As I read the report that the Peterson-Pew Commission on Budget Reform released yesterday, http://bit.ly/9MJxr9 two recommendations caught my attention:
“A permanent freeze on payments to [all] Medicare physicians
“Increase Medicare retirement age to 67”
The first proposal offers a crude solution to a problem that the Affordable Care Act addresses in a far more intelligent way, giving the Secretary of Health and Human Services the discretion to raise payments for “undervalued services” and lower payments for “overvalued services.” The truth is that Medicare underpays many doctors, particularly primary care physicians, geriatricians, palliative care specialists and general surgeons. This is one reason why we have a serious shortage in these areas. At the same time, the Medicare Payment Advisory Commission has pointed out that we over-pay for certain services, and because they are so lucrative, they tend to be done too often. Past experience shows that when fees were trimmed for certain imaging services, volume leveled off.
As for lifting the Medicare retirement age to 67, does the Commission realize how many uninsured 62--year-olds are hanging on, counting the days and months until they turn 65? Gathering the votes to pass the second proposal would mean going up against every lobby that protects older Americans.
The Draft of the Co-Chair’s Proposal
Late yesterday afternoon, I saw a much more detailed document--the “Draft Co-chair’s Proposal” for addressing the deficit. http://bit.ly/ajfG8p The authors begin by touting the Commission’s report as a “sensible, real plan” that “requires shared sacrifice.” But as I began reading the section on healthcare, it didn’t take too long to figure out who would be making the sacrifices: sick seniors and doctors are expected to offer themselves up. The health care corporations that feed at the trough of an extravagant health care system are barely asked to contribute. Indeed, the Peterson-Pew report calls for slashing taxes for corporations from 36 percent to 25 percent.
Let me just say this upfront: one doesn’t have to be a political savant to know that the Peterson-Pew report is not going to fly. I don’t care if a committee from The New York Times editorial board calls it an “important document.” As Bloomberg News put it today “This will never happen.”
This report is, I’m afraid, another one of those grand symbolic gestures that conservatives use to stir unfounded fears, while confusing the issues. Nowhere does the report acknowledge that the Affordable Care Act already has addressed runaway Medicare spending.
No doubt you have heard or read that there are no cost savings in the reform legislation. This is simply untrue. Here are the facts: The ACA reins in Medicare by a) reducing overpayments to Medicare Advantage insurers; b) trimming subsidies for hospitals that treat a large number of uninsured patients (because there will be so many fewer uninsured, they won’t need as much help); and c) slicing annual increases in payments to hospitals, nursing homes and home health agencies by 1% with an eye to spurring greater efficiency. (The Medicare Payment Advisory Commission offers persuasive evidence that when hospitals are under financial pressure they can and do cut waste.) Those three items alone save $354 billion, without cutting benefits or reducing payments to doctors. These are not “hoped-for” savings. These are firm figures. All told, the Congressional Budget Office has estimated that after adjusting for inflation , “Medicare spending per beneficiary would increase at an average annual rate of less than 2 percent during the next two decades— about half of the roughly 4 percent annual growth rate of the past two decades.” http://bit.ly/5arakc. And that estimate doesn’t include the dollars that Medicare reformers expect to save as they move away from fee-for-service, changing how we pay for care, and how it is delivered.
Looking only at the cuts that we can count on, Medicare’s Trustees have said that the reform legislation puts Medicare on the road to financial solvency –while limiting co-pays and beefing up benefits. http://bit.ly/dmgp2f
Presumably reform’s opponents hope that the public--and even some physicians--will confuse the Peterson-Pew Commission’s recommendations with the Affordable Care Act (ACA) and assume that the ACA calls for the same Draconian measures. But the Commission’s document, “Getting Back Into the Black” has nothing to do with health reform legislation. In fact, it largely ignores the ACA, pretending that it never happened.
Under the Peterson/Pew Agenda, Who Would Pay?
Begin by considering the changes the Commission’s Co-Chairs call for over the “medium term”:
n Pay doctors and other providers less, improve efficiency, and reward quality by speeding up payment reforms;
n Increase drug rebates. (The proposal would require rebates for brand-name drugs as a condition for participating in Part D, Medicare’s prescription drug program).)
n Pay lawyers less and reduce the cost of defensive medicine by adopting comprehensive tort reform
n Expand cost-sharing in Medicare to promote informed consumer health choices and spending
n Expand successful cost containment demonstrations
n Strengthen IPAB (the Independent Payment Advisory Board)
At first glance, recommendations to negotiate with drug-makers for rebates, and reward quality and efficiency sound promising And, as a matter of general principle, many people would like to see lawyers paid less. Moreover, as regular readers know, I like the Independent Payment Advisory Board. (IPAB is charged with recommending ways to make Medicare more efficient, without cutting benefits or lifting co-pays for seniors. These savings also are not included in the CBO’s calculations. )
But flip to the chart on page 33 of the Draft to see how much will be saved in each category, and your enthusiasm may wane. The co-chairs predict that by expanding cost-sharing for Medicare seniors, capping reimbursements for catastrophic care and eliminating first dollar coverage under Medigap, the country could reap $23 billion over the next 10 years, and an eye-popping $135 billion over the decade that follows. By insisting that Medigap charge co-pays for certain essential services, the Commission hopes to reduce the number of seniors who seek those services. And on this point, the Commission is right. Research shows that higher co-pays and deductibles mean that patients defer care--including much-needed preventive services.
