OP-ED

Nope. Won’t Happen.

Friday, June 18, the Senate aproved a plan that blocks a 21 percent cut in Medicare payments to physicians; the axe was scheduled to fall that day. Leadership on both sides of the aisle pushed for the reprieve; it will remain in place for six months. The measure will now need to be considered by the House, which in May approved a fix that would last longer. If the House agrees–and it is all but certain that it will–the 21 percent cut wil be replaced with a 2.2 percent pay hike. The bill will not add to the deficit. The proposal is fully offset by changes in Medicare billing regulations, antifraud provisions and the tightening of some pension rules, eliminating Republican objections that it would push the federal government deeper into debt.

In six months, Congress will have to consider the matter once again, just as it has ever year since 2003. This is the third time this year that Congress has averted Draconian cuts to physician’s payments. What, you might wonder, is going on? Here is the backstory: in 1997, Congress enacted a so-called “sustainable growth rate” (SGR) mechanism to keep Medicare physician reimbursement rates in check. Congress has never allowed the full cuts called for under the SGR formula to take effect and it never will.

Why don’t legislators simply repeal the cuts to doctors’ fees that they have been postponing for years? Why just put off the measure for another six months?

Because too few of our elected representative possess the chutzpah to stand up and say that blind across-the-board cuts were an extraordinarily dumb idea in the first place.

Nevertheless, most legislators understand that this crude solution will never be implemented. They know that while Medicare overpays for some servcies, it underpays many doctors.

The “Affordable Care ACT” that President Obama signed in March recognizes this fact; this is why it provides a 10 percent bonus for primary care doctors (pediatrics, internal medicine, family practice, geriatrics) as well as general surgeons who practice in areas where medical professionals are in short supply. At the same time, Medicare is reducing reimbursements to doctors who have purchased or leased testing eqipment worth more than $1 million for their offices. Reserach shows that in such cases, doctors order twice as many tests, exposing their patients to unnecessary risks.

Nevertheless, physicians who oppose they like to call “Obamacare” will use Friday’s postponement to scare seniors by pretending that a sword still dangles over their heads. “I may have to stop seeing you,” some physicians will say. “This reform legislation is going to lead to a Medicare meltdown.” Saturday, the day after the Senate approved the reprieve, the Washington Post ran an op-ed by Dr. Michael Newman, a clinical professor of Medicine at George Washington University , who wrote as if the postponement were merely a ruse, and that at some in the future Congress plans on enacting a “21 percent reduction [that] will make it prohibitive for many physicians — internists, geriatricians and family practitioners in particular — to continue caring for their Medicare patients. Congress’s annual moves to postpone further cuts in reimbursement amount to budgetary cosmetics that convince no one of the system’s soundness.” http://www.washingtonpost.com/wp-dyn/content/article/2010/06/18/AR2010061804700.html Newman did not mention the scheduled 10 percent bonus for internists, geriatricians and family practitioners, nor did he mention the 2.2% pay increase that replaces the 21 percent cut.

It’s worth emphasizing that health care reform has nothing to do with the SGR formula that calls for whacking Medicare reimbursements.

This ill-conceived law passed in 1997, long before today’s reformers came on the scene. Congress did not attempt to repeal the SGR as part of the Affordable Care Act because conservatives would have argued that this made reform too expensive. But everyone understood that legislators would address the SGR in separate legislation, and now it seems that they are figuring out how to cover the cost of a repeal without adding to the deficit.

In the end, many physicians will benefit from the reform legislation. Granted, some specialists well see reimbursements trimmed for selected very lucrative services. But under reform, all physicians will be eligible for bonuses if they deliver safer more efficient care that leads to better outcomes for patients. And financial incentives that encourage better collaboration among physicians should improve working conditions for many.

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of  “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.

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Categories: OP-ED, Physicians

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50 replies »

  1. The Players and whats up for grabs. Profits United Health Group 2010 $4.293 billion
    Here are some other 2010 budget numbers: Wonder what it cost CMS ( Can’t Manage Shit) to operate each year. $453 billion Medicare/// $290 billion Medicaid ///$78.7 billion Department of Health and Human Services/// UnitedHealth Group Awarded TRICARE Managed Care Support Contract … Jul 13, 2009 … UnitedHealth Group Awarded TRICARE Managed Care Support Contract for more than $20.3 billion. BILLIONS awarded and still to be awarded United’s AmeriChoice unit is the largest government contractor administering state Medicaid programs for the poor and federally sponsored plans for children. AmeriChoice’s revenue rose 34% last year, to $6 billion.
    United Health Group and its subsidiarys must be exhausted from signing Corporate Integrity agreements each and every year and as reward for their violations well what happens? they are awarded more contracts and more money and maybe even an ambassadorship here and there and if anybody should question what the heck is going on, then send them a Elmo doll. (Americhoice sponsors Sesame Street) Up side, Billions to be made, down side pay some fines (cost of doing business) move on and nobody goes to jail or gets excluded from the game. Get up the next day put on your Elmo costume and its back to work as usual. WOW, even in the Casino world or Mob world this would be a no no, suprised Hollywood has not done a movie on this or maybe even great TV.
    Full Name: Wayne Berman Title: Vice-Chair; Finance Co-Chair; Adviser
    Over the course of three years, Berman’s lobbying firm was paid $660,000 to lobby on behalf of UnitedHealth subsidiary Americhoice, a managed care HMO providing health insurance to Medicaid, Medicare, and SCHIP recipients. Specifically, according to the lobbying report, they lobbied on Medicaid issues in the Deficit Reduction Act of 2005. [Americhoice Lobbying Reports 2004 – 2007; Americhoice.com] Berman Also Lobbied For “Absurdly Low” Rates for Medicaid Managed Care Companies to Pay Out of Network Hospitals. Also included in the DRA, and mentioned as a lobbying issue on Berman’s Americhoice lobbying report, was a provision setting rates managed care companies must pay to out-of-network providers — mainly hospital emergency rooms — for care received by Medicaid beneficiaries. Rather than forcing managed care companies to reimburse out-of-network hospitals an amount comparable to network providers, the legislation set the default amount to the state’s “fee-for-service rate,” which often is “absurdly low.” The provision thereby shifted financial responsibility for services to Medicaid beneficiaries from the managed care companies to the hospitals themselves, permitting managed care companies to rake in huge profits, while hospitals incurred added losses. [Modern Healthcare, 1/29/07; Text of S. 1932] To Save Money, Bill Cut Services to Medicaid Beneficiaries, But Left Managed Care Providers Untouched. Under the final budget package, substantial Medicaid spending cuts were achieved by imposing new premiums and increased co-payments on Medicaid beneficiaries; some costs were also shifted to the states, who in return were awarded new powers to drop coverage or reduce benefits to certain beneficiaries. In a letter to Senate Majority Leader Bill Frist, the AARP CEO decried the final bill, saying it “protects the pharmaceutical industry, the managed-care industry and other providers at the expense of low-income Medicaid beneficiaries.” [Inside CMS, 12/29/05; Los Angeles Times, 12/22/05; World Markets Analysis, 12/21/05; The Hill, 12/20/05]

