Budget Deficit

IMF Joins CBO, CMS In Expressing Skepticism About ObamaCare's Medicare Cuts

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How dare you interrupt me during chart-making time!

When Medicare's chief actuary, Richard Foster, released a report on the likely effects of the Affordable Care Act, the big takeaway for most of the press was that total health care spending in the U.S. was projected to rise over the next decade. That was a big deal, but just as big a deal—possibly even bigger—was that Foster, who crunches numbers for the Center for Medicare and Medicaid Services, expressed skepticism that the Medicare cuts that pay for about half of the law's ten-year cost could be "unrealistic and unsustainable."

Now Foster's skepticism is echoed by a report on the coming budgepocalypse put out by the IMF. On page 43, the report warns that "the substantial decrease in Medicare payment rates [called for by the Affordable Care Act] to health care providers may prove difficult to implement."

In its numerous scores of the reform bill drafts, the Congressional Budget Office, of course, also provided cautious and carefully hedged warnings about the Medicare cuts, noting that, historically, Medicare cuts have not always been implemented as called for. But President Obama and OMB director Peter Orszag largely ignored those cautions and treated the CBO's deficit projections as facts instead.

Given that one of the president's key messages was that, once passed, the bill would reduce the national deficit, that's hardly a surprise: If the Medicare savings don't materialize, we'll see higher deficits instead. And the truth—"it might reduce the deficit, but we're not totally confident"—wouldn't have been much of a sales pitch.

I took a longer look at the PPACA's budgeting here.

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  1. “If the Medicare savings don’t materialize, we’ll see higher deficits instead.”

    You’re just being selfish.

    1. So, high deficits are like saying “Fuck the children!”, aren’t they? How do they reconcile this with doing everything for the children?

      I’m confused.

      1. “So, high deficits are like saying “Fuck the children!”, aren’t they? How do they reconcile this with doing everything for the children?”

        I think the confusing part is about who’s paying for all of this.

        I guess they want you to think it’s gonna be Wall Street. …or the rich. Or corporations? I dunno, but it isn’t supposed to be the children.

        “If the Medicare savings don’t materialize, we’ll see higher deficits instead.”

        Back to the dead horse, yeah, something’s gotta give, and there are two places where that’ll happen that don’t show up on anybody’s spreadsheet.

        One of them is the foregone technology. In the future, if ObamaCare stays on its present course, healthcare providers will have an enormous disincentive to invest in new and better equipment.

        …and the second line item that doesn’t show up anywhere is the care that people won’t get because of rationing. The sad, sorry fact is that however much the government spends on healthcare will be dived up between more and more people, so some will go without due to queuing, new restrictions on what’s “medically necessary”, etc.

        Say goodbye to that hip replacement you’re gonna need if a wheelchair costs less–that sort of thing doesn’t show up in the projections but it won’t show up in the deficit either.

        I doubt anyone in the Obama Administration will ever say it out loud–but the disincentive to pay for new technology and rationing? There are some substantial savings there.

        1. I get it now: It’s for the children while they are children. Once they become adults, fuck ’em!

          Strange attitude, but it does explain much.

  2. If? Seriously?

  3. Foster, who crunches numbers for the Center for Medicare and Medicaid Services, expressed skepticism that the Medicare cuts that pay for about half of the law’s ten-year cost could be “unrealistic and unsustainable.”

    No shit? No, really, you don’t say? You mean to say when you give away something, people might actually want more of it?

    Now Foster’s skepticism is echoed by a report on the coming budgepocalypse put out by the IMF. On page 43, the report warns that “the substantial decrease in Medicare payment rates [called for by the Affordable Care Act] to health care providers may prove difficult to implement.”

    Heh heh heh! This is happening as doctors are demanding that reimbursement levels are equivalent to third party reimbursements. Which is why OK doctors, as well as other states are demanding reimbursement levels that reflect the true cost of care. It’s a nightmare system and I’m opting out.

    1. That’s the key to what’s wrong, by the way…

      I’d actually be interested to see if Suderman’s changed his tune on that at all, but the fact is that Medicare and Medicaid only pay for a fraction of the true costs of care, and they stick private pay and cash patients with the bill for the difference…

      It’s even worse for hospitals.

      The real solution for healthcare is to either a) have the government pay the true costs of care instead of just a fraction or b) keep the private care system separate from the free government care.

      Mexico does the latter. If you can’t afford the private care, you go to a free clinic with government paid for care. Meanwhile, the private hospitals compete for private pay patients like restaurants or anything else–better services, cheaper costs, etc.

