• Fiscal commission report

    I read the co-chair’s draft of the fiscal (deficit) commission report. I’ve also read what a few others think. I don’t have time to put together my own thoughts in detail, but I’ll list a few below. What I’m eagerly awaiting is Don Taylor’s and Jon Cohn’s full take. Both have promised one and they’re likely to have smart things to say in the area of health care.

    Quick thoughts, some of which reflect my lack of understanding of some details:

    • Capping federal revenue at 21% is closer to CBO’s alternative fiscal scenario than baseline projection. It was my understanding that revenue from CBO’s baseline projection grew at the predicted pace largely from the high-premium excise tax (Cadillac tax). As far as I can tell the deficit commission doesn’t do away with that tax. In fact, they strengthen it. So, how is revenue to be kept so low?
    • Clearly cuts to Medicare spending are required. But I don’t believe Medicare can cut payment rates to providers far below what they receive from private payers (insurers). Doing so will create an access problem and therefore a political problem. This is Newhouse’s point and he’s right, a lot!
    • Strengthening the IPAB is a good idea.
    • Reforming Medigap is a good idea.

    That’s it for now.

    Later: Don Taylor’s fuller take.

    • On Medicare payment rates…
      I don’t think the rates should be cut (except for some procedures which are reimbursed out of proportion to time and training). However, over-utilization is a big problem. There are a lot of expensive procedures that are performed far too often (given poor evidence for their effectiveness). Add in duplicate tests and unnecessary tests as well as upgrades (MRI when a plain film would be just fine) and you are talking about a lot of revenue.