By contrast, rebates from drug companies are expected to save just $11 billion between now and 2020, $59 billion over the next 10 years--well less than half of what Co-Chairs expect to squeeze from Medicare beneficiaries. I guess they don’t expect the government to bargain too hard with Pharma.
Meanwhile, the Commission’s staff estimates that comprehensive tort reform will bring in only about $10 billion in the first 10 years, and $64 billion in the next decade, again less than half of what seniors will kick in by paying more out of pocket-- and accepting the fact that, if catastrophe strikes, there will be a limit on how much help they can expect. (Here, it’s worth noting that median income for the average senior is just $20,000. That includes Social Security, pensions, investment income, and wages. Half earn less than that.
And when it comes to tort reform, what the report doesn’t mention is that the bulk of the saving $64 billion will come, not from malpractice lawyers, but from the victims of malpractice who will receive smaller awards. Again patients pay. The Commission recommends capping payments for non-economic damages --i.e. the anguish a patient experienced when a surgeon removed the wrong breast--which meant that she then had to go back for a second surgery to remove the other breast. The Commission also would put a lid on “punitive damages” meant to punish recklessly irresponsible physicians.
In addition, the Co-Chairs Draft would save $55 billion over 20 years by increasing cost-sharing for Military retirees under Tri-Care; while reaping $89 billion by capping federal payments for long-term care for Medicaid patients. It is not clear how the latter proposal would work. In order to qualify for Medicaid, a senior must first spend most of his savings. If we put a limit on how much Medicaid will spend on an his long-term care, what do we do when an 85-year-old suffering from Alzheimer’s maxes out? Tell him he has lived too long? Tell his wife that she must take him home and figure out how to care for him herself? His wife is dead, you say, and most of his friends have passed away? He should have made more friends. It’s a matter of individual responsibility.
As for the “sacrifice” expected from physicians, the Draft calls for freezing Medicare payments to physicians next year, and then reducing them “modestly” every year from now through 2015. After that, “the way we pay doctors would change.” Anticipated savings: $44 billion over the next ten years, $276 billion over the following ten years. In other words, physicians are expected contribute four times more than drug-makers.
Finally, nowhere does the Commission’s report discuss improving the quality of care while reducing the cost.
This may be because billionaire Pete Peterson is much more interested in slashing “entitlements” such as Social Security and Medicare than he is in getting better value for our healthcare dollars. Reducing the deficit may be only an excuse for what I can only describe as a mean-spirited goal.
I have been watching Pete Peterson for more than twenty years. The man has never seen a grandstand he doesn’t want to climb, and for decades he has been using that stage to preach about the selfishness of greedy geezers. Back in 1988, when he wrote On Borrowed Time, he made it clear that he considered entitlement programs to help older Americans “immoral.” http://bit.ly/aXLHoe Distorting the words of medical ethicists such as Daniel Callahan, Peterson suggested that “ 'the elderly, after all, have already accomplished and enjoyed most, if not all, of what they can reasonably expect in life.” In fact, Callahan does not suggest that we should skimp on Medicare and Social Security payments, raise Medicare payments or “cap” long-term care for the elderly. Callahan is concerned about pouring health care dollars into futile end-of-life care that “provides neither comfort nor cure.” The fact that Peterson himself is an octogenarian doesn’t seem to faze him. After all, he can pay his own way. This means that unlike middle-class 80-somethings, he is “entitled” to live as long as he likes.
Peterson also likes to set the generations against each other, arguing that the American concept of ''entitlement'' is “inherently prejudicial against the young.” What about the idea that American children are entitled to a free public education, K-12? I can remember a time when older Americans complained bitterly about the billions that this nation was lavishing on the young. Building schools for boomers cost a bundle. Generous government loans and scholarships to help college students, medical students and grad students seemed, to some, an unfair use of “their” tax dollars. Why, some asked, should childless adults have to pay property taxes that helped fund local schools? Because we are all part of one community, and it “takes a village” to care for children-- or for the elderly.
Back in 2000, the U.S reported a surplus rather than a deficit--an estimated $230 billion that year alone, plus roughly 4.5 trillion worth of surpluses that the CBO projected over the next decade. Nevertheless, Peterson was still railing on about how much Social Security and Medicare would cost our children. At the time, he wanted to apply the entire surplus to the national debt. (Other wanted to use some of the money for social programs or tax cuts. Al Gore suggested reserving one-third of the surplus for a “rainy day” fund.--so that we could continue to meet our obligations in the hard times that were, in fact, right around the corner.)
That Peterson was ranting about the cost of Medicare and Social Security even when he didn’t have a deficit to gnaw on is telling. As James Ridgeway writes on The Unsilent Generation, “The granny bashers’ read agenda, of course, is to cut the social safety net programs that they have long abhorred–but they have gained far more ground with their intergenerational inequity claims than they ever would with a straight-out attack on Social Security and Medicare.” http://bit.ly/bVxKv6
Let me suggest that at a time when liberals and conservatives are engaged in hand-to-hand combat, stoking the fires of intergenerational conflict is a truly terrible idea. A society can withstand only so much pressure before it cracks
This entry was posted on November 11, 2010 at 8:00 pm, and is filed under Health. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site.
0 comments:
Post a Comment