when interest rates rise, as is generally projected. (Certainly as predicted by S&S.)
If we buy these bonds back at 50 to 80 cents on the dollar in three or four years, we can shave hundreds of billions, possibly trillions off of our debt. This would be a pointless exercise since it would leave our interest payments unchanged, but it should appease the gods of people who worship debt to GDP ratios (a group that apparently includes S&S).”
http://www.cepr.net/index.php/blogs/beat-the-press/the-strange-attack-of-jeffrey-sachs-on-paul-krugman
Is he simply referring to 50-80 cents on the dollar relative to now or relative to when the debt was originated? And am I to believe that if the US started buying back bonds at a discount, that this would not quickly drive up the price of bonds?
Also, the CBO estimates the cost of servicing the debt to go up consistently and significantly going forward into the foreseeable future.
https://www.cbo.gov/publication/45684
That’s from 2014, I didn’t bother to look for anything more recent.
@EMichael – That’s interesting and I had not seen it before. I can see that this effect would mitigate the expense of rising interest rates, but I don’t believe it means there would be no problem. It seems almost certain that we will continue running big deficits, and when interest rates go up, those deficits will cost more.
By the way, your answer would have been much better if you had left out the snark…
I read a blog post a long time ago by Smith making that point before or after reading something by Krugman, and in general I tend to conflate the two.
“Inflation will take care of the principal.”
Not if the principal grows faster than inflation. And the cost of servicing the debt at any given moment isn’t that important as it depends on interest rates, which in the long run vary and aren’t predictable. Debt as a fraction of GDP is a better indicator of long run fiscal shape.
What matters is whether economic growth keeps pace with the rate at which the debt increases. I mean I guess inflating away the debt while at 0% growth is viable if your government doesn’t plan on doing much more borrowing in the foreseeable future, though usually countries approaching 0% growth tend to run larger deficits.
#2 Why does that mean single payer? There is no Democratic consensus on that. See California, for example.
#3 Death panels!! Who knew?
Great comments on a lot of health care substance.
“I am not convinced that there are many Americans who want to make choices and trade-offs when it comes to health care. When it comes down to it, they would rather have government make those decisions for them.” << Libertarians thinking folk DO want to make these choices is the biggest blind spot.
What most folk really want is a low cost health care that is usually "good enough", with some 2 or 3 higher priced, higher quality plans available (like private rooms rather than shared). They want gov't to define and enforce good enough, at a low cost (with the rich subsidizing the poor).
A commenter noted that most people hate the health savings account idea; this is probably true. It would be interesting, but politically unlikely, to find out how much savings would have to be subsidized in order to get 51%+ of the people to do heath savings. If young healthy folk were required to save for their own health costs, rather than "insurance" for older sicker folk, it's possible such a requirement would be less hated than required insurance. With essentially the same money flows, tho with different accounting / rhetoric.
A LOT more talk needs to focus on how some 50% of med care goes to older than 65 folk in their last year of life (what are the numbers? ages, sexes, money amounts).
How much was spent on Ted Kennedy in his last 12, last 18 months?
Agree that there’s a lot of spending in the last year of life, but at times there’s the problem that you don’t actually know it’s the last year of life until they die.
There are certainly lots of cases of an end-stage cancer or heart failure patient spending a month in a medical ICU and then dying (racking up a huge bill). Those are the type of situation than can be foreseen.
There are also cases in which a stage 3 or 4 lung cancer patient gets a bevvy of treatments (surgery, chemo, radiation) then dies six months after diagnosis.
It’s a decision taken under uncertainty (and no small amount of emotion). It still needs attention, but it’s less cut-and-dried than is sometimes presented in the media.