No doubt you’ve seen the ads. Barack Obama claims that John McCain plans to hollow out Medicare, arguably the most popular social program in America.
McCain says that just isn’t so.
The controversy began early this month when the Wall Street Journal reported that McCain plans major reductions in Medicare and Medicaid spending totaling $1.3 trillion over the text ten years. This will help pay for his health care plan. Douglas Holtz-Eakin, McCain’s senior policy adviser, told the Journal that “the savings would come from eliminating Medicare fraud and by reforming payment policies to lower the overall cost of care.”
Without question, there is money to be saved if Washington cracks down on Medicare and Medicaid fraud. But before reaping any savings, the government first would have to spend money to ferret out the fraudulent claims. And no one believes that Washington could recover anything close to $1.3 trillion. Meanwhile, “reforming payment policies” seems to suggest that McCain plans to pay doctors and hospitals less, at a time when many Medicare patients are having a hard time finding a primary care physicians—precisely because Medicare’s fees are already so low. This could reduce access to care.
Barack Obama quickly went on the attack with ads warning that McCain would take “Eight hundred and eighty-two billion from Medicare alone…requiring cuts in benefits, eligibility, or both.”
McCain’s camp fired
back, arguing that McCain had no intention of slashing benefits. The
“savings” would come from eliminating fraud, accelerating the
computerization of health records, speeding the use of generic drugs,
eliminating government subsidies for private Medicare Advantage plans,
and requiring high-income beneficiaries to pay more for
pharmaceuticals,.
Let’s look at this list, item by item. While electronic medical records
could reduce waste in the long run, experience has shown that it takes
at least ten years for healthcare IT to begin to pay off. In the
meantime, where would the Senator find the money to install the
technology and train doctors and hospital staff to use it? Electronic
medical records would be a fine investment: but this is not a way that
Medicare can save billions over the next decade. Speeding the use of
generics should reap some savings —though if you buy generics, you have
probably noticed that prices are spiraling. As for eliminating the
bonus that Medicare now lavishes on private insurers that offer
Medicare Advantage, that would trim spending by $16 billion. But that’s
still far from the $1.3 trillion that McCain aims to save.
Finally, what about the last item: “requiring high-income beneficiaries
to pay more for pharmaceuticals”? Let me suggest that this gets to the
heart of the matter. For the goal here is not so much to raise revenues
for Medicare as to shrink the size of the program.
When it comes to McCain’s plans for Medicare, the Wall Street Journal
story is only the tip of the iceberg. If you want to understand
McCain’s intentions toward Medicare you need to realize that his
objections to the program are firmly grounded in a conservative
ideology that can be traced back to Ronald Reagan. From a conservative point of view, the problem with Medicare is that it covers everyone.
This explains why both President George Bush and Senator McCain have
supported “means-testing” benefits, charging some seniors more than
others. It also sheds light on why Sarah Palin quoted Ronald Reagan in
her closing statement during the vice-presidential debate earlier this
month.
McCain’s Advisers Send a Signal
Begin with Palin. During the October 5 debate (the day before the Wall Street Journal
story about McCain’s new plan to fund his healthcare plan appeared),
Sarah Palin turned to Reagan, as she reminded her audience that if we
want to protect our liberties, we must be vigilant: “It was Ronald
Reagan who said that freedom is always just one generation away from
extinction. We don’t pass it to our children in the bloodstream; we
have to fight for it and protect it, and then hand it to them so that
they shall do the same, or we’re going to find ourselves spending
our sunset years telling our children and our children’s children about
a time in America, back in the day, when men and women were free.”
Some observers took this moment as an example of Palin’s naiveté.
Apparently she didn’t know that these famous lines came from a speech
that Ronald Reagan had recorded for the American Medical Association
(AMA) in 1961, railing against the evils of that dark plot to undermine
our liberties…Medicare.
Palin probably didn’t know the source of the quotation. But the McCain
advisers who prepped her for the debate most certainly did. Those lines
are treasured by Reagan’s many admirers. By quoting that particular
speech, the McCain camp was signaling how it views Medicare—the day
before the Wall Street Journal would announce that McCain planned to
radically cut Medicare’s funding. To understand the message, it’s worth
going back to 1961.
