Running from the Cuts

It’s really pathetic that Team Obama is trying so hard to pretend they didn’t sorta maybe cut Medicare spending, unlike the evil evil Paul Ryan who … also … hasn’t … yet. You can read Avik Roy’s response here. The critical point is this:

Of [Obama’s] $716 billion in [Medicare] cuts, $415 billion come in the form of “updates to fee-for-service payment rates,” a euphemism for reducing Medicare’s payments to doctors and hospitals. But what happens when you reduce payments to doctors? Doctors stop being willing to see Medicare patients. And if you can’t actually get a doctor’s appointment, what does it really matter what your insurance plan covers on paper?

We already see this happening in the Medicaid program, where sick and injured children can’t get appointments to deal with urgent medical conditions, because Medicaid so severely underpays doctors relative to private insurers. By the end of this decade, under Obamacare, Medicare reimbursement rates are set to fall below those of Medicaid.

(Aside: The Obama people keep referring to their cuts as “savings”, a euphemism I find hilarious. Ryan also refers to his cuts as “savings” but because he has an R after his name and doesn’t want to socialize the whole smash, these become “savage, brutal, turing-grandma-into-fertilizer cuts”. But they are cuts. Don’t be ashamed of the word.)

Look, the reality is that Medicare is growing out of control and its “trust fund” will be exhausted in just a few years. Medicare spending is going to have be cut. As I said last week, that’s not even up for debate any more. The debate is over how. Ryan, to his credit, is trying to come up with a more sustainable system. Maybe it won’t work; maybe it’s a piece of shit. But it tackles the problem head on and admits to what it is doing.

By contrast, the Obama Administration is engaged in a great deal of deception. They are saying there are “no cuts in benefits” which is true as far as it goes. But the benefits are cut through the back door by cutting reimbursement rates (already near unsustainable levels) and hoping this, somehow, produces more efficiency in the system. IPAB is thrown in for good measure but we’ve already seen that Congress will happily override the IPAB any time a pet issue like breast cancer comes up.

The irony is that these cuts, such as they are, are unlikely to happen anyway. In fact, the AMA’s support for Obamacare was conditional on them not happening. Our politicians know what Roy does: that cuts of this magnitude would cause doctors to leave the system. They are barely able to keep up with the present reimbursement rates.

(In arguing this on another site, one liberal said this would lead to a decrease in “unnecessary procedures” and this was a good thing. Keep in mind: (a) that is rationing, by definition; (b) if providers leave the system, they’ll take a bunch of necessary procedures with them; and (c) every rate cut for the last 30 years has come with Medicare telling doctors to make it up with volume.)

I’m getting a little sick of this bullshit on Medicare. The Obama Administration already got called out by the CBO for claiming the $716 billion in “savings” for both deficit reduction and shoring up of the Medicare trust. Now they’re trying to pretend that this cuts are really going to happen but won’t result in decreased healthcare because … well, just because, that’s why!

I appreciate that the healthcare market is diseased. Over time, most industries see costs fall and quality go up. We have not seen this happen with healthcare (although, to be fair, it’s a lot more complicated than that). But the solution is not to cut prices and hope that some magic happens to improve healthcare quality. If Republicans suggested improving education by slashing teacher salaries in half, they’d be laughed off of the Capitol.

Medicare needs to be cut. Obama has to run away from that because seniors vote like hell. But if he’s going to do the necessary thing, he could do it in a sustainable way. He hasn’t and he won’t. And all the easy-on-the-eyes cliche-spouting senior advisors in the world aren’t going to change that.

Comments are closed.

  1. Hal_10000 *

    But that’s the point, salinger …. he didn’t implement the cuts. He promised cuts in the out years when we will no longer have to stand by them. And then he turned around and promised the AMA and ACS that those cuts would never happen.

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  2. salinger

    So when are the Obama cut scheduled to kick in. By the way the Romney ticket is going on about them you would think they already had.

    As it stands then – neither side is really doing anything except blowing smoke. Like I said, if these are such great plans why don’t they implement them now?

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  3. Section8

    And Obama and Boehner had a brokered deal that Boehner couldn’t keep. So what is your point?

    Ah yes, the grand plan. What was it 4 trillion in savings? I have yet to find one person that can give me details on this plan that Obama had, perhaps because he never released them. Do you have any insight into it?

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  4. hist_ed

    Over time, most industries see costs fall and quality go up. We have not seen this happen with healthcare (although, to be fair, it’s a lot more complicated than that).

    Laser eye correction has gotten both cheaper and better over time. It is not covered by most insurance, though people can use their health savings accounts. The market place at work-when people have to spend their own money, they take these things in to account.

    Vasectomies also have become cheaper and better over time. Since it is an elective surgury, people can take the time to shop around.

    I am sure there are other examples (boob jobs? liposuction?). Of course, one isn’t going to do cost comparisons on the way to the ER*, but for anything that can be scheduled, paying out of pocket and comparing costs will drive down prices and drive up quality.

    * I tried last summer. My son tripped on a gravel road and hit a pointy rock just so with his forehead. Nice little half inch demt in his head. We were on vacation, so my wife asked someone where the hearest hospital was and we drove there. Across the street was an urgent care place. I suggested we try them, but she insisted on the ER. We waited for an hour and an half with a sobbing 4 year old, then got him stiched up. After insurance we were out $150. The day after I called the urgent care-their price for stiches was about half the ER. My insurance company treats them as an office visit so it would have been a $20 co-pay.

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  5. Section8

    Well the link worked Salinger, so that’s the important thing.

    Looks like they did finally reveal some of what was in the grand bargain didn’t catch that, so thanks.

    At the same time the Daily Caller has a link to a Washington Post article on the negotiations. Sounds to me more like numbers kept getting shuffled around at the last minute. So it’s not really that everything was ready to go and then Boehner just walked away. Anyhow, I don’t trust any of these guys anymore. It’s all about smoke and mirrors. A tax increase that’s really a tax cut. A tax cut that’s really a tax increase. A budget cut that’s really not a cut, or just reworded to sound like one even though it’s an increase, consider something that’s going to be retired anyhow and call that a cut. It’s the same game we’ve heard for years.

    Daily Caller

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