• OK, I get what the plan won’t do…

    I can’t speak for everyone out there, but I’m now at full frustration. It’s been building slowly, and now peaking.

    I have been emailed, tweeted, commented, called, and generally yelled at explaining to me what Gov. Romney’s Medicare won’t do. It won’t cost seniors $6400 in co-pays in the future. Fine. It won’t cut $700+ billion from Medicare in the next decade. OK. It won’t reduce provider payments like the IPAB will. Dandy. It wont take any benefits away, it won’t affect anyone over the age of 55, and it won’t sacrifice anything at all to give entitlements to other people.

    But what will it do?

    Seriously, these statements are those of someone who has no concern over spending at all. There are no sacrifices involved. There are no hard truths.

    I’ve asked these before, so I’ll ask them again:

    1. If seniors won’t have to pay any more, and providers won’t be paid any less, and benefits are assured, then how will we spend less money on health care?
    2. If health care costs are held to GDP+0.5%, as previously supported, then what will happen if costs go above that amount.
    3. If (2) is wrong, as Austin wrote about here, and there is no cap, then how will we contain costs at all?
    4. If you repeal the ACA, then will you reopen the donut hole? If not, then how will you pay for that benefit?
    5. If you think the viability of the Medicare trust fund is an issue, then how will making no changes to Medicare for a decade extend its viability past 2016?
    6. If the short term deficit is an issue, and you eliminate the current cuts to Medicare, and promise no changes for a decade, then WTF?!?!?!?
    7. Medicaid? Hello? What are your plans there? Can we talk about that for a minute?



    • You ask excellent questions. Facts do sometimes get in the way of ideologically driven folly.

      Personally, as a Canadian citizen, I wonder how anyone could not see the flaws in a market driven system.

      • Wow, true Canadian smugness at its most archetypal. If you think the US has a market-driven system, you haven’t been a regular reader. Understanding the interplay of public and private financing is a critical part of this blog.

        • There is a sharp contrast between the US system and pure or primarily government run healthcare.

          All modern markets have a public component and depend on things that are financed by the public. Private insurance is largely market driven, given private companies offering insurance, individuals and employers having choice, etc.

    • My favorite argument from the Rs:

      1) You are cutting spending. This will kill seniors.

      2) You are not cutting spending. The deficit will kill us all.

      Given that 1 and 2 cover all possibilities, they can scream whatever is suggested. They just switch back and forth as circumstances demand.

    • Uh, you’re trying to believe Avik Bloody Roy and an article that declares, apparently without irony, that “[t]he reason CBO can’t model the 2013 House budget and the Romney-Ryan plan is that they harness markets with competitive bidding. Congress’s budget gnomes can’t handle these dynamic forces”?

      The gold standard is only six impossible things before breakfast. And that’s when you have the mind of a 101-year-old lunatic. Stress not the fabric of the universe so far, please.

    • I think it’s pretty clear that Romney is endorsing the Medicare status quo for the next four years. I understand why that’s disappointing. But why is it frustrating? Isn’t it obvious that if Romney proposes any change whatsoever to Medicare, the Democrats will demogogue it to death? So why give them ammunition? No point in even talking about the subject until the Democrats in Congress are ready to deal.

      Meanwhile, we have a law on the books that is going to take $716 billion out of Medicare with devastating consequences to seniors, according to Medicare’s Chief Actuary. The Democrats who voted for this legislation have never explained how they are going to cut provider fees without harning the elderly. Nor have they pledged not to restore the cuts after they start hearing from angry voters who can’t find a doctor who will see them.

      This is what should be causing you frustration. Because this is a real problem, not an imaginary one.

      • Sorry, John, but “going to take $716 billion out of Medicare” is a non-truthy presentation of what the ACA does.

        First, it cuts payments to Medicare Advantage plans — you know, those private insurance plans for seniors that end up costing more than traditional Medicare. Sure, MA operators could respond by taking away benefits, but rich benefits (and relatively low premiums and co-pays) are what make them attractive to enrollees. More likely, they’ll shrink their healthy profits a little, raise premiums a little, or tweak the premium-benefits balance a touch to hold on to their customers.

        Second, the ACA cuts payments to providers, especially hospitals and post-acute care providers. In part, this move supports a companion effort to bundle payments for hospital and post-hospital care, to hold down spending growth while prompting providers to achieve better quality outcomes with the carrot of gain-sharing. MedPAC doesn’t forecast damage to beneficiaries’ access to care or to the quality of the care they receive. But perhaps John knows something MedPAC doesn’t.

      • “Meanwhile, we have a law on the books that is going to take $716 billion out of Medicare with devastating consequences to seniors, according to Medicare’s Chief Actuary.”

        I’m curious where you got this data. That’s not at all what I got from the report (sourced below). Are you looking at a more recent one?