Reagan Leads a Secret Operation Aimed at Housewives
At the time, the Democrats were proposing, the “King-Anderson” bill, a
proposal, backed by President John F. Kennedy, that would create a
program much like modern Medicare, covering all Americans over 65. The
AMA vigorously opposed the legislation. The physicians’ guild saw
Medicare as one step forward on the slippery slope toward “universal
coverage,” which the AMA called “socialized medicine.”
Enter the Woman’s [sic] Auxiliary of the AMA an organization composed primarily of the wives of member physicians. In an essay
titled “Operation CoffeeCup: Ronald Reagan’s Effort to Prevent the
Enactment of Medicare,” Larry DeWitt, a public historian for the Social
Security Administration, describes how the Woman’s Auxiliary was asked
to launch a special high-priority initiative under the title of WHAM,
Women Help American Medicine in 1961.
“The avowed aim of WHAM was bluntly stated,” DeWitt reports: “This
campaign is aimed at the defeat of the King-Anderson bill of the 87 th
Congress, a bill which would provide a system of socialized medicine
for our senior citizens and seriously curtail the quality of medical
care in the United States.” (Thanks to The New Republic’s Jonathan Chait and Dr. SteveB on Daily Kos for calling attention to DeWitt’s excellent essay.)
“The AMA’s campaign against the King-Anderson version of Medicare was
a complex, extensive, and well-financed lobbying tour-de-force,” DeWitt
continues. “Many aspects of the WHAM campaign were very public and
visible. The AMA placed advertisements in major newspapers and funded
radio and television spots, all deploying the usual red-brush of
‘socialism,’ and even the specter of jack-booted federal bureaucrats violating ‘the privacy of the examination room.’”
But DeWitt reveals, “there was also a more stealthy component to the
campaign,” one that depended for its success on its sponsorship and
origins being hidden from the members of Congress who would be lobbied
under its aegis. This was Operation CofffeeCup,” and Ronald Reagan was
its star.
Operation CoffeeCup arranged a series of coffee-klatches hosted by the
members of the Woman’s Auxiliary. “The Auxiliary members were
instructed to downplay the purpose of the get-to-gathers,” DeWitt
explains, “depicting them as sort of spontaneous neighborhood events:
“Drop a note—just say ‘Come for coffee at 10 a.m. on Wednesday. I want
to play the Ronald Reagan record for you.’”
In 1961, Reagan’s film career had faded and he was contemplating a move
into politics. With that in mind, in agreed to become the AMA’s
spokesperson, recording a 19-minute LP vinyl entitled “Ronald Reagan
Speaks Out Against Socialized Medicine.” (You can hear Reagan’s silky
voice on YouTube.)
Reagan’s impassioned address was followed by an 8-minute speech by an
unnamed announcer. Reagan’s work on behalf of the AMA was, listeners
were assured, unpaid (although there was no mention of the fact that
Reagan’s father-in-law was a top official of the AMA) and was motivated
only by his own strong political convictions on the issue.
Meanwhile, “the attendees at these coffees were trained and encouraged
in writing apparently spontaneous letters to members of Congress
expressing their strong opposition to the pending King-Anderson bill.
It was essential, the attendees were instructed, that their letters
appear to be the uncoordinated, spontaneous, expressions of a rising
tide of public sentiment.”
Reagan’s speech was “a determined and in-depth attack on the principles
of Medicare (and Social Security),” DeWitt points out, “going well
beyond opposition to King-Anderson or any other particular piece of
legislation.”
In the recording, Reagan described “the idea that all people of Social Security age should be brought under a program of compulsory health insurance” as an “imminent threat.”
He emphasized the breadth of the plan, explaining that it would cover,
“not only our senior citizens” but “those who are disabled” (just as
Medicare does today.)
Reagan urged his listeners to write to their Congressmen telling them
that “We do not want socialized medicine…[we] demand the continuation
of our traditional free enterprise system.
“Call your friends, and tell them to write . . . If you don’t,” Reagan
warned, “this program I promise you, will pass just as surely as the
sun will come up tomorrow. And behind it will come other federal
programs that will invade every area of freedom as we have known it in
this country, until, one day… we will awake to find that we have
socialism. And if you don’t do this, and if I don’t do it, one of these
days, you and I are going to spend our sunset years telling our children and our children’s children, what it once was like in America when men were free.
