• It’s not fun being the hostage

    I think one of the most uncomfortable things for me about the recent debt ceiling standoff was the fact that the hostage in the showdown was the US economy. I am not an official economist, but it seemed like all the people I trust (on all ends of the political spectrum) were saying that a default would be terrible for the country. In essence, we were all at stake.

    It’s no fun being the hostage in the negotiation. If it were up to me, I’d like to see the debt ceiling vote go away entirely. I don’t understand why it shouldn’t just be bundled into budget negotiations. If you vote for a budget with deficit spending, you should immediately raise the ceiling by that amount. If you don’t like that, budget differently.

    The “trigger” mechanism in the deal tries to rectify that. Instead of the economy being held hostage, however, it sets up two new hostages: defense spending and Medicare providers. And if there’s one thing we’ve learned the last few months, it that it’s not fun being the hostage.

    You’re already seeing some defense hawks grumbling about this. Hospitals and physician groups aren’t happy either:

    Physicians, home health practitioners and other providers could see an additional 2 percent pay cut on top of double-digit Medicare reductions already slated for 2012 under the debt ceiling deal reached by the White House and congressional leaders late Sunday.

    There’s also more general concern about a new congressional panel to be created by the deal that would have broad authority to cut federal spending on Medicare, Medicaid and even some parts of President Barack Obama’s health care law, according to health care lobbyists and budget officials.

    Under terms of the hurried deal, the 12-member joint committee would be charged with crafting proposals that trim at least $1.2 trillion in federal spending over the next decade. Those savings could be found in a number of programs, including Medicare and especially Medicaid, which the White House has signaled it would be open to.

    If the panel can’t come up with enough savings, automatic cuts would go into effect. Medicaid, Social Security and veterans’ benefits would be protected. But providers could see a 2 percent cut in Medicare reimbursement.

    I said a little while back that I thought it was a bit tone deaf for the AMA to fight for the doc fix at a time when spending cuts were all the rage. I agree that fixing the SGR needs to be part of a long-term “grand bargain”, but unfortunately, the groups opposed to that mechanism were not the ones being targeted by the AMA, at least as far as I could see.

    Even worse for providers, the negotiations of the Super Congress would need to be wrapping up at just about the same time that the SGR is once again slated to kick in – reducing Medicare reimbursement about 29% across the board. If the AMA thinks it’s going to be easier to convince politicians to find a couple hundred billion dollars to solve this issue then, they’re in for a bit of a rude awakening.

    I’ve become a bit more dispirited the last few weeks. I’m not sure I believe that the Super Congress will succeed where the entire Congress seemed to fail. If that’s the case, providers are in for some massive cuts next Fall. Anyone who thinks that won’t affect patient care, especially for seniors, isn’t paying attention.

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    • FWIW, Michael Scherer at Time magazine wrote that the “trigger” cuts were designed to provoke a big effort by lobbyists– health care providers & the military-industrial complex– so that we don’t pull that trigger.

      We have 9% unemployment, but nobody cares about that. Those people’s interests are meaningless, because they can’t come up with campaign and think tank donations. We’ve already sold them out.

      But health care providers and the war industry… those are people with serious money. Those are people that matter. The deal was structured to make pulling the “trigger” unthinkable, by giving those two groups the incentive to demand policy changes.

    • Starving medicare providers–non-proceduralists lose money on medicare patients– will effectively kill medicare as an effective healthcare insurer. Hopefully, there will be some thought given to the need to protect primary care!?

    • “Of those with high expenditures, 46.3 percent are elderly; the elderly comprise only 12.7 percent of the total noninstitutionalized population (in 1987 these figures were 48.2 percent and 14.9 percent, respectively). Similarly, those in fair or poor health comprise 48.6 percent of the high users but only 11 percent of the U.S. population. Thus, the majority of persons in the highest 1 percent of spenders are not elderly. Furthermore, most of the highest 1 percent of spenders do not consider themselves to be in fair or poor health. Additional research should focus on understanding the exact health care needs and prognosis of this group.”

      “More critically, these findings also suggest that man- aged care plans may be no different from other health plans in the degree to which decisionmakers allocate resources between high- and lower-cost patients.”

      “The high- expenditure population may be younger and in better health than some might expect.”

      “That the bottom 1 percent of the uninsured would be almost entirely excluded from the medical care system is no real surprise, but the top end of the distribution is of interest. Some may argue that the safety net ultimately provides appropriate care for everyone, including the uninsured. This is not supported by the data: While the distribution of expenditures is similar between the privately insured and the uninsured, the actual amount spent on caring for the uninsured is consistently lower for those without coverage. Those in the top 5 percent of spenders among the privately insured average annual expenses of $17,871; among the uninsured, $6,651. Thus, even the very sickest of the uninsured receive only a small fraction of the care that can be obtained by those with private insurance.”

      Marc L. Berk and Alan C. Monheit. The Concentration Of Health Care Expenditures, Revisited Health Affairs, 20, no.2 (2001):9-18

      Perhaps, if one believes this article (any additional papers further support their findings?), it is neither the poor & uninsured, nor the elderly who are driving up costs. Again, “Furthermore, most of the highest 1 percent of spenders do not consider themselves to be in fair or poor health.”

    • Frequent congressional short term fixes to the broken Medicare physician payment system have increased both the size of the Medicare cut and the cost of real reform. The new congressional debt committee will face difficult choices regarding our national debt, but to address this problem in a fiscally responsible way they must repeal the Medicare sustainable growth rate (SGR). The failed formula will trigger a nearly 30 percent cut on January 1, severely threatening access to care for seniors. Without action now, the cost of permanent reform – which bi-partisan elected officials agree is critical – will continue to escalate, increasing the cost for taxpayers. Any plan this year to reduce the deficit must repeal the SGR to keep from increasing the long-term cost of reform and to stabilize Medicare for patients and physicians.