        There are several quibbles with the accounting techniques and potential mid/longterm affects of reducing provider reimbursement rates (particularly for those who primarily rely on Medicare beneficiaries), but the accusation that the cuts will have “devastating” effects on seniors seems unfounded.

      • “I understand why that’s disappointing. But why is it frustrating? Isn’t it obvious that if Romney proposes any change whatsoever to Medicare, the Democrats will demogogue it to death? So why give them ammunition? No point in even talking about the subject until the Democrats in Congress are ready to deal.”

        I think that this is a very odd perspective. If there is a good plan then why not engage the public with it despite the risks? After all, a good plan on health care reform would be useful.

        As for why it is frustrating? It is painful to watch people propose no changes to programs as well as cuts to revenues in the face of a large deficit. You cna claim that deficits don’t matter but then what was the concern with the debt ceiling? I do not see (perhaps I need to be educated) how we can increase defense spending, hold social security and medicare constant, reduce taxes, and still reduce the deficit (even removing pretty much everything else seems unlikely). I suppose it could be possible, but such an ambitious achievement should be laid out so we can crowdsource the assumptions.

        If, alternatively, one of these things isn’t going to happen (e.g. defense is cut, taxes are not lowered, SS/medicare are cut, or the deficit is allowed to grow) then it matters quite a bit which one of these options is likely to be taken. It is true that plans are just that –plans. Reality may make the plan not work out.

        But I would like a clear plan on how this all comes together; it doesn’t have to be a perfect plan (and it will be attacked — but then so was the ACA). But some plan, of some kind, would seem to be important or else we are just going on “faith” (I will do my best once I am in office sort of approach).

    • Seriously, these statements are those of someone who has no concern over spending at all. There are no sacrifices involved

      That describes what politicians feel they have to present to avoid losing the elderly voters and the election. As long as politicians can borrow money I think they will.

    • Here are the answers you seek…

      1. For the next 10 years Romney/Ryan promise no savings (and additional $716 billion in Medicare costs.

      2. The voucher (once introduced) is set at a max of GDP + 0.5%. If costs rise faster than that then seniors pay the extra costs out of pocket.

      3. The entire plan is predicated on the assumption that private plans competing for Medicare seniors will be able to control costs.

      4. They re-open the donut hole.

      5. It won’t.The Medicare trust fund runs out in 2016 under this plan.

      6. WTF indeed. This plan promises to spend an extra $716 billion on Medicare. It does eliminate the ACA, which does eliminate those costs (as well as those cost controls).

      7. No. The Romney/Ryan plan calls for a very rapid 40% cut to Medicaid (along with block-granting the entire plan). Don’t expect anyone to discuss the viability or implications of this.

    • All I know is what the Obama Administration’s Chief Actuary of Medicare told us all soon after the ACA passed:

      1. One half of seniors in Medicare Advantage plans are going to lose their plan.
      2. One in seven hospitals will be out of the Medicare system by the end of the decade.
      3. Doctor fees will fall below Medicaid rates very soon and seniors will have a worse time seeing physicians than welfare mothers.

      People at this blog do not appear to read the Medicare Trustees reports. Try them. They are real eye openers.

      BTW: why do you think the Trustees and the CBO keep putting out “alternative Medicare spending” forecasts? Because nobody inside the Beltway thinks this will ever happen.

      • #1 is to be expected when you have a situation of overpaid plans and then try to rein in the spending. So long as seniors have other options (and they all do), it is unclear to me why we should not accept this disturbance as part of the necessary pain to save money.

        I don’t have anything to say about #2 other than, if hospital access becomes problematic, I have no doubt the industry, as well as beneficiaries, will use their political clout to do what they always do.

        #3 is not due to Obamacare. That doesn’t mean it isn’t a problem. http://theincidentaleconomist.com/wordpress/two-questions-id-like-answers-to/

        I expect your reply to be that this all illustrates that this is not the fundamentally right approach to reform. There is one other approach on the table right now, only we can’t quite tell what it is because it changes so rapidly. Maybe it saves money, but not with no cap on spending. Maybe it has a cap, but spares beneficiaries any pain, in which case it also cuts provider payments. Maybe it spares providers and has a cap, in which case costs are shifted to beneficiaries.

        Naturally, there are other approaches in principle, but none that are supported by one or both major political parties.

      • First of all, that’s not what the actuary said. He said that 1 out of 7 current Part A providers would be unprofitable. While that’s not long term sustainable, the question is what they would do. They might merge into a consolidated, more efficient integrated health system. They might go out of business, generating more business for the next closest competitors. They might focus their attention on cost efficiencies and get better at what they do. There are many ways they could react to that pressure.

        And, for how dire that might be, I just ask how horrible the 1990s were? During that time period, we lost 12.6 percent of U.S. hospitals. Did life as we know it end?

    • This is my last comment on this issue.

      Do you guys realize that Medicare Advantage enrollees are below-average income, disproportionaltely minority and basically folks who cannot afford Medigap insurance?

