Obama’s Proposals For Medicare — Do They Go Far Enough? Will They Become Law?

Not long ago, I wrote about the Center for American Progress’ (CAP’s) “Senior Protection Plan” —a report that aims to rein in Medicare “by $385 billion over ten years without harming beneficiaries.” In that post, I suggested that CAP’s proposals might well give us a preview of the “modest adjustments” that President Obama had said he would be willing to make to Medicare.  At the time, I highlighted three of CAP’s recommendations:

– increase premiums for the wealthiest 10% of Medicare beneficiaries (raising $25 billion);

– insist that drug-makers extend Medicaid rebates to low-income Medicare beneficiaries (saving $137.4 billion);

– prohibit “pay for delay” agreements that let “brand-name drug manufacturers pay generic drug manufacturers to keep generics off the market” (saving $5 billion).

Last week, in his State of the Union address, President Obama embraced the first two:  “Already, the Affordable Care Act is helping to slow the growth of health care costs,” he noted. “The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.”  (In time, I suspect that the administration also will call for a ban on those decidedly seamy “pay for delay” deals.)

“On Medicare,” he added, “I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission.” The commission called for reducing Medicare spending by roughly $350 billion over 10 years–  a sum that is not far from CAP’s $385 billion target.

Are These “Adjustments” Too Modest ?

These may seem like small numbers. But keep in mind that this is on top of the $950 billion that the Affordable Care Act (ACA) saves by squeezing waste out of health care spending, while simultaneously raising new revenues. Of that $950 billion, some $350 billion comes in the form of Medicare savings achieved by:

–  Pruning over-payments to private sector Medicare Advantage insurers– $132 billion  

–  Containing Medicare inflation by shaving annual “updates” in  payments to hospitals and other large facilities by 1% a year for ten years, beginning in 2014– $196 billion

– Cutting disproportionate share hospital payments to hospitals that care for a disproportionate share of poor and uninsured patients over 10 years beginning in 2014 – $22 billion.

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Health Care Reform: Stage Two

Last week, my editorsat  the Health Insurance Resource Center (Healthinsurance.org) challenged me to write a letter to President Obama and suggest what he should do next to advance reform. They were looking for a “new, big idea.”

After thinking about it, I concluded that we don’t need another big idea.  The Affordable Care Act (ACA) contains a great many ideas. Now we need to implement them.

Critics of Obamacare have suggested that as we approach 2014, Washington needs to turn its attention to containing healthcare costs. In particular, they suggest that Medicare is too expensive.

But the fact is that if you read the legislation (and I have, more than once) , you’ll find that it already cuts Medicare spending by some $716 billion. And it does this without cutting medical benefits and without slashing Medicare’s reimbursements to doctors.

In addition, the ACA includes many carrots and sticks designed to encourage hospitals and doctors to provide more efficient, less costly, safer care. In the future they won’t be paid for doing More;  they’ll be paid for doing it Better–for Less. Only health care providers have the power to truly reform our wasteful health care system. Already we’ve seen some evidence that they are responding to the incentives: Medicare spending has slowed.

Finally, and most importantly, President Obama should reject any attempts to re-negotiate the ACA during budget talks. The ACA is not on the table. It is now the law of the land. The American people do not want to listen to politicians continue to debate healthcare. (They want their elected leaders to focus their attention on just one Big Idea: Jobs)

The election gave the president the green light to go ahead with reform.. Now, the administration needs to implement the legislation to so that we can see what works and what doesn’t. This will take time–but only then will we be in a position to revise, refine and improve on reform legislation. .

I hope you’ll read the entire post--and come back here to comment.

 

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Truth Squad: Is “Obamacare” Pushing Health Care Spending Higher? What Will Happen in 2014?

In last Tuesday’s debate Mitt Romney suggested that, under Obamacare, health insurance premiums have spiraled by $2,500 per family. Not true.  (Hat tip to Healthcarefinancenews.com.)

 First let’s get the number right: According to an annual survey of employer plans  by the Kaiser Family Foundation and Health Research & Educational Trust, since the Affordable Care Act (ACA) passed in 2010, the average annual premium for family coverage has risen by $1,975 not $2500.  $1975 is a hefty sum, but 20% less than Romney claimed.

More importantly, $1,975 represents the combined increase in contributions made by employers and employeeswith employers picking  up the lion’s share of the hike. “In reality, premiums paid by employees haven’t changed that much.Factcheck observes. In fact, when you look at the rise in how much employees contributed, “the federal health care law was responsible for a 1 percent to 3 percent increase because of more generous coverage requirements.” In other words, employees were paying a little more, but getting value for their dollars.

After telling a whopper about how much employee’s health care premiums have risen in the past, Romney went on to assert that if Obamacare is  “implemented fully, it’ll be another $2,500 on top” of that. His evidence?  None.

                                              The Media Spreads the Myths

Yet the media continues to swallow the notion that under “Obamacare” health care spending will levitate. A few days ago, the Washington Post’s Robert J. Samuelson wrote: “Almost every expert agrees that controlling health costs is the crux of curing chronic budget deficits. Health-care spending already exceeds a quarter of federal outlays. With Obamacare’s coverage of the uninsured starting in 2014 and retiring baby boomers flooding into Medicare, the share is headed toward a third.”

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Breakfast with Atul Gawande

Sunday, Boston Surgeon Dr. Atul Gawande spoke at the New Yorker Festival about the importance of a hospital being able to “Rescue Success from Profound Failure.”   (Long-time Health Beat readers will recognize Gawande as the author of Complications: A Surgeon’s Notes On An Imperfect ScienceThe Checklist Manifesto  and a number of brilliant New Yorker articles that I have written about in the past, including: “Letting Go: What Should Medicine Do When it Can’t Save Your Life?”,  “It Will Take Ambition It Will Take Humility,” and  “The Fight for the Soul of American Medicine”  (Hat-tip to the New Yorker for publishing so many stellar articles illuminating an extraordinarily complicated subject: healthcare and healthcare reform.)

Before Gawande’s talk began, IBM, the event’s sponsor, hosted a small breakfast where Gawande spoke informally to a group of doctors, health plan executives, hospital administrators and people from IBM who are in the vanguard of healthcare reform. The New Yorker was kind enough to invite me to attend the breakfast and blog about the conversation.

                              Less Expensive Medical Care Can Mean Better Care   

At Sunday’s breakfast Gawande began by observing that “in just the past four or five years we have seen a huge shift in the national conservation about health care.” Since 2007 or 2008 many have come to realize that when it comes to medical care in the U.S., “there is no direct relationship between the amount of money spent and positive results.”  In other words, although we spend twice as much as many other developed countries on health care, medical care in the U.S. is not twice as good. In some ways it is worse.

Yet this epiphany is not as discouraging at it sounds. As Gawande pointed out, “Recognizing that expensive care does not necessarily equal top-quality care has enabled a decoupling of the two issues in the public mind, and opened up the possibility for real beneficial change in the system. The Affordable Care Act’s goal” of securing high quality care for everyone is, in fact, affordable. “We don’t have to ration care.”
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