  2. Limo Divers Protest Medicare Mediciad Reform Cuts, It’s rumored this issue could become part of the Tea Party movement. AmeriChoice Health also rumored to take a position on this issue. Recirculate those tax dollars? Help keep limo drivers working, benefits flowing and overpaid tax dollars remain in abuse.
    Medicare.gov as well as other Federal agency’s encourage you to report any fraudulent activities, yet, the same government agency’s were notified the way this company does business yet did nothing. Three years ago they were reported to these Federal agency’s and as of todays date not only were they allowed to continue doing business but were never charged once. Protected vendor status sure, politics sure, limited government budgets sure, Federal and State officals looking the other way sure, and rather then stop these activities a strong desire not to rock the boat previals. Even with the vast changes in the laws, budgets,a hands off policy remains, you tell me what’s wrong with this picture?
    The Government created this monster and now they don’t know what to do about it, like shooting yourself in your own foot etc. Tons of money to advance their national growth, it’s market positions, tons of money for political donations, tons of money to send 75 millIon back to its home office from New York state alone, tons of money to suppot National TV shows, tons of money to pay hugh State fines, tons of money to hire the very best law firms, tons of money to pay for bribes and kickbacks, tons of money for hugh salary’s and bonuses, all done on the back of the American tax payor, you see this company receives all it’s money from the Federal government. Should your tax dollars be held to a higher standard? Should our government agency’s responsible for there review and be held to that same standard? Should the IRS audit their corruption? Why has this company not been charged? How long can the buck be passed here in more ways then one?
    Hey, it’s your tax dollars don’t complain now.. then don’t complain later on…
    ps… I know times are tough for a lot us, but it would be great to have a free limo to go to the Doctors, Pharmacy, Movies, Grocery shopping, and given free tickets for the movies. Offered soda, pop corn and hotdogs, as well as have them receive free coupons for Grocery items…Kind of makes you wish qualified for Medicare and Mediciad right?
    For three years now, a woman has left her home in Poughkeepsie, New York, five days a week and taken a taxi to visit her child at St. Margaret’s Center, a nursing home for disabled children in Albany, New York. Each night, she rides home by taxi. That costs $300 a day. What dedication by taxpayers. That is right. Taxpayers have shelled out $196,000 over the past three years so that she can make this Poughkeepsie-Albany commute each day. Incredibly, state health officials defended this daily abuse of taxpayers. Could not the woman move to Albany? It would have been cheaper to buy her a Cadillac Escalade and have her drive herself. But under Medicaid’s incomprehensibly illogical rules, taxpayers had to give this woman a whopping $65,000 subsidy. We underpay doctors by 20% or more. But one — likely two — cab drivers have a gravy train going there. For New York state, the bill comes to $98,000 — with federal taxpayers shelling out another $98,000.
    Oh and this happens all over the place. Ambulances in Southern West Virginia became taxis as they shuttled people off to the drug store and the like — and then billed Medicaid. New York state Comptroller Thomas P. DiNapoli said the $196,000 taxi drive was part of at least $169 million in misspent funds. “We found the state Medicaid system is leaking millions of dollars,” DiNapoli told the Albany Times-Union. “Safeguards designed to protect the taxpayers by detecting waste, fraud and abuse keep failing.” Taxpayers finance $196,000 ride By CATHLEEN F. CROWLEY Staff Writer Published: 01:00 a.m., Wednesday, December 23, 2009

  3. The entire $2.3 trillion healthcare establishment will suddenly,violently collapse because of the same exact phenomena that cause other industries to suddenly collapse. The historical and scientific evidence is compelling. This industry has reached the catastrophic 4% threshold; sinking below this threshold, historically, has caused massive failure in the industry (1990-1999). For the first time, the real story is now being released to the American people. Extensively proven is the fact that this industry is hyper-sensitive to any small changes that cause the rate of growth to stall and decline.The American people, and the most vulnerable patients-the children, the elderly, and the very sick-are now facing a dread risk. It is the kind of risk that produces the worst possible outcomes.

  4. Here in Ohio we pump our own water. Don’t need any government help for that. food subsidies actually increase the price of food in most cases not decreases it. In NV and many states they set the minimum price for milk. If they didn’t set a floor we would be able to buy it considerably cheaper. Sugar and many other products have import tarrifs to keep competition out and prices artifiaclly high. Thanks again Peter for wasting time with your inaccurate Dogma. Maybe you should try looking some of this up before you make it up?

  5. By the way, walking for cancer research is not sacrifice, maybe an inconvenience. Most of the fresh water is controlled and provided by government and we enjoy some of the cheapest food prices in the world because of government subsidies as well as the ability to grow our own. I’d hate to think what water would cost if private enterprise controlled it.Those government agencies that operate water purification and provisioning services are local. Those services are paid for separately from taxes. You pay a monthly usage fee to your water provider (municipality or other). They are not state or federal agencies and are not generally paid for by tax revenues. In some instances they are “water districts” or cooperatives. In my own instance I source and supply my own water. I do not pay for water service.Government subsidies don’t make our food cheaper, they simply allow small farmers to exist as an entity. Small farmers cannot compete with the large commercial farmers, which as of 1992 supplied 70% of the U.S food supply in most food products. The ever popular grocery store has made food prices quite low compared to other regions in the world. There are a large number of grocery stores which provide the service of aggregating food products in one location. These grocery stores compete heavily with one another. Additionally, the perceived “stigma” of buying store brands (a lower cost version of popular food products) has reduced to a degree that branded food items aren’t as popular in most demographics as once was.