      Actually, they fit the profile of a Democratic voter. And yet it is the Republicans who are trying to save them. Irony.

      • On what issue? Are we debating some issue? If so, which, and what’s your position?

        Anyway, to your (mercifully final) comment, why don’t we offer income-sensitive support for MA enrollment, while making the richer enrollees pay for the extra benefits out-of-pocket? Or do you advocate enriching the Medicare benefit to the level of the most generous MA plan so no beneficiaries have to suffer from buying supplemental insurance? Or maybe you’re implying that we should allow all poor people, independent of age, enroll in an MA plan. Is that right? These are honest questions. I can’t figure out what your reform goals are.

        Do you realize that we’re perfectly willing to engage in a policy dialog? Sadly, I’ve yet to see any evidence you’re willing to do the same.

        • If you get John to engage in real dialogue, get him to answer the following. He often talks about how the ACA will cut physician salaries. He claims that his plan(s) will cut medical spending. How do they do that without cutting physician salaries? Looking at my kid’s college bills, I would love to see us cut medical spending w/o my pay being cut, but I just dont see how it happens. Fees or utilization are going to take a hit in anyone’s plan.


      • I realize that Goodman is not commenting further, but he should also be reminded that MA tends to enroll healthier beneficiaries than traditional Medicare, and that currently, MA plans are paid more than traditional Medicare’s costs. This is even though they should be able to cover the beneficiaries for less (and it does appear their bids reflect that iirc).

        I think once you remove that price distortion, quite a number of liberals would be neutral towards MA. But Republicans appear quite willing to keep that distortion, which is not how a competitive type of system should work.

    • “Anyone?”

      I would have thought the answer was obvious.

      The Republicans will have magic fairies flying around the country spreading pixie dust.

    • OK, Austin. I’m in Prague at the moment and don’t have a lot of time but you’ve goaded me into one more post.

      My views on Medicare reform are not a secret. I frequently write about these things with Tom Saving (a former Medicare trustee, appointed by Clinton and reappointed by Bush). You can find our ideas at my blog, at the Health Affairs blog and in many other places. But start with my book, Priceless, which is at Amazon and is a good overview of everything.

      Bottom line on Medicare: Obamacare is not paid for. The cuts in Medicare are absurd and will never happen. No one inside the Beltway seriously thinks they will ever happen. They won’t happen. For the record, Ryan minics the Obama Medicare spending. I tried to talk him out of it, but failed. Ryan also doesn’t have a way to make it work.

      But there are all kinds of things that could work. Tom Saving discussed ten of them at the Health Affairs blog not long ago.

      As for our willingness to engage, I have a blog and we welcome (and often receive) comments and discussion from all points of view.

      • So why are you reluctant to discuss ideas and offer solutions in these comments? They’re not just for snark, you know. (In fact, that’s discouraged, even deleted.)

        You may do what you like on your blog, but often your comments about me and my posts are also snarky. Not appreciated, and certainly not a way to draw me into a dialog.

        I’m no enemy of good ideas supported by evidence. Though I’ve written no books, I think that’s clear from my blogging as well as my own publications in Health Affairs and elsewhere.

        Enjoy Prague.

    • For those interested, here is a link to the Saving and Goodman article on Medicare. It has some decent ideas. Some that I disagree with also. However, It would help if John, and other pundits, would realize that doctors actually read this stuff. The opening bit about cataracts is just bizarre. Yes, we have been doing cataracts for 50 years (actually much longer). They used to take hours and the patients were hospitalized for a week. Yes, the operative time can now take 15 minutes, but the prep time before takes at least an hour (not all done by the doc) and requires significant tech investment. It also requires follow up. (Yes, they did not write this, but the cite it.)



    • The $716 billion in Medicare ‘cuts’ appear to be:

      about one-third made up tax increases on dividends and higher incomes — which will take place, but hurt very very few seniors;

      and one-third made up of cuts to Medicare Advantage, which will make seniors pay $250 a month instead of $100 a month over and above their $99.90 in part B premiums:

      (this will hurt a few seniors, but compared to workers between 50-65 most seniors are wildly better off in health care right now);

      and one third made up lower fees for hospital readmissions and similar items, which providers can make for with higher utilization in about 2 months (see George Halvorson in his classic work Strong Medicine.)
      The cuts will effectively never happen.

      Here is the question that no one has quite taken on:

      If we cut Medicare to reduce the deficit, many health care workers will lose their jobs, and many more seniors will go into debt.

      If we raise taxes to keep up with Medicare, average workers will be a little worse off.

      This may be a case where paying higher taxes for Medicare will make the nation better off.

    • It’s morning here in Prague and I see that some of you thought that I was snarky and insulting in my comments yesterday. Many apologies.

      We are a bit edgier at my blog — especially when Uwe Reinhardt and I are going at it. Also, not everyone has the same sense of humor.

      I respect everyone at this blog and often link to it.