Despite efforts to keep Operation CoffeeCup under the radar, Reagan’s
role in the AMA campaign was revealed, in a scoop by Drew Pearson in
his Washington Merry-Go-Round column, “Star vs. JFK” :
Pearson wrote: “Ronald Reagan of Hollywood has pitted his mellifluous
voice against President Kennedy in the battle for medical aid for the
elderly. As a result it looks as if the old folks will lose out. He has
caused such a deluge of mail to swamp Congress that Congressmen want to
postpone action on the medical bill until 1962. What they don’t know,
of course, is that Ron Reagan is behind the mail; also that the
American Medical Association is paying for it.
“Reagan is the handsome TV star for General Electric…Just how this
background qualifies him as an expert on medical care for the elderly
remains a mystery.”
Nevertheless, Reagan and the AMA carried the day. Medicare legislation
would not pass until 1965, after JFK had been assassinated.
DeWitt stresses that Reagan objected to Medicare because it was
universal. As an alternative, both Reagan and the AMA preferred the
Kerr-Mills bill, which offered an early version of Medicaid, paying
medical bills for those on welfare, or those who could qualify as
indigent. “By restricting federal programs to the ‘truly needy’ these
programs could be kept small,” DeWitt explains, “involving few if any
middle-class or upper-class Americans. . ..”
Medicare, by contrast, was a program that included all seniors as well
as the disabled. Based on a collective vision of society, it was a
program that might create social solidarity—as indeed it would. And
conservatives knew that there was a danger that when younger Americans
saw how well Medicare worked, they might say “we want that too.” Some
might begin talking about “Medicare for All.”
So Reagan argued against universality: “Now what reason could the other
people [i.e. the Democrats] have for backing a bill which says we
insist on compulsory health insurance for senior citizens on a basis of
age alone regardless of whether they are worth millions of dollars,
whether they have an income. . . whether they have savings?” he asked.
“I think we could be excused for believing that . . . this was simply
an excuse to bring about what they wanted all the time: socialized
medicine.”
When Medicare legislation finally passed in 1965, some in Congress
continued to argue that more affluent Americans should not be eligible.
But the program’s supporters rejected that idea. They did not want
Medicare to become “a poor program for the poor.” They realized that
what makes Medicare special—and so popular—is the fact that it treats
all Americans over 65 equally.
McCain Echoes Reagan’s Position
Conservatives do not understand this. Or perhaps they do. In 2003, as
part of a veiled attempt to privatize Medicare, the Bush administration
opened the door to mean-testing, hiking premiums on Part B of the
program for Americans with incomes over $80,000—$160,000 for couples).
Seniors already had seen serious hikes in Part B premiums. “Between
2000 and 2007, all Medicare beneficiaries faced average annual
increases in Part B premiums of nearly 11 percent,” the Medicare
Payment Advisory Commission (MedPac) pointed out in its March 2008 report. “Over the same period, Social Security benefits, grew by just 3 percent a year.
The new increase for wealthier seniors was slipped into the Medicare
Modernization Act of 2003, the SeniorJournal.com reports: “a Republican
dominated committee quietly added a provision to the Act, which was
not included in the versions passed by the House or Senate, that would
add a surcharge to the Part B Medicare premium for more affluent
seniors. The 13 percent surcharge will begin in 2007 and be phased in
over three years. According to the Congressional Budget Office,
the means test will affect about 1.2 million beneficiaries in 2007 and
2.8 million by 2013. Medicare has made no public mention of this
change, not even in the July fact sheet on Part B costs, which
estimated the Part B premium for 2007 would be less than $100 per
month.”
Today, the surcharge has kicked in, driving a wedge into the Medicare
program. For the first time since Medicare’s creation 43 years ago,
seniors are no longer paying the same amount
for the same services. By January 2009, higher-income beneficiaries
will be paying 1.4 to 3.2 times the standard Part B premium, depending
on their incomes. The standard premium for individuals earning less
than $85,000 will be $96.40. By contrast, more affluent seniors will
pay premiums that range from $134.90 to $308.30.
And now John McCain has proposed more means-testing, arguing that
Medicare beneficiaries with incomes over $82,000 should also pay more
for Medicare Part D, the prescription drug benefit. Echoing Reagan’s
objection to covering the wealthy under Medicare, McCain has called the
drug benefit a “new and costly entitlement” that included many people
“who could buy insurance on their own without government help—people
like Warren Buffet and Bill Gates. By making them pay more for their
medicines than some worker who spent his career in the coal mines, the
country could save billions of dollars that could be returned to
taxpayers or put to better use.” According to McCain adviser Douglas
Holtz-Eakin, the proposal would affect the richest 5 percent of
Medicare beneficiaries and save the system about $2 billion a year.
