The American Medical Association this week began a television ad campaign, lambasting Republican Senators who failed to prevent the July 1 automatic 10.6 percent Medicare physician fee cut.
In the one-minute ad, AMA President Nancy Nielsen says, "A group of Senators decided it was more important to protect the health insurers than seniors."
Just as Robert Laszewski predicted here last week, the doctors are coming out in full lobbying force.
But wait. The Association of Health Insurance Plans is also running ads filled with nice looking seniors saying that to protect seniors Congress must protect the Medicare Advantage program.
Who is a senior taking 10 prescription medications for six chronic diseases with a calendar full of doctor’s appointments to believe?
Here are the ads.
It’s too bad that Private Fee For Service (PFFS) Medicare Advantage, which has nothing to recommend it from a public interest perspective, has begun to tarnish the reputation of standard Medicare Advantage. The traditional program needs some tweaking, but is basically sound and adds value both in additional care management services and additional benefits. For years a few HMOs were able to maintain Medicare enrollees and provide additional services at no additional cost to the government. But even if there is a small additional cost, that may be justified as well.
If an HMO has to take in a dollar or more in additional premiums (over and above traditional Medicare) in order to reduce the member expense by a dollar, then I think we can all agree that this is an unfair situation. Essentially, the government is providing people with an additional subsidy just to join a private health plan and there is no value added from the health plan. However, if there is a multiplier effect then that changes the situation. In some cases, I think almost all of us would agree that it’s fair for CMS to pay more for the HMO. For example, if CMS paid Medicare Advantage plans on average $500 more per member than it pays for the traditional program, but the out-of-pocket costs are $1,000 less on average per member, then isn’t this a good deal? Assuming that the quality and access to care are the same, shouldn’t the government out of public interest encourage people to join the private plans in that case?
I am sure that analyses have been done to determine the return on investment of additional investments in Medicare Advantage, though I don’t recall seeing any.
However, it’s clear that the new PFFS will not show a good return on investment. Care management is minimal. FFS payment is used just like traditional Medicare so that incentives are screwed up in the same way regarding under-utilization of preventive care and over-utilization of high-end specialist care. On top of that, private plans have additional sales and marketing and other admin costs, and on top of that there is the need to bring a profit. PFFS is a money-making scheme that returns less than a dollar in benefits for every additional dollar in premium. It’s a boondoggle of a program that deserves to die, and will die. AHIP would be wise not to expend political and financial capital defending it, particularly now that Democrats are poised to make big gains. Democrats know that the point of PFFS was to privatize Medicare generally, and there is a bull’s eye painted on it. By defending it, AHIP just increases the determination of Democrats to slash Medicare Advantage in a case of guilt by association.
I think this is the AMA ad (the NH version, at least): http://ondemand.streamernet.net/amamedia/PicnicNH.wmv
I’m not sure that AMA video is the TV ad – that’s more Nielsen’s message to AMA members.