  6. Peter –>
    “Any more than the cost of oil reflects “true” costs? Pollution, global warming, gulf oil disaster, wars in the Middle-east. We all pay cash for oil, yet where is the true cost reflected in the price? Does anything in this economy reflect the true cost? Ask a over compensated specialist if their charges reflect the true cost – I think they’ll say they’re under compensated”
    Pollution and global warming aren’t a “cost” in economic terms, rather they are a potential by-product of a manufacturing process. Indeed, human existence (which itself can be viewed as a production and manufacturing process at cellular levels) generate pollutants and contribute to global warming as presently defined (excrement, CO2, methane, viral components, bacteria propagation, etc…). There is a difference. The by-products only becomes a cost once companies are charged for associated cleanup or when regulations enacted to prevent/limit the creation of by-products affect some unit of the associated supply chain such that the cost of obtaining input materials increase. Or, in some instances, the regulation limits the production amount of a particular product thereby generating an artificial scarcity in the market place. The consumer of products from the company that bares the increased costs will pay for those cost increases via price markups. Medical practice and medical device manufacturing are businesses. They are affected by this principle just the same as a manufacturing or retail services industry. The differences, of course, are in how they are regulated and to what extent. While increased government participation (via regulation and oversight) can insure the fair play of businesses in the market. Rarely does it make things cheaper to create through increased regulation.“Costs include what specialists want to charge, what CEOs want to earn, and hospitals want to profit, why would paying cash make that any different? Look at dentistry, mostly a cash business, yet many, many people can’t afford proper dental work because it is so expensive. Lawyers are mostly a cash business, yet too many people can’t afford proper legal redress.”Costs, to the consumer, include what specialists can charge and still maintain a customer base. Or, in the case of Medicare/Medicaid and insurance agencies, what was negotiated via regulation and contract as a price for services. That is NOT the same, necessarily, as allowing a market system determine the price for the service based upon what the market will support as a price. In this instance, that is because both the regulations and the contract negotiations amount to a relative minority (insurance groups) or the federal government “setting” the price of a service. In the instance of “paying cash”, the price wouldn’t be set by contract vehicles defined primarily by insurance agencies. Instead, prices would be established by those that are the most price sensitive components of the market (the consumer). You cannot charge what cannot receive. Well, you can, but you won’t be in business for long.No, I don’t advocate persons playing “doctor” on themselves, or attempting to defend themselves in a court of law. As you mentioned, the risks of not performing correctly can be dire. However, I don’t see how this affects the cost of a good or service. The costs of hiring a legal or medical professional did not change. You simply chose not to hire them, so you did not incur that cost. This would be an example of how costs affect the consumption of a good or service. Nothing prohibits someone from self-representing themselves in a court of law. It is their right. You also have the right to legal representation at no cost in the case of criminal indictment. The issue of “quality” representation is entirely a different subject.“The payment plan is health insurance, yet that is out of reach for many millions of people.”I’m thinking more along the lines of “store credit”. Again, my desire is to see the product costs to its consumer influenced by the masses of its consumers, not a relative minority (insurance) or governing agency. You have fewer options available to you as a consumer when there are a relative minority of agencies that set prices.There is no way to safeguard a consumer against themselves, even when they make poor decisions (purchasing of ARMs); or mortgage backed securities. Caveat emptor? I don’t see how this relates to medical payment plans. Most likely they wouldn’t be structured like ARMS in any event. More likely, they would reflect simple loans as the kind that were acquired for purchasing appliances and durable goods. As I said, it would require the consumer to make hard decisions about where they placed their capital. Saving for a procedure or saving for a home theater system.

  7. “WOW your so right Peter, 100 TV evangalist are proof that 20 million christians aren’t charitable.”
    I didn’t say they weren’t charitable (did I), I said where’s the sacrifice? But it seems to be a money making enterprise that “20 million christians” blindly support. By the way, walking for cancer research is not sacrifice, maybe an inconvenience. Most of the fresh water is controlled and provided by government and we enjoy some of the cheapest food prices in the world because of government subsidies as well as the ability to grow our own. I’d hate to think what water would cost if private enterprise controlled it.

  8. WOW your so right Peter, 100 TV evangalist are proof that 20 million christians aren’t charitable. Your so smart, I think we should all stop posting and just wait for your postings of wisdow to come down and guide us.
    You have shown yourself to not be very good at math, can you calcualte what percentage of christains the TV Fleecers are then calculate how many Dems have gone to jail the last 5 years as a percentage of Dem office holders? hint your not going to like the answer.
    “You see, most people don’t require the other products, or can choose a less expensive alternative. As has been discussed here before, healthcare is not like every other business.”
    Peter is correct, healthcare is not like food and shelter, people don’t need those. Fresh water, also a luxary we can do without. Gas and electricity is nothing like healthcare. Nothing is like healthcare only giving it all to government will it ever work. Prior to 1965 healthcare didn’t even exist you know!
    Margalit is so right, her Limo driver told her himself how uncomfortable he felt. Where as going down to your local WIC or HUD office is a life affirming event and does wonders for your self esteem getting a basket of food at church is demeaning. Maraglit is obviously a snob that has never been around poor people or taken part in charity. She prefers the hands off approach of spending other peoples money through taxation to feel good about herself.
    I’ll remember next time my family gathers for the cancer walk to tell them Margalit said they where all being selfish and weren’t doing any good. Or next month instead of giving to wounded soliders I’ll just contribute more to taxes so people like Margalit can live better. Having actually helped people with food, shelter, as a boy scout, and through other organizations I can assure you all Margalit is wrong, people do appreaciate the help and we should all keep giving.

  9. “The point of my discussion is that it currently isn’t possible to determine the “true” costs associated with providing healthcare services and related products, because the market prices do not reflect the true costs.”
    Any more than the cost of oil reflects “true” costs? Pollution, global warming, gulf oil disaster, wars in the Middle-east. We all pay cash for oil, yet where is the true cost reflected in the price? Does anything in this economy reflect the true cost? Ask a over compensated specialist if their charges reflect the true cost – I think they’ll say they’re under compensated.
    “Are you saying that because healthcare services/products can be expensive, people wouldn’t consume the “appropriate quantity and type of service” because they couldn’t afford it?”
    Yes because appropriate might be more than they can afford and because people aren’t doctors, and for something as complicated as human disease and healthcare it’s not something most people are well equiped to make self diagnosis and treatment plan. Do you advocate people act as their own lawyer when they have no legal training? People don’t even know how to hire a home contractor, let alone second guess their doctor(s), even if they can afford to pay cash.
    Costs include what specialists want to charge, what CEOs want to earn, and hospitals want to profit, why would paying cash make that any different? Look at dentistry, mostly a cash business, yet many, many people can’t afford proper dental work because it is so expensive. Lawyers are mostly a cash business, yet too many people can’t afford proper legal redress.
    “I believe that the situation could be handled similar to how persons buy a car or home, through payment plans. Or, if the condition permits, you could save for it.”
    The payment plan is health insurance, yet that is out of reach for many millions of people. And the payment plan just doesn’t involve the risk of paying premiums, it involves the unknown but real risk of co-pays and deductibles while still being able to keep your job and pay your premiums to keep your coverage. When did your car or house payment increase by compounding 6% to 10% per year? Oh wait, it did just happen in housing when ARMs became due and people could not afford the mortgage increases, so they lost their homes – but at least they didn’t die.