On the face of it, this sounds fair. Bill Gates doesn’t need my
Medicare dollars. But McCain isn’t talking about only excluding
billionaires. He proposes making Medicare less attractive to a large
swathe of the upper-class and upper-middle-class—everyone earning over
$82,000 ($164,000 for couples).
And why stop there? As Trudy Lieberman pointed out in the Columbia Journalism Review,
in April, McCain adviser Douglas Holtz-Eakin tipped his hand when he
told the Washington Post: “You could make this as aggressive as you
want to get more savings.” In other words, Lieberman added, “if the
government saves $2 billion by making couples with incomes greater than
$164,000 pay higher premiums, it could save $6 billion by moving down
the income ladder to, say, $100,000 or even less.”
“Many health care advocates see McCain’s proposal as just another
opening to privatize and destroy Medicare as a social insurance
program, under which everyone who has paid into the system is entitled
to equal benefits as a matter of right,” Lieberman observed. “If drug
benefits, [like part B premiums] are based on income, critics fear that
support for the program will eventually erode as those with more
choices and more money will opt out of the program and buy coverage
from private insurers.”
After all, at a certain point some upper-middle class and many
upper-class seniors may well decide that they could get better care at
a lower cost if they dropped out of Medicare Part B (which, like Part
D, is voluntary) and used the $308 monthly premiums to purchase a plan
from a private insurers. One can easily imagine insurers offering
seniors relatively low-cost high-deductible plans that cover what Part
B and D cover—physicians’ visits, out-patient care and prescription
drugs. (Meanwhile, Medicare Part A would continue to shield seniors
from the charges that even the wealthy fear: hospital bills.)
Switching to private insurance to cover doctors’ bills would offer
well-heeled beneficiaries some advantages. Today, many doctors are
refusing to take Medicare patients because the fees Medicare pays many
physicians are low.
Wealthier seniors might prefer a private plan that lets them choose
from a wider range of physicians. If they switched to private
insurance, they could pay down their deductible while giving their
doctors say, 15 to 20 percent more than Medicare would allow.
Of course, this would mean that even more doctors would refuse
Medicare, leaving middle-class and upper-middle class seniors who earn
less than $82,000 (and pay only $96 for Part B) with many fewer
physicians to choose from. In this way, Medicare would become a
two-tier program.
“Those left in Medicare will likely be the poorest and the sickest with
few options,” Lieberman points. Experience tells us that private
insurers will shun sicker seniors, leaving them on Medicare, where they
would push the program’s premiums ever higher. Meanwhile, healthier,
wealthier seniors who opt out of Part B and Part D will be opting out
of what Lieberman rightly describes as “a compact among generations and
made it possible for people to have health care when they are old and
need it.”
Under this scenario, that compact would be threatened. After all, if
some seniors begin opting out of Part B, younger, affluent Americans
might well ask, “Why should I continue to pay the full payroll tax for
Medicare? I only plan to use Part A. I’ll let the government know I’m
not interested in Part B and they can cut my contribution accordingly.”
This leaves just one question: how would Medicare stay afloat if only
lower-income employees are shelling out the full tax?
Finally, how confident do you feel that private insurers would
reimburse for all of the benefits that Medicare now covers? What would
happen to upper-middle class seniors who purchased a high deductible
plan if their retirement savings suddenly swooned? Would they find
themselves putting off needed care because they couldn’t afford the
deductible? Would Medicare still be there if they decided to switch
back? For decades, Medicare has served as a safety net that all
Americans could count on—rich or poor, sick or well. This is why we
call it a “social safety net.”
The Conservative Agenda
Keep in mind that when conservatives talk about means-testing, their
goal is not to put Medicare on a firmer financial footing by raising
co-pays for wealthier beneficiaries. Their aim is simply to drive more
affluent seniors out of Medicare and into the arms of private insurers.
At that point, health care advocates warn, Medicare would become
welfare for low-income seniors and middle-class seniors. And just have
much political support would it have then?
