• So close to a happy retirement


    Austin’s almost got me convinced that throwing competitive bidding in there could be the answer.

    I don’t care about convincing the rest of you, if I could only push Aaron into the “let’s give it a try” column, I’d retire a happy man. Let me try this approach:

    • Do you like the status quo Medicare, including Medicare Advantage, and its costs? (I know Aaron’s answer to this.)
    • Do you like to see private plans paid well above FFS costs? (No, health reform did not change that.)
    • Do you think we’ll achieve “perfection”? (I know Aaron’s answer to this too.)
    • If your perfect Medicare is unachievable, what’s your best approach to taking a reasonable step that at least improves things without disrupting too much?
    • What’s an approach that acknowledges the political equilibrium of a hybrid public/private Medicare? (If you reject that this is a political equilibrium, I’ve lost you. But then you have to explain the last two decades and the simultaneous appeal — to some — of Rep. Ryan’s plan along with the appeal — to others — of traditional Medicare.)
    • What’s an approach that is aligned with all of the above, protects beneficiaries from the risk of support not keeping up with health care costs, reduces taxpayer costs, and preserves both private plans and traditional Medicare options?

    I think competitive bidding does the trick. Some might be concerned that it relies too heavily on risk adjustment. I’ll address that tomorrow. Even if you have reservations, come back to how Medicare Advantage is paid now. Do you like it? Why?

    • While I like the idea of competitive bidding as a concept, there is one thing that I have concerns about. Will insurance companies actually be able to make money if they charge less than FFS Medicare? Where will the profit come from? I assume that you have the selection issue solved, but still, why will docs sign up for these programs if they offer lower fees? If the insurers cannot sign up providers, how do they offer lower costs? Less waste, fraud and abuse?


      • Selective contracting in high provider density areas plus care management. That’s all that is left after risk selection and waste/fraud/abuse. I’m going to hit the books to see if I can illustrate evidence of this.