  10. Peter ->
    The point of my discussion is that it currently isn’t possible to determine the “true” costs associated with providing healthcare services and related products, because the market prices do not reflect the true costs. If the one goal of this legislation is to make “healthcare affordable to the public”, then costs are but one component of healthcare. I’m focusing on costs, as that is a major, determining factor in market based economies. I would think it a good idea to have a consumer pay for their healthcare directly. I can think of no better way to expose the true costs of healthcare.You mentioned another component “proper healthcare”, which I’m assuming to me the appropriate quantity and type of service/product. Are you saying that because healthcare services/products can be expensive, people wouldn’t consume the “appropriate quantity and type of service” because they couldn’t afford it?I believe that the situation could be handled similar to how persons buy a car or home, through payment plans. Or, if the condition permits, you could save for it. Granted, that would require the consumer to make choices about how they used their resources that they wouldn’t ordinarily like to make (i.e. save for lasik or outfit a home-theater, payments for an emergency appendectomy/cancer treatment/etc… over time mean I’ll have to keep the old car running longer). If a hospital wanted to compete with another hospital, it would have to compete based upon the quality of its service and its cost. From my understanding, shopping hospitals based upon costs isn’t the prime consideration. Today people will pick a hospital based upon what insurance (if they have it) the hospital accepts and whether their doctor (if they have one) operates with that hospital.
    Margalit ->
    “So here is something about charity, Christian and otherwise; it does not work. Well, it does not work for those on the receiving end. It destroys today’s recipients and future generations too. Charity is humiliating, demeaning and aimed at gratifying those who give to charity and maybe even make up for other unrelated misunderstandings they may have with their maker, thus the connection to church.”I’m curious as to how you arrived at that conclusion. Charity whether given voluntarily from one person to another (via direct means “person to person” or indirect means “united way, religious orders, etc…”) or involuntarily (via government sponsored programs funded through asset seizure [taxes]) makes no difference to the receiver. In either case they still realize that they aren’t able to conduct their lives without that support.The benefit of voluntary charity is that it does not engender ill will or contempt for either the collector (entity who seizes assets from the person) or the receiver of the funds (i.e. the “why can’t they get a job” sentiment). It is important to realize that all governments are incapable of producing wealth. Therefore, they must seize that property from others in order fund their programs. Taking what is not yours always upsets the person from which it was taken. I’ve yet to hear anybody look forward to tax time.

  11. One more thing, Tom.
    “By 1950 or so “we” had pretty much decided that families s/would not be left to fend for themselves, at least their employers would help out.”
    Let’s set things straight. Employers are not magnanimously “helping out”.
    Every dollar spent on health care in this country comes out of the wallets of working folks. Be it cash, reduction of wages, premiums, deductibles, co-pays and other out-of-pocket schemes, plain taxes and higher consumer prices. Every single dime is passed on before it’s even spent.

  12. Oh boy….
    Christianity and charity…. Yes, Tom, very Jeffersonian indeed. This is not about big versus small government and I seriously doubt that Mr. Jefferson, if he was alive today, would support the conservative agenda. On the other hand I can see Mr. Hamilton and his banking folks align right very nicely.
    So here is something about charity, Christian and otherwise; it does not work. Well, it does not work for those on the receiving end. It destroys today’s recipients and future generations too. Charity is humiliating, demeaning and aimed at gratifying those who give to charity and maybe even make up for other unrelated misunderstandings they may have with their maker, thus the connection to church.
    It is a national disgrace every time a Veteran or his/her family must avail themselves of charity in order to survive. We should all feel humiliated and demeaned. We should feel the same when American children go to bed hungry. And the solution is not to throw a few coins at their feet on our way to Church on Sunday.

  13. “The best way to insure the optimal operation of any business (meaning reduction in costs through gained efficiencies) is to insure that the business is able to receive feedback from the market. Currently, that is not the case. The consumer of the service and product is often not able to provide that feedback.”
    So your solution would be for everyone to pay cash? That certainly would provide feedback, but not necessarily proper healthcare to everyone who needed it. You see, most people don’t require the other products, or can choose a less expensive alternative. As has been discussed here before, healthcare is not like every other business.

  14. I wonder why it is the seemingly automatic response for the modern day citizen to accept, as a solution, government (directly or via its agencies) regulation over some activity/process/operation/event that has been proclaimed “broken” by either some, few, or many. I can understand the desire for political “types” to desire such regulation as it would place control over non-trivial issues squarely in the lap of the governing bodies. While there are certainly many “issues” with health care in the U.S., it would seem the one that is getting the most attention is “cost”.My understanding of the legislation for Medicare and Medicaid was that it was to be able to provide money (subsidization) to health care providers on behalf of those who could not afford the cost of health care out of pocket. The problem, obviously, is this didn’t work as intended. How can we in good conscious create new legislation to succeed where the previous failed, without first understanding the failings of the previous legislation?I think it is instructive to understand that Health care, first and foremost, in the United States is a business. All businesses MUST make money to continue to stay in business. This is true of both service and manufacturing businesses. Regulations that are designed to keep markets free and fair (structure of the market) while exerting minimal control over the market “players” are much more effective and successful in cost control than regulations that exert high control and constraints over the market players. The costs can more accurately be associated to the development and delivery of products and services by themselves in the former, while “artificial” cost adjustments must be made in the later to accommodate regulatory compliance (artificial in the sense that those adjustments wouldn’t exist without regulation). At some point, the true costs of a product and service are so far removed from the consumer that the suppliers have no need to drive costs lower. You could arbitrarily stipulate that what service/product costs $X today must tomorrow cost $X-n (n being some modifier). While a great idea, there wouldn’t be a reliable means of determining what value “n” should be, or even if $X-n is a true figure. If no one has an incentive to actually reduce their costs (because their business no longer depends upon efficiency) to provide a product/service, then $X would always be the cost.The best way to insure the optimal operation of any business (meaning reduction in costs through gained efficiencies) is to insure that the business is able to receive feedback from the market. Currently, that is not the case. The consumer of the service and product is often not able to provide that feedback. It is being filtered by insurance companies (payers of services and products) and by regulation (medicare et.al.). This is an untenable situation in which the consumers of a product and service are not able to provide market feedback to the suppliers of the service or product. In nearly all other aspects of our economy (save a few) this situation is not the case. Those segments of the economy operate quite efficiently.

