Why Obamacare's Health Care Cost Controls Won't Work

Our sad, failed history of technocratic cost controls.

(Page 2 of 2)

Obamacare is not the only major legislation passed under President Obama to attempt to control health care costs. The 2009 stimulus bill also included some $30 billion in incentives for hospitals to adopt new information technology systems. The goal, according a memo drafted by health advisers to President Obama’s first campaign, was to use health care information more prudently in order to “produce savings in health spending.” Yet an investigation published by The New York Times in September found that the new health I.T. systems were actually helping hospitals bill Medicare to the tune of up to $1 billion a year more. The stimulus spent billions of taxpayer money on new technology that was supposed to cut costs—but it ended up making the government’s biggest health program more expensive.

The truth is that all we really know about health care cost control is that we don’t know very much at all. When the Congressional Budget Office released a report examining the results of 34 Medicare pilot programs intended to improve the cost and quality of health care, it found little success. "On average, the 34 programs had little or no effect on hospital admissions," the report said. "In nearly every program, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered." It also looked at four programs intended to reduce spending through payment incentives to provider organizations. One focused on heart bypass savings showed a 10 percent savings. But the other three "appear to have resulted in little or no savings for Medicare."

Summarizing Medicare’s history of attempted care and cost-control innovations, CBO Director Douglas Elmendorf gave little reason for hope. “The demonstration projects that Medicare has done in this and other areas are often disappointing,” he said in 2011 congressional testimony, according to The Fiscal Times. “It turns out to be pretty hard to take ideas that seem to work in certain contexts and proliferate that throughout the health care system. The results are discouraging.”

Indeed they are. Which is why we shouldn’t count a significant payoff from the latest round of technocratic tweaks either. Adjusting the program’s payment system is not enough. The way to reduce spending on Medicare is to cut spending on Medicare, by overhauling the system’s benefits and eligibility structure—and the time to start the process is now.

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  • ||

    There’s little question that what’s ultimately driving the nation’s long-term debt is entitlement spending

    Military spending was 699 billion in 2011 and nonmilitary discretionary spending was 600+ billion in 2011

    Over 1300 billion is not a little question.

  • ||

    I should also point out that the the reason a high debt to GDP ratio hurts growth is becosue governmetn pushes out private interests.

    In other words instead of inovating companies are looking for green jobs hand outs or like warren buffet instead of investing in companies that can turn a profit he is running after TARP money, or like GM instead of inventing the new light bulb is putting resources to its accountants and tax lawyers so it doesn';t have to pay taxes, or like wall street instead of investing in private enterprise is holding its money and getting interest payments from the federal government...the list goes on.

    Anyway the bulk of this government pushing out private interests is not found in entitlement spending but in fact found in discretionary spending.

    If you really want to get the economy going (which in turn would increase revenues) by reducing the Debt-to-GDP ratio the first place you should look to cut is discretionary spending...not completely ignore it like Suderman did in his article.

  • ||

    "GM"

    Meant to write GE

  • Brandon||

    Right. Why would Suderman not talk about discretionary spending, which even according to your math is only 1/3 of federal spending, in an article about expanded entitlements? He must just be a racist, right?

    BTW, you do have some good points sandwiched in between your idiocy, but at least learn how to spell if you want to have any credibility. You misspelled GE, a two letter word, for Christ's sake.

  • GILMORE||

    you do have some good points sandwiched in between your idiocy

    really?

    i think i choked on idiot-bread before i found the pony in there.

    there's plain stupid....? then there's Run On stupid.. king of em all

  • ||

    What crawled up your ass and died?

  • ||

    He must just be a racist, right?

    Huh?

  • wareagle||

    If you really want to get the economy going (which in turn would increase revenues) by reducing the Debt-to-GDP ratio the first place you should look to cut is discretionary spending.

    because in a country with an aging population and an entitlement mentality, focusing on federal spending that is actually in keeping with the Constitution makes perfect sense.

    If you want to argue we spend too much on defense, no one here is going to complain. If you want to further argue that things like education don't even belong in the federal budget, ditto. But when you leave our THE drivers of ever-increasing federal spending, talking about the credibility of others is not very smart.

  • ||

    The fact that we had no recovery therefor no growth in revenues is a driver of debt.

    Stimulus and TARP and the continuation of that baseline spending into 2011 and 2012 are the reasons we have such a high debt to GDP ratio and why we did not have a recovery and prevents any recovery.