Finally: even if McCain is not elected, keep an eye on Congress. There
are more than a few legislators who would like to gradually shrink
Medicare, killing the program by inches.
One cannot help but remember what House Speaker Newt Gingrich said
in 1995, when calling for Medicare cuts: “We don’t want to get rid of
[Medicare] in round one because we don’t think it’s politically
smart…but we believe that it’s going to wither on the vine because we
think [seniors] are going to leave it voluntarily.”
On the face of it, “means-testing” Medicare sounds so reasonable. By
contrast, reforming Medicare to raise quality and contain costs would
be a tough job. As I’ve discussed in the past,
if done right, Medicare reform could serve as a model for national
health care reform that included a public sector plan open to everyone.
This is just what conservatives fear.
It would be so much easier, they say, to just raise co-pays on more
affluent seniors–until finally Medicare becomes a model for nothing.
At that point, those who oppose “Medicare for All” can breathe a sigh
of relief.
Explaining Socialism- for those of you who don’t understand what “spreading the wealth around” means.
It’s Halloween and you go out with your friends and trick-or-treat for hours- knocking on doors in the dark and the cold, collecting all your candy goodies.
When you get home, cold, tired and hungry you begin to sort through your hard earned Halloween treats and then- “THEY” step in and say “Stop! You must give US half of your candy (since you have SO MUCH)- so that WE can give it to the children who were too lazy to buy or make a Halloween costume and exert the effort to go out into the dark and cold- to get THEIR SHARE.”
THAT, People, is what Socialism is about.
McCain-Palin 2008
Don’t let the media, polls, pundits or long lines discourage you!
VOTE McCain Palin 2008!
You’ve laid out the background and various motivations for this change, but what would it do to costs?
It seems like the public payer and relatively limited personal payments have helped costs soar to the moon.
Would shrinking Medicare and encouraging seniors with the means to get coverage from other providers work to hold down costs and wasteful care?
If it wasn’t socialism when the Bush administration gave huge tax breaks to the wealthiest 1% of Americans eight years ago, it’s not going to be socialism giving tax cuts to the other 99% under Obama.
The Bush administration moved toward socialism by taking ownership stakes in private banks that moved our nation towards a new era of government socialistic engagement with business.
The only people who have bought the line: Obama is a socialist, he wants to spread the wealth…..are the numbnuts. It’s not registering with anyone who is smart.
Very Prescient. From yesterdays WSJ:
Senior Liberation Act
Why you can’t get Social Security if you refuse Medicare.
*************************************************
For all of America’s cherished belief in choice and freedom, it remains an astonishing fact that the U.S. government forces citizens over the age of 65 into a subpar health plan of its choosing. And so it is with some hope that we greet a new federal lawsuit that aims to allow senior citizens to flee Medicare.
The suit comes courtesy of Kent Masterson Brown, a lawyer who has previously tangled with the government over Medicare benefits. Mr. Brown represents three plaintiffs who are suing the federal government to be allowed to opt out of Medicare without losing their Social Security benefits.
Amazingly, this is not currently allowed. While the Social Security law does not require participants to accept Medicare, and the Medicare law does not require participants to accept Social Security, the Clinton Administration in 1993 tied the programs together. Under that policy, any senior who withdraws from Medicare also loses Social Security benefits.
Mr. Brown’s plaintiffs are three men who do not want to be in Medicare, even though they paid Medicare taxes throughout their income-earning years and though they are not asking for that money back. The three instead saved privately to cover their health care expenses. They now prefer to contract with private doctors and health facilities that they believe are superior to those offered by Medicare.
They don’t want to be rationed by a government program facing budget constraints. And they desire, for reasons of privacy, not to have their medical claims in the hands of a federal bureaucracy. One of the plaintiffs, Brian Hall, is a retired federal worker who contributed throughout his career to a health savings account. If required to take Medicare, he will no longer be allowed to make deposits for his medical expenses.
Meanwhile, the three plaintiffs also have contributed considerable sums to the Social Security trust fund. All three understandably want to be paid the monthly retirement benefits that they have duly earned. Yet to do that, they must agree to enroll in Medicare.