  15. “Christianity and its charity are all about personal sacrafice, this is the anti-liberal perspective where charity is giving away other peoples’ money via government wealth redistribution. The right and christians do a far better job and do it far more efficently taking care of the community then the left and their government programs.”
    Yes, it’s all about “sacrifice”??? The biggest liars (and hipocrites) are the “christian right”.
    http://www.inplainsite.org/html/tele-evangelist_lifestyles.html

  16. Dear ExhaustedMD,
    Just making sure you understand I never said easier is better…
    Nate, Christianity and its charity are about more than personal sacrafice, even (or perhaps especially) for Puritans. Read the oh-so-very liberal Popes since Leo XIII.
    > Medicare was passed by liberal lies
    Liberal liars — I don’t know how a lie can be liberal. In any case, lying was (and is) easier, now see above.
    > We are headed the opposite way of the
    > rest of the world.
    It looks to me like everyone is changing the private/public mix to some extent. Sure, we’re moving to “more public” and others are moving to “more private”. Fine. But look where we’re starting from and where they’re starting from.
    t

  17. Tom I would strongly diagree with the way you apply 1 and 3.
    “There is also the influence of Christianity in the US,”
    Christianity and its charity are all about personal sacrafice, this is the anti-liberal perspective where charity is giving away other peoples’ money via government wealth redistribution. The right and christians do a far better job and do it far more efficently taking care of the community then the left and their government programs.
    More christianity in our nation would solve many of our problems, not something your going to see the left rally behind.
    ” It was an easy step from there to Medicare.”
    Medicare was passed by liberal lies and a complacent if not proactive media. Even Democrats at the time said the public was hoodwinked. This was a very important fact the media hid then and hid again this time around. Now that the bill has passed it has become obvious Demiocrats lied just as much about this bill as they did when they passed Medicare.
    ” Every other developed economy.”
    This is far from true, other developed economies have systems based on private insurance with far less government regualtion. Obama is trying to drive private insurance out of existance while most other developed economies are actually moving towards more private insurance. We are headed the opposite way of the rest of the world. Look at the proposals in Canada for example, we know Obama’s model is a failure we have the rest of the world running away from it.

  18. “It is foolish to dismiss opinions simply out of hand whether you agree or disagree with the notions”, as said above by ciphertext. Well written, but obviously not well answered. And why?
    Again, welcome to Maggie Mahar world, that is run by out of touch and uninterested in the needs of the public Democraps who are screwing up other things besides health care, not that the Republicants can do any better.
    And you have to love Tom Leith’s answer to ciphertext that was addressed to Mahar to respond: “activists find it easier to lobby one Federal Government than to lobby fifty state governments…” Is easier always better? No sir, it is not. Thanks once again for the stupid validations to why this legislation is beyond repair!!!

  19. ciphertext:
    1) This is a complicated question. I suggest Paul Starr’s book “The Social Transformation of American Medicine”. It speaks to more than just this subject. There is also the influence of Christianity in the US, which isn’t quite the same as in Europe but it is there. By 1950 or so “we” had pretty much decided that families s/would not be left to fend for themselves, at least their employers would help out. It was an easy step from there to Medicare.
    2) This is my question. I think the answer lies somewhere in here: activists find it easier to lobby one Federal Government than to lobby fifty state governments, so that’s what they do. Congressmen want to be seen to be “doing something”. Jefferson is revered in theory, but Hamilton rules the day.
    3) Every other developed economy. Check out The Healthcare Economist’s series on International Healthcare Models at http://healthcare-economist.com/
    t

  20. –>Maggie,
    I’m sorry you were not able to view the NY Post article, the link worked for me today as well. Perhaps you could try again? The author of the article is Scott Gottlieb and the title of the article is “You’re losing your plan
    ObamaCare’s true face emerges”. It doesn’t appear to be from the “opinion” section, rather from the “columnists” section.
    Yes, the WSJ is an OP-ED. That doesn’t automatically disqualify the article as “junk” as you seem to imply. It does require one to view the article from a different perspective. As so many things in the political realm, perception is (or soon becomes) reality. It is largely opinions that drive public policy debate in the first place. There is no mechanism in place that allows for the creation of regulations and laws on the basis of “facts” alone. Rather it is somebody’s opinion (or somebodies) that a regulation or law ought to be enacted. It is foolish to dismiss opinion simply out of hand whether you agree or disagree with the notions. For it is in those notions that you may either find your allies or enemies.
    Currently, it is the “left’s” view that health care reform should occur in a fashion that incorporates government control and regulation in a manner as has been passed through legislation. There are other ways to enact health care, specifically ones that aren’t dependent upon the heavy hand of government.
    My questions are these:
    1) When did it become the government’s responsibility to provide medical care (in the most drastic sense) or even to manage payment for medical services (in the least intrusive scenario) for all of the governed?
    2) Supposing the responsibility was determined, then why would it be a responsibility of the federal government and not one of a local or state government?
    3) In what other economies and political institutions around the globe institute the level and measure of control over the health care industry as will be enacted in our country?

  21. It’s just ideological claptrap to blame a bipartisan compromise that created a flawed payment scheme on a President who was elected three years later. It wasn’t merely Bush but Obama who has booked “savings” that will never be realized. AND the “bipartisan” Congressional Budget Office who ignores the fact that the savings will never be realized in their annual deficit forecasts. This is a completely bipartisan policy failure. . .
    It’s just bloviation, Maggie, not “facts”. You’ve got a remarkably unidimensional view of the world. It’s tiresome.

  22. Unlike you Nate, I see insurance as the probolem, not the solution. Whether or not health insurance exists does not get rid of the risk, insurance just accepts what part of the risk they want to take on. If we had single-pay then we would determine what we will pay, not providers that you yourself admit perform,
    “Excessive treatment and excessive cost per treatment”, something the insurance industry is all too happy to pass on to the rest of us. In fact you have boasted how you fight the insurance industry every day and that they are over paid with too much overhead and provide little service for premiums.

  23. no peter they have caps becuase they must define their risk. It is hard to reserve for infinity. Caps use to be an afterthought and marketing gimic, they would up it to 2 million becuase it didn’t cost any thing, it was just a number on paper and some extra reserves in the bank, not a bad problem in the 90s with 30-50% stock market returns. Funny thing happened though providers took notice of these open wallets and started hitting them. This is recent occurance, 5-10 years ago this wasn’t an issue.
    Now that you have managed to take all side of the debate peter care to pick one?
    What provider billing controls do you refer to? Is this a new Medicare type fix your working on? Some magic proposal that will make all the numbers balance? Regualting the price of insurance doesn’t control cost of healthcare it just drives everyone out of business, See NE for 2-3 examples of how well that works.

  24. “In reality no lifetime caps actually increases insurance carrier profits”
    I guess that’s why they have caps, to reduce their profits. Sure, no caps would cost us more, but lower prices, price regulation and provider billing controls would save us much, much more.

  25. How do Caps protect insurance profits Peter, hint you don’t appear to undertstand how insurance rates are set, something you might want to get your head around before running at the mouth.
    In reality no lifetime caps actually increases insurance carrier profits, an example of why people that don’t understand insurance shouldn’t be designing and regualting it, they make mistakes like you do

  26. How incredibly lame, that USATODAY writes misleading stories, and makes this one it’s lead for Monday.
    Again, another validation about your true agenda, ma’am!
    Do you have a soul that is going to be redeemed? Or, are you just oblivious to the realities that go on around those who practice as health care providers? Doctor in INCREASING numbers are dropping Medicare patients, or just plain dropping out as Medicare providers as a whole.
    Ms Mahar, when you return to the earth that I live on, that seems to be reflective of the experiences and stories I live and read daily, please let us know! It must be nice to be in your place, per what you write!!!

