• Two questions I’d like answers to

    I’m seeing people make what appear to me to be mistakes or false assumptions in two areas. It is, however, possible I’ve missed something important, so maybe someone can tell me if I have.

    Issue 1: Under Mitt Romney’s vision for Medicare, what happens if Medicare spending growth hits the (GDP+0.5%) growth cap? As best I can tell, the answer to this is, “We don’t know.” It is, by the way, not true that we don’t know what would happen if President Obama’s identical cap binds. What would happen in that case is that the IPAB would be obligated to submit a payment reform proposal to Congress. Congress would have to adopt the IPAB’s proposal or enact a different one that achieves the same savings. The IPAB’s proposal would have to adhere to its charter, namely it could not cut benefits or increase beneficiary out-of-pocket costs. The law says it cannot ration care. (Interpret as you see fit.) Providers would be dealt the blow.

    But, back to my question. Would Mitt Romney target providers if program spending grew too quickly? Or would he target beneficiaries? As far as I know, he has not yet answered, leaving many to speculate it’s the latter on the logic that he rejects Obamacare’s means of Medicare cost control.

    Issue 2: How are payments to doctors being cut by Obamacare? As best I can tell, they are not. To be sure, Obamacare cuts payments to hospitals and other non-physician providers, but it doesn’t seem to me that it targets doctors. Yes, the SGR cut are aimed right at doctors, but those are not due to Obamacare, despite how some like to blur the lines on that. We have a near-annual opportunity to reform the SGR, with another chance coming January 1st. If we’re worried about cuts to doctors, we could put the Obamacare debate aside for a moment and work on how to reform the SGR.

    Am I missing something?


    • You are asking economic questions, but this is a political issue. Romney/Ryan is now claiming that they will save Medicare. They have criticized the ACA for reducing payments to providers. They have made the argument that docs will stop accepting Medicare patients. They also dont want more Granny being pushed off the cliff cartoons popping up, so I dont really expect them to tell us they will expect beneficiaries to pay. Most reporters will not be smart enough to push them on this, and they will avoid the few who are.


    • Although budget neutral, some docs win, and some lose. Physician VBP kicks in in 2015. Quality report cards (beta) going out to states below. This is in the statute, and so long as there is FFS, there will be some haircuts:

      Section 3007 – Value-based payment modifier under the physician fee schedule: This provision directs the secretary to develop and implement a budget-neutral payment system that will adjust Medicare payments based on the quality and cost of care they deliver. Although payment adjustments will not begin until 2015 (based on 2013 reporting), in 2012 over 20,000 physicians in Iowa, Kansas, Missouri and Nebraska received reports on their resource use.


    • The ACA does not cut physician reimbursements. I sit on the board of directors of the AMA’s Political Action Committee, and this is a common misconception that is not backed up by reality.

      Even the NEJM agrees http://www.nejm.org/doi/full/10.1056/NEJMp1201853

    • With respect to the first question: We don’t know for sure, but the likely and logical answer is beneficiaries. Under premium support, Medicate doesn’t pay providers; it sends vouchers to insurance plans. Its only lever is to reduce the amount of the voucher. If Romney has some clever new mechanism to avoid shifting costs to beneficiaries under these circumstances, he certainly hasn’t told anyone. (Although what remains of traditional Medicare will pay providers, it will have become just one of the competing plans–presumably to be treated like any other.)