The Clinton Administration tied Medicare and Social Security together for the same reason Congress in the 1990s barred Medicare enrollees from supplementing their government care: They don’t want a “two-tier” health system. Equity trumps freedom, even if it means poorer care. The Bush Administration has stuck with this misguided policy, despite a need to relieve pressure on runaway entitlement programs. If even 1% of Medicare-eligible retirees voluntarily opted out, Medicare expenditures would decrease by about $1.5 billion a year, and by some $3.5 billion a year by 2017.
The suit itself has strong legal merit. Not only have two Administrations implemented policy that has no root in the applicable laws, their “rules” are no rules at all. Neither Administration bothered to put its extraordinary policies through an official rule-making in which they would have been required to notify the public and invite comments.
Mr. Brown fears the feds will argue they have “administrative remedies” for these situations (say, allowing certain individuals to opt out) and that the suit should therefore be dismissed. No judge should buy it. Mr. Brown has included information from another individual who attempted to disenroll from Medicare by petitioning the Department of Health and Human Services. The agency refused to address his case.
D.C. Circuit Judge Rosemary Collyer should invalidate these policies and ask Congress to clarify the matter. Will Members really argue that prudent Americans shouldn’t be allowed to pay for their own medical care or even make their own health-care choices?
Please add your comments to the Opinion Journal forum.
a provocative argument and a growing number of rich people may well indeed opt out of Part B as their premiums explode. don’t understand the problem inasmuch as the government puts in three dollars for every one the beneficiary pays in premiums. So each time someone opts out, the government actually saves money. This, of course, has no impact on the trust fund, which is where the real stress Holtz Eakin worries about lies.
What puzzles me is why we’re concerned about income-based premiums for the optional Part B program while we’re indifferent to the income-based taxes that fund part A. Rich folks are paying hundreds or even thousands more for Part A coverage, but ultimately receiving the same benefits (if they live long enough to claim them.
seems to me there’s a need for a consistent position here between Parts A and B. Right now the rich pay substantially more for both, which is fine with me. Saying that’s fine for A but bad policy for Part B is an argument that befuddles me.
“there is money to be saved if Washington cracks down on Medicare and Medicaid fraud.”
The first time I heard that was about 1978. Every president since has promised to end fraud.
Immense amounts of money is spent on investigations and on compliance program. There are good returns, but not in the trillion range.
If you read the leftist economists, many want to cut health care spending (as a % of GDP) in half.
And how will that happen?
Truth is the first casualty of politics.
“there is money to be saved if Washington cracks down on Medicare and Medicaid fraud.”
The first time I heard that was about 1978. Every president since has promised to end fraud.
Immense amounts of money is spent on investigations and on compliance program. There are good returns, but not in the trillion range.
If you read the leftist economists, many want to cut health care spending (as a % of GDP) in half.
And how will that happen?
Truth is the first casualty of politics.
“Keep in mind that when conservatives talk about means-testing, their goal is not to put Medicare on a firmer financial footing by raising co-pays for wealthier beneficiaries. Their aim is simply to drive more affluent seniors out of Medicare and into the arms of private insurers. At that point, health care advocates warn, Medicare would become welfare for low-income seniors and middle-class seniors. And just have much political support would it have then?”
It may be some. For most it is the notion that entitlement programs and public benefits should be subject to some level of means testing. It sounds reasonable because it is. I appreciate your open admission that maintaining political support for the program is the primary motivation by liberals rather than the financial soundness of the program (yes, you’re an ideologue). But hey, if you and the Illuminati all meet in the back room and figure out comparative effectiveness it should all be fine. Meanwhile, just extend this program that is facing a massive shortfall to everyone and we’ll figure out the funding details later. Also, under what premise does raising cost sharing drive seniors to private insurers? Subsidized Medicare will still be the best deal they have going.
Means testing in Medicare is a foregone conclusion. Probably another 15-20 years, but it will happen because they’ll have no other choice, pipe dreams aside.
Alex,
Thanks for your comment.
Alex–You write: “But hey, if you and the Illuminati all meet in the back room and figure out comparative effectiveness it should all be fine. Meanwhile, just extend this program that is facing a massive shortfall to everyone and we’ll figure out the funding details later.”
First, there is already legislation in Congress to create a “Comparative Effectiveness Institute” sponsored by the chair of the SEnate Finance Committee.
It stands a very good chance of passage next year, and would then likely be used by Medicare to determine co-pays (low or no co-pay for the most effective treatments,very high co-pays for ineffective treatments) and to reward physicains and hospitals for providing higher-quality care (higher payfor using the most effective care.)