  27. “If anything this is another great example of the failure of government. This “reform” assumes ALL providers with equipement are dishonest. Good providers doing honest work are being penalized equally as the crooks.”
    ” Excessive treatment and excessive cost per treatment are the two biggest drivers of inflation”
    Looks like there are very few “honest” providers. How do caps (if that’s your non-government solution) weed out dishonest providers or appropriate care? Caps just say that we need to protect our insurance profits.

  28. “CMS is just now, in the aftermath of health reform, trying to reduce the amount of diagnostic imaging performed on Medicare patients by lowering its payment rate by assuming the equipment operates 75% of the time instead of 50%,”
    If anything this is another great example of the failure of government. This “reform” assumes ALL providers with equipement are dishonest. Good providers doing honest work are being penalized equally as the crooks. Actually probably more as the crooks will just find other ways to abuse the system while honest docs are screwed.
    This results in altered treatment patterns based not on what is best or most efficient but what gets you around government regualtion. This is why the system gets worse every time government fixes it.
    ” If they want aggressive treatment, they should fully understand what they are signing up for.”
    This is going to be very important, contrary to the sob stories removing lifetime and annual caps are a terrible thing. Excessive treatment and excessive cost per treatment are the two biggest drivers of inflation, the President just removed the only counter balance to those. Like the mother he trotted out she no longer needs to worry about how manuy visits or treatments, great now who is? Providers haven’t shown any inclination to moderate cost or aggressive of care, the floodgates have been opened.

  29. Maggie,
    CMS is just now, in the aftermath of health reform, trying to reduce the amount of diagnostic imaging performed on Medicare patients by lowering its payment rate by assuming the equipment operates 75% of the time instead of 50%, but it’s just a drop in the bucket in the overall scheme of things. They didn’t really do much to attempt to reduce utilization since SGR was passed until very recently.
    As I suggested in my prior comment, however, what we really need is for doctors and hospitals to rethink how good sound medical practice is defined and applied. If the profession were to move toward more conservative treatment protocols, it will save a lot of money for the system but people will die sooner. That’s the tradeoff. To make this clear, here are a few examples:
    1. A patient who can no longer breathe on his own and/or eat by himself will die sooner if he is not put on a ventilator or have a PEG tube inserted.
    2. A patient diagnosed with late stage cancer will likely die sooner if the cancer is not treated than if he receives one chemo drug after another.
    3. A patient with ESRD in need of kidney dialysis will die sooner if he does not receive dialysis than if he does.
    4. For heart disease, some patients may do as well on medication as with a surgical intervention, but most will probably die sooner if they don’t get the intervention.
    5. Late stage Alzheimer’s and dementia patients will die sooner if nature is allowed to take its course than they would if they receive surgical interventions like pacemakers.
    We need to ensure that people are fully informed of their options and the quality of life implications of each. If they want aggressive treatment, they should fully understand what they are signing up for. We should pay for these consults within reason and doctors should not try to push or steer patients toward more aggressive treatment.
    Some people question the Dartmouth research because it only examined what happened to Medicare patients in their final two years of life looking back retrospectively once they died. I think it would be more informative if we could examine how much Medicare spent on a large subset of people over their lifetimes from the time they became eligible for Medicare. Break it down by race, socio-economic status and, perhaps, nationality. If we see significant differences, adjusted for medical input costs, across regions, then look at differences in life expectancy. Complicating matters, however, is that shorter life expectancy for people whose quality of life has already been severely compromised would likely be considered a good thing in the eyes of both the patient and his family caregivers in most cases.

  30. “I’ve been doing research on the whole question of whether employers will drop health benefits once reform kicks in. Everything I’ve found suggests that this is another exaggerated fear.”
    Why don’t you share with us how your typical research project works. One person’s research is another person’s break reading HuffPo after all.
    After all it is Obama who says;
    “49%, 66% or 80% of small employers will be forced to drop their current plan.”
    Simple math would show most would be better off paying $2000 for not offering instead of getting hit with $3000 for it not being affordable.
    When I want to know what employers are planning to do I ask them, I speak to roughly 300+ diredctly per year, how many have you sat and asked before you declared this was an exaggerated claim? Or did you just ask Matt and extrapolate it out from there?

  31. Exhausted–
    As it turns out the USA story is very misleading.
    My associate, Naomi Freundliche, is writing about this and will probably post her piece on http://www.heatlhbeatblog.org
    tomorrow.
    But let me say this: the state medical associations fail to put the numbers in context. 700 doctors out of how manhy docs who take Medicare patients????
    And who are the docs dropping Medicare patients??

  32. Margalit, Ciphertext,
    Margalit–
    No, Orszag is not “unhappy, taking his marbles and going home.”
    As the article you linked to explains, Orszag has planned this depature for some time. Before being head of OMB, he was head of CBO– this has been a “grueling”
    series of jobs for him. Within the administration, the hope was that he would stay long enough to see health
    care reform legislation passed.
    He did.
    He also oversaw passage of the fiscal stimulus package.
    Orszag is happy with what he has accomplished (I know people who are close to him.)
    Ciphertext–
    The story you link to in the WSJ is not a news story (based on fact).
    It is an Op-ed,(based on “opinion”, as in “Op” ) written by someone who opposes health care reform.
    I couldn’t connect to the link to the Post story, so don’t know whether it was an opinion piece. But, unfortuately, in the Post some news stories are simply opinion pieces.
    I’ve been doing research on the whole question of whether employers will drop health benefits once reform kicks in. Everything I’ve found suggests that this is another exaggerated fear. I’ll be posting about this on HealthBeat (www.healthbeatblog.org) in the near future and will explain.