    Don't believe me that this is not a long term driver of concern?

    wareagle may i introduce you to japan's lost decades, japan's lost decades meet wareagle.

    I am sure you two have much to talk about.

  • ||

    We're pulling in record revenue and it's only enough to fund roughly 2/3 of our budget. That's a spending problem, not a revenue problem. Entitlements represent 1/3 of the immediate budget, but tens of trillions in future unfunded liabilities that will really be the drivers of future budgets. Failing to fuck enough people to pay for profligacy isn't a problem unless you're an amoral twat.

  • Red Rocks Rockin||

    wareagle may i introduce you to japan's lost decades, japan's lost decades meet wareagle.

    Japan's level of discretionary spending isn't the reason they can only bring in enough revenue right now to pay for interest on the national debt and their social security system.

  • Anton2013||

    Well I would like to say that, military spending is something important part but yes Medicare is on big concern these days and our President must look after it.

  • Brutus||

    They won't work because they weren't designed to work. They were designed to fail, so a benevolent Central State can ride to the rescue when the whole thing implodes.

  • scareduck||

    ^^^ THIS ^^^

  • Sevo||

    "Why Obamacare's Health Care Cost Controls Won't Work"

    They claims were lies from day one, that's why.

  • C. S. P. Schofield||

    Obamacare's Health Care Cost Controls won't work because, as far as I know, no attempted government cost controls have EVER worked as intended. Going back thousands of year. Which tends to explain why the history of China is such a mess.

  • ThomasJK||

    The first step--and most times the most important step--for controlling cost is a recognition that controlling costs and controlling prices are two very different tasks.

    The various yahoos that we have in Washington could easily, by fiat, control prices. They could also control costs if they were not such hopelessly lost yahoos. If our governments collectively took measures to keep all costs of all governments at all levels out of the operating costs of the healthcare delivery system and out of the operating costs of health and medical insurance providers then the PRICE of providing health insurance and medical care to the consumer could be reduced by more than fifty percent.

    What percentage of the money that is used to pay for the healthcare that is paid for by way of the various government programs do you think is paid for using money that is being collected from the healthcare delivery system or from the healthcare insurance industry as taxes, fees, fines, etc.? Just as important, what percentage of other government spending is being funded with money that is being collected from the healthcare delivery system, including as personal and household taxes that are being paid by system employees using money they are receiving as wages and salaries that come in by way of the system revenue stream?

    If our governments truly want to control COSTS, not just PRICES, then their opportunities to do so are immense.

  • Bill||

    Are you suggesting wage and price controls in the healthcare industry?

  • waaminn||

    One thing is for sure, greedy American Corporations will ALWAYS find ways around things like this. Its the American way!

    www.GetzAnon.tk

  • ΘJΘʃ de águila||

    This is not an attempt to control "costs". It is an attempt to institute a complete fascist health-care system to go with the fascist war state and fascist surveillance/police state.

  • Sarah Conner||

    Right on.

  • Kroneborge||

    This book actually does a very good job in explaining how to lower healthcare costs. The short answer is the expand the supply faster than the demand this will ship the price point lower (econ 101)

    http://www.amazon.com/American.....n+gridlock

    Obamacare on the other hand increases demand but not supply, this ensures higher prices

  • Sarah Conner||

    Working as intended.

  • nikea||

    A similar pay-for-performance pilot program launched in http://www.cheapbeatsbydreonau.com/ Medicaid also found no quality improvement.

  • uythsb||

    Merry Christmas

  • chenzhong||

    The prospects for Value-Based Purchasing look similarly unhelpful. A study by researchers at the University of Pennsylvania and the University of California found that the program is likely to have a “small impact on hospital payments”—probably not enough to incentivize http://www.sparklebaileybowuggsclearance.com/ better care or reduce costs.

  • zhonga||

    The prospects for Value-Based Purchasing look similarly unhelpful. A study by researchers at the University of Pennsylvania and the http://www.cheapbeatsbydretrad.....dio-1.html University of California found that the program is likely to have a “small impact on hospital payments”—probably not enough to incentivize better care or reduce costs.

  • Anton2013||

    I believe that government has to look Medicare on serious note and they must consider it as one important part of people life and they also needed it very much. Medicare Benefits is right of every American.

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