No one expects that doctors will be required to follow what the comparative effectiveness agency determines is the most effective treatment for patients meeting a certain profile, but these incentives, both for doctors and for patients, should have a real impact.
And they are likely to save Medicare money because very often the newest, most expensive treatment is not the most effective. Sometimes the treatment offers no
benefit.
Moreover, as the Medicare Payment Adisory Commission pointed out in a recent report, the Institute won’t need to re-invent the wheel. We already have a lot of comparative effectiveness information in reserach done by U.S. govt agencies and in research done abroad. We just haven’t been using it because the Bush administration tied Medicare’s hands.
(McClellan has apologized to physician/researchers about this, saying that Bush insisted that he spend all of his time and resources getting the Medicare Modernization Act passed,rather than pursuing evidence-based medicine.
But now the Bush administration will be gone.
Comparative Effectivenss reserach is not a pie-in-the-sky idea. Its time has come.
As for rolling out national healthcare and then worry about the details of financing . . perhaps you’re new to the blog.
I have written repeatedly about the need to reform Medicare before attempting universal coverage.
I’ve put together a working-group composed of ten extremely prominent physicians and public-health experts who will be coming out with a report on Medicare reform in January.
The report, which follows many of the Medicare Payment Advisory Commission’s recommendations, begins with the premise that Medicare reform could serve as a blueprint for
national health reform.
There is no point to pouring money into a broken system. We need structural reform first.
The goal of Medicare reform is not only to save money but to raise the Quality of Care.
About one out of three Medicare dollars is spent on ineffective, unnecessary, overpriced treatments. We need to wring out the waste.
Finally, maintaining broad-based political support for Medicare is essential.
The lack of social solidarity behind healthcare in this country expalins why our healthcare system not nearly as good as healthcare in many other developed countires.
The French have a very good system, in large part because the French believe that nothing is too good for another Frenchmen.
Unfortunately, we do not feel that way about each other.
Anything that divides us further, by class (such as charging the wealthy higher premiums) will only underminet he program.
And trust me, wealthier Aemricans will drop out. See the editorial from the WSJ that Brad includes in his comment below.
Brad, rustbelt, JIm
Brad–Thanks very much for
the piece from the WSJ. I didn’t realize that the Clinton administration tied Medicare to SS in that way.
If we want to avoid two-tier care, that was a wise move. But if this test-case goes all the way to the Supreme Court, I would guess that, given the composition of the Court, the plaintiffs will win.
I do sense that there are two distinct trends in this country today.
In these hard economic times, some people will be interested in building more social solidarity, while looking to the government to help those who are hit hardest (the unemployed.)
Others will want to separate themselves from the herd, hoping that they can do better on thier own. They will advocate “personal reponsibilty” (i.e. every man for himself.)
Much turns on who is elected. Obama clearly is more likely to try to get us to pull together. (I think of Hillary’s “It takes a village” theme.)
In the Thirties, you saw the same two trends. The New Dealers sought solidarity while those who hated FDR (and many did) saw him as “a traitor to his class.” FDR’s reponse (referring to Wall Street)”They hate me and I welcome their hatred.”
These two trends represent two irreconcilable political ideologies. This is why I don’t see much room for bipartisan compromise in the next Congress–unless the Democrats simply fold. Which they might, because the New Democrats really don’t represent the lower “40 percent of the population” that FDR was trying to represent.
On the other hand, if things get bad enough, Obama may feel he has to stand up for the working class. Yesterday I learned that he is no longer talking about taxing only those earning over $250,000– but rather those earning over $200,000. I suspect that eventually he’s going to find that in order to raise the funds we need, he’ll have to tax those earning over $150,000–and he’ll still be very far from taxing the true “middle class.”
This would mean that, like FDR, he would have to accept being hated by some.
I’ll take a look at the WSJ Forum–thanks again,
Rustbelt–
Yes, we could/should
spend more on fraud investigation– the returns woudl cover the cost. But, as you say, we wouldn’t save anything close to a trillion dollars.
As for cutting the amount that we spend on healthcare (as a percent of GDP) by half, I’m not sure what “leftist economists” you have in mind. I’ve never read anything like that.
Probably 1/3 of our health care dollars are waste, but no one expects that we can cut spending by 1/3.