  33. tcoyote, Barry, Tom
    Tcoyote–
    The Republicans were in charge of Congress when the SGR passed. By then, Clinton was crippled.
    And the fact is that Bush kept the SGR in his budget for years, even though it would never be implemented. When Obama first took office, he took it out of his budget.
    These are facts. I’m not sure what is “disgusting” about reporting facts.
    And I am hardly the first person to point out that Bush kept the SGR savings in his budget to make the budget look less extravagant.
    Barry–
    As you know, I agree with you about utilization. But when you write: “CMS was and is unwilling and/or unable to implement any incentives or strategies that would reduce utilization of healthcare services,” I have to disgree.
    CMS IS eager to cut utilization of unncessary services–and over-utilization of services. This is why this year, CMS has slashed payments for testing done by docs who have bought or leased the equipment for their offices. (MedPAC points out that they do twice as many tests.)
    And the pilot programs outlined in the legislation are aimed at reducing over-utilization by moving away from fee-for-service–which, as you know, provides incentives for “doing more” rather than “doing it better”.
    Don Berwick– who President Obama has nominated to head CMS– is very clear about utilizaiton: the best surgery is the one you don’t have; the best hospial bed is the one that is empty; the best medication is the one you don’t take.” I’m paraphrasing, but he is very clear that we overuse medical resources–too much unncessary, ineffective treatments. This is why the conservatives are accusing him of wanting to “ration care” (See yesterday’s NYT story. Unfortunately, the Times story doesn’t differentiate between cutting care and cutting ineffective care. )
    But I do agree with you that some doctors and many hospitals are not eager to reduce utilization. As Berwick puts it: “Hospital CEOs need to begin to see themselves as Cost Centers rather than Revenue Centers.”
    Tom–
    Thanks for the “sorry”–no problem.
    I realize “Many people” is a fairly empty phrase.
    But I just don’t think that people like Don Berwick are
    “monomanical activists.” And when he becomes head of Medicare, he will be a major force–perhaps the most important force–in shaping the future of healthcare. The legislation gives Medicare great latitude to change
    how we pay for care and how it is delivered.
    I’d really urge you–and everyone– to read Berwick’s book “Escape Fire.” It’s a great read–he’s a brilliant speech writer, and it’s a collection of his speeches. And it’s a very good way to get a good idea of who the new head of CMS is. An extremely balanced, rational, grounded and non-partisan person. He’s not an ideologue. He just wants to make healthcare better– more efficient, more patient-centered, more affordable.
    And he has much practical experience showing hospitals how to do just that.
    I do think he can appeal to both conservatives and liberals who want a more rational system

  34. “Congress never intended to make serious cuts to physicains’ reimbursements.
    In 1997, they assumed that 3% to 4% GDP growth would continue. ”
    This is a lie, Congress knew wxactly what they passed, no one assumes GDP will grow 3-4% forever. SRG when it passed was made up BS to make it look like they where controlling the growth of Medicare.
    ” if you were one of the 37 million Americans who have no health insurance, I suspect that you would feel that they must.”
    Seeing as 32 million of those CHOOSE not to have health insurance I think they are quit appaled they are now being forced to buy something they CHOOSE not to.
    ” the one developed country in the world where the governement does not guarantee access to healthcare for all of its citizens.”
    Another lie, everyone has access to the ER. They might not have access to Healthcare to the extent you would like but that is not the same as not having access to healthcare.
    ” And “we” are growing larger and unhappier by the minute”
    Margalit has gone off the deep end of propoganda with Maggie. She seems to ignore the fact that 56% of the country wants it repealled. Her numbers don’t even begin to balance and thney aren’t gorwing. Every day more people want to undo this mess the Dems passed all by them selves.

  35. “The SGR has nothing to do with the reform legislation President Obama signed in March.”
    What a bunch of dishonest BS. They claimed HRC would save money by claiming the SGR cuts. If they had been honsest and left the money in their it would have added to the deficit and might not have been passed. Obama’s propogandist like Maggie are no more honest then he was.
    “Why don’t legislators simply repeal the cuts to doctors’ fees that they have been postponing for years? Why just put off the measure for another six months?
    Because too few of our elected representative possess the chutzpah to stand up and say that blind across-the-board cuts were an extraordinarily dumb idea in the first place.
    Nevertheless, most legislators understand that this crude solution will never be implemented.”
    You either don’t know why SRG was passed or are glossing over it for partisian purposes. SRG is on the books becuase the plan to cut cost at a future dates, even though they know they never will, keeps trillions of dollars off the books. Without SRG our debt is roughly 40 trillion higher then they claim. In reality it already is 100 trillion+ more then they claim but this whole SRG BS isn’t enough to keep the MSM and propogandist such as yoruself beleiving there is not problem and nothing to report.
    “Bush kept the SGR cuts in his budget each year– as if they were going to be implemented–in order to make his extravagant budgets look better.”
    Funny I thought presendtial bugests where advisory and Congress was the one that wrote and passed spending bills. Meaning it was two years of Democrats that included SRG to keep the numbers down.

  36. “This was Bill Clinton and Newt Gingrich’s Balanced Budget Act coming back to bite us. The POINT of SGR was that physician services costs shouldn’t rise faster than economic growth. What was missing was any mechanism for translating the need for sacrifice into more conservative healthcare usage.”
    In other words, CMS was and is unwilling and/or unable to implement any incentives or strategies that would reduce utilization of healthcare services. Since CMS already dictates the prices it is willing to pay, utilization of services is the key cost driver of Medicare Part B. Even if GDP continued to grow at its long term trend rate of 3% annually in real terms without interruption, costs would still have increased well beyond what Congress contemplated when the SGR formula was passed in 1997.
    More conservative healthcare usage is needed but it can’t happen unless doctors embrace more conservative treatment protocols, especially in end of life situations and for patients with advanced Alzheimer’s or dementia. If such patients are treated more conservatively, they will probably die sooner but also suffer less. That point was made quite eloquently by Ms. Butler in her NYT article last Sunday.

  37. “includes Matthew Holt and me”. Pet peeve, sorry.
    Even if unnamed polls are right and there is widespread agreement about the end “universal coverage”, there is no agreement about means and great suspicion that widespread agreement about ends will itself be used as a means to an end unrelated to financing medical services; that the proffered cure for a toothache will be a severed head. Applying the principle of subsidiarity can greatly mitigate this danger and attendant fear, and is in keeping with American traditions. But this requires consensus, and monomaniacal activists, like evil empires fictional or no, care only for conquest.
    t

  38. Seems to me that you won’t get to keep your plan if you like, as was one of the often heard sales-pitches about the reform.
    NY Post Article also see,
    WSJ
    The following article is just interesting in how the plan has eroded the pharmaceutical companies “supposed” protections negotiated with Obama’s White House.
    It is reminiscent of the scene in Star Wars: The Empire Strikes Back when Darth Vader told Lando Calrissian that the deal he made with the empire has been modified.
    National Center for Policy Analysis

  39. Peter- a truth teller.
    Maggie blaming the SGR problem on George Bush is pretty disgusting. Those nasty Republicans are the source of all evil, I guess. What would we do without them?
    This was Bill Clinton and Newt Gingrich’s Balanced Budget Act coming back to bite us. The POINT of SGR was that physician services costs shouldn’t rise faster than economic growth. What was missing was any mechanism for translating the need for sacrifice into more conservative healthcare usage.
    SGR is a symbol- a symbol of Congress’s inability to make tough choices and stick with them, a very bad sign for health reform.

  40. Tom–
    Well. . . “we” includes Matthew Holt and I, to name two. (I take the liberty of saying this because Matthew has said, on more than one occasion, that while the reform legislation may have many limitations (he is decidedly less enthusiastic than I) , at least it will provide insurance for 37 million uninsured, and this, he consdiders, a top priority. As I do.)
    Polls show that the only Americans who don’t consider universal coverage to be a top priority are very wealthy individuals. Within that group, many support universal coverage, but, sadly, a fair number in that cohort subscribe to the “I’ve got mine, Jack,” mentality.

  41. Tom,
    “We” are the people that voted for Barack Obama in 2008 + the people that have no insurance and not enough education to understand the importance of voting + people that voted Republican because of other reasons, but still support universal health care.
    And “we” are growing larger and unhappier by the minute http://bit.ly/cFGqow
    ….and it seems that Peter Orszag is also unhappy and ready to take his marbles and go home now….
    http://www.usatoday.com/news/washington/2010-06-21-white-house-orszag_N.htm

  42. When a policy changes are affected, it could be unclear in the beginning to many parties involved regarding the implications. However, only after sometime the real impact of the policy will be known.
    Healthcare reform is a need of the hour. Hope healthcare reforms can make the treatments affordable to everyone.

  43. > We are not happy living in the one developed
    > country in the world where the governement does
    > not guarantee access to healthcare for all of its
    > citizens.
    Who’s “we”?
    My point is that the unhappiness you express over this is far from universal. The Sword of Damocles embodied this time by the SGR serves many interests, which is why it has not been repealed, original intent notwithstanding.
    t

  44. Maggie,
    If repeal of SGR were included in the health care “reform” bill (which it obviously should have been), then that would result in massive deficits. This is plainly obvious. This is what Obama promised publicly he would do, but failed to deliver on his promise, or, rather, he fooled America into thinking the bill was budget neutral with the huge caveat that SGR repeal would happen later.

  45. Lead story today, USATODAY, how wonderful the Medicare system is being embraced by physicians.
    I’m sure Ms Mahar and other detractors from reality of being a health care provider will argue how this makes us the villians. This is a coming attraction for 2014, those who are unbiased and objective.
    Incredible this author above continues to write what she does!

  46. Tom, Peter
    Tom– Please read my comment above explaning the history of the SGR. Congress never intended to make serious cuts to physicains’ reimbursements.
    In 1997, they assumed that 3% to 4% GDP growth would continue.
    No One ever thought that blind across the board cuts would be a good idea.
    As to whether the federal government shoudl try to refrom health care, if you were one of the 37 million Americans who have no health insurance, I suspect that you would feel that they must. Many of us who have insurance also feel that way. We are not happy living in the one developed country in the world where the governement does not guarantee access to healthcare for all of its citizens.
    Peter–
    No one fooled anyone.
    Obama make it very clear that the SGR formula wouold not be implemented by NOT including those savings in his first budget when he came into office.
    (Bush had always included those savings in his budgets to try to make them look better, even though everyone knew that they would never be realized.)
    As Peter Orszag and others have explained upteen times,
    it doesn’t appear that the reform legislation will add to the deficit and their are many provisions embedded in the legislation that will lead to savings that cannot be measured by trying to project 10 years forward. Too many variables.

  47. Thanks to Matthew for cross-posting.
    But I’m afraid THCB picked up the post before I made a couple of changes to the post yesterday (Sunday) in response to HealthBEat readers’ comments.
    In the first paragraph I revised to say ” If the House agrees that the cut should not be implemented–and it is all but certain that it will–the 21 percent cut wil be replaced with a 2.2 percent pay hike. The bill will not add to the deficit. The proposal is fully offset by changes in Medicare billing regulations, antifraud provisions and the tightening of some pension rules, eliminating Republican objections that it would push the federal government deeper into debt. The only question is whether the House will demand a full repeal of the SGR formula which calls for a 21 percent cut, or at least, a much longer repreive.”
    In other words, the House is likely to for a longer reprieve or a complete repeal of hte SGR.
    What’s certain is that it won’t vote to implement the SGR.
    Later in the post, I added a section about the history of the SGR that I think is very important:
    As noted, this ill-conceived law passed in 1997, long before today’s reformers came on the scene. At the time, legislators never thought it would lead to enormous cuts. The SGR formula compares growth in Medicare payments to physicians to GDP growth. In the late 1990s, GDP was growing nicely. It wasn’t until 2002 –five years after the legislation was enacted–that the formula called for a reduction in doctors’ fees. In the years that followed GDP growth remained sluggish, and the deferred cuts built to 21 percent.”
    Congress NEVER intended to make drastic cuts ot physicians reimbursements. The problem is that, under Bush, the eocnomoy went into a slump.
    Bush kept the SGR cuts in his budget each year– as if they were going to be implemented–in order to make his extravagant budgets look better.

  48. I am not so certain about rosy repercussions of reform. In 1910 my favorite author wrote:
    “But social science is by no means always content with the normal human soul; it has all sorts of fancy souls for sale. Man as a social idealist will say “I am tired of being a Puritan; I want to be a Pagan,” or “Beyond this dark probation of Individualism I see the shining paradise of Collectivism.” Now in bodily ills there is none of this difference about the ultimate ideal. The patient may or may not want quinine; but he certainly wants health. No one says “I am tired of this headache; I want some toothache,” or “The only thing for this Russian influenza is a few German measles,” or “Through this dark probation of catarrh I see the shining paradise of rheumatism.” But exactly the whole difficulty in our public problems is that some men are aiming at cures which other men would regard as worse maladies; are offering ultimate conditions as states of health which others would uncompromisingly call states of disease. Mr. Belloc once said that he would no more part with the idea of property than with his teeth; yet to Mr. Bernard Shaw property is not a tooth, but a toothache. Lord Milner has sincerely attempted to inntroduce German efficiency; and many of us would as soon welcome German measles. Dr. Saleeby would honestly like to have Eugenics; but I would rather have rheumatics.”
    But in Congress they all say “I shall bear with your bronchits if you will accept my fever.” Far better to cure both.
    So Maggie, I think you are wrong. “Why don’t legislators simply repeal the cuts to doctors’ fees that they have been postponing for years?” I say it is because there is no agreement about what the role of the Federal Government (or state governments for that matter) should be in the first place. Depending on the goal, blind across-the-board cuts may have been an extraordinarily good idea. Chutzpah just gets you thrown out of office. Unless you’re a Kennedy.
    Everyone is fighting a rear-guard action over different visions of a society and calling it Compromise. Compromise is not Consensus and nobody seems interested in Consensus, only in Conquest.
    t

  49. If Obama had an SGR-fix in the original reform bill, then the bill would have been financed by significant deficit spending. Instead of making a bill which would create more deficits, Obama and democrats in congress fooled the American people by making two bills, one which was deficit neutral and the other which created deficits.
    The “reform” bill will fail in the end because there is no money around to pay for it. Without cutting physician payments by 20%, then the reform bill will create massive deficits year after year.
    This is not a solution, but Obama fooled the country into thinking it would be.

  50. This is indeed sick America. Not much else to say. Politicians rely on the wrong consultants, the lobbyists.

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