If we wring out the waste, however, we can definitely slow down the GROWTH of healthcare spending.
We can’t afford to have spending on healthcare outpace growth in workers’ wages or growth in GDP. Other countries (such as Sweden) have managed to keep health care spending to a fixed percent of GDP for many years, even though their popoulation is aging faster than ours.
We can do it too.
Jim–
The wealthy pay more in payroll taxes for Medicare over roughly 40 years because Medicare taxes, like income taxes are progressive: based on a percent of income.
If you earn less in one year, you pay less. If you earn more another year, you pay more. In other words, you pay what you can afford at the time.
Co-pays are something entirely different. You pay co-pays for Part B treatment as you receive the treatment, after you are 65.
AT that point you are probably living on a fixed income (let’s hope your savings are not invested in stocks–a very poor idea after 65) and the original Medicare legislation decided that, at that point, all seniors would be treated alike.
All would recieve comprehensive care–at very little cost. (Originally, I’m pretty sure that their were no co-pays or deductibles).
The premise was that everyone would pay what they could afford (based on income) into the pool during their working years, and everyone would draw from the pool, based on their medical needs, after 65.
From each according to his ability, to each according to his needs. And in your old age, you would have peace of mind–you wouldn’t have to worry about how much yoru healthcare would cost.
Even today, a senior “earning $80,000” (which often means that Social Security plus the money he withdraws from his 401k equals $80,000, before taxes, which could bring it down to, say, $60,000) may find the increased premiums (with surcharge) a burden. It depends on what his mortgage or rent costs him (especially if he is in an assisted livign facility or has a house that requires a lot of upkeep), what state he lives in, etc.
Gregory, Ginger, Alec
Thanks for commenting.
Gregory– I agree. Obama
is not a socialist. Though
as I said in a reply to Brad, I think the hard times ahead may push him to redistribute income (downward)– a pendulum swing away from the trend of the past 20 or so years (redistributing wealth upwards.)
Ginger–
No,if some people left Medicare to buy private insurance, that wouldn’t help contain costs.
In recent years, (since 2000) Medicare has done a better job of reducing spending than private insurers.
Even since the backlash against managed care in 1999, most private insurers just say “yes” to most treatments–whether or not there is any medical evidence that they are effective– and then the insurers pass the escalating costs on in the form of higher premiums.
And looking ahead, Medicare is much more likely to actually begin to use comparative-effectiveness reserach to adjust co-pays (much higher co-pays for ineffective treatents like PSA testing) and to pay doctors for quality (higher fees for doctors who prescribe the most effective treatmens.)
This will go a long way toward containing Medicare spending because right now the newest, cutting edge treagtments are often Not the most effective–but they are virtually always the most expensive.
What is driving health care costs ever higher is medical technology (see my recent post) not the fact that consumers have relatively little “skin in the game” (low co-pays.)
When it comes to big-ticket items, (hospitalizatoin, ICU, cancer drugs, chemotherapy, surgeries)
patients do not decide what care they want or need–doctos and hopsitals tell them what they need.
We have much reserach showing that health care inflation is driven by supply –not consumer demand. A consumer may “demand” an MRI–but those are comparatively minor expenses. And he’ll get the MRI only if the doctor perscribes.
Alec–
Fortunately, life is about more than trick-or-treating, and most of us are not children.
Everyone has a right to his or her political preferences, but I’m afraid your analogy
suggests a mental age of about 11.
There is a presidential nominee running on the 2008 Socialist Party USA ticket and his name is Brain Moore.
Merrill Goozner has the right idea about taking a brief interlude from all the negativity. Takin’ It Back with Barack, Jack.
http://www.gooznews.com/archives/001230.html
Thanks Niko-
There are complex legal questions posed by the case and others like it.
But it is high time that we start to rigorously apply self or externally imposed ethical standards to both Big PhRMA and the FDA. A good start would be “primum non nocerum”= “first do no harm”
I will not rest until especially Big PhRMA executives do jail time. Fines and lawsuits have not been enough to stop the greed driven corruption and excess.
The understaffed and underfunded FDA,like many other federal agencies,cannot properly regulate in a political environment where “regulation” is a dirty word
Dr. Rick Lippin
Southampton,Pa
ralippin@aol.com
MAGGIE MAHAR JOINS THE FEAR MONGERS
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