      The problem arises when you try to make private pay patients cover what you short change care providers for on government programs…

      There needs to be a private option. It’s the one thing no one has suggested, but it’s the solution…

      We need something like “chartered hospitals” if you will, sort of like chartered schools? Allow some hospitals in inner cities to only take private patients with no one being admitted–through the ER or otherwise–on a government program.

      And watch what happens.

      1. I’m certainly interested in this model. In fact, I’ll be spending the next year or so working on a long project about doctor-owned surgery clinics that take no government money and who post their prices online for all to see.

        1. Peter, see post below please.

      2. The problem arises when you try to make private pay patients cover what you short change care providers for on government programs…

        Agreed. And like with indigent patients that do not qualify for charity care, cost shifting ensues.

        We need something like “chartered hospitals” if you will, sort of like chartered schools? Allow some hospitals in inner cities to only take private patients with no one being admitted–through the ER or otherwise–on a government program.

        And watch what happens.

        Those are called Physician Owned Hospitals, Ken; Obamacare has specifically all but outlawed those. Obamacare has not outlawed private physician practice yet, i.e. if you don’t accept CMS, you don’t get to practice medicine. EMTALA prohibits any hospital from denying emergency care to anyone Ken, so that one is out too. I agree with you 100% Ken, but with most of the public believing that medical care is a right, as a opposed to a service, we’re fucked as a country regarding this issue. I am looking forward to a non CMS practice, but if some sort of bill is passed where each state medical board can suspend or modify licensure because I don’t accept CMS, I’m screwed. And I won’t be able to opt back in to CMS for until June of 2012. But again this is a worst case scenario, and I predicted a lot of this stuff last year when the senate was considering it’s bill.

        St. Vincents in NYC recently closed its doors after 160 years of operation.

        1. This just pisses me off to no end. I have no horse in the race for physcian-owned hospitals, other than just being a health care consumer, but this is downright fucking evil.

          “How can we improve our bottom line peformance at our community hospitals?”

          “Provide a better level of care and offer greater choice in services?”

          Nah, fuck that noise, we can just get the feds to hobble our competition. All in favor? The motion carries unanimously.”

        2. “Those are called Physician Owned Hospitals, Ken.”

          The beef against those hospitals is that they, essentially, siphon off only the most lucrative, outpatient codes and then leave the rest to be treated on Medicare/Medicaid’s tab…

          And there’s something to that.

          …but it’s still a question of ObamaCare like cost shifting–the rest of the healthcare system is using the lucrative codes to pad their losses on the weak ones, and they don’t want to lose out on that padding.

          I think you’ll find that at even at those physician owned hospitals, they’re still doing procedures on Medicare and Medicaid patients, especially outpatient procedures that don’t require a nurse and inpatient recuperation, etc.

          What I’m talking about is a truly insulated ER/hospital, the whole damn thing private…

          So, maybe they don’t have to operate an ER, maybe they get reimbursed at their rate if someone on Medicaid come into their ER.

          But isn’t it about licensing as much as anything? Some of the problems the physician owned hospitals were having were about licensing–the Bush Administration wanted to put the kabash on any new ones for what they were doing to the Medicare/Medicaid system. I know in the private hospital I worked at in LA, we were doing everything we could to get rid of our ER, and the regulators wouldn’t let us.

          It’s not an acute care hospital anymore, the number of private pay patients on the outskirts of South Central LA just couldn’t support a small private hospital like that and they had to shut it down, but just before we went under, they used to offer to call ambulances for people who showed up at the ER and didn’t have insurance.

          The regulators wouldn’t put up with that for long. My understanding is that you cannot expressly deny care to people because they don’t have private insurance–and that’s a huge part of the problem.

          I’m not up to date on the latest, but I do not believe you can license a hospital without a Medicare and Medicaid contract. …and you can’t get one of those contracts without meeting certain criteria, including having an ER.

          There need to be hospitals that deny care to anyone and everyone who isn’t private pay, and it’s my understanding that doctor owned hospitals aren’t allowed to do that either.

          There is no private option. Even at the doctor owned hospitals I think you’re talking about. They’re probably not trying to run them at a profit anyway since the doctors are making their money on the client side.

          Medicare is still underwriting a large part of those doctors’ business, and a lot of doctors, at least in large cities, are admitting their patients to more than one hospital. ’cause your patients will usually go to whichever hospital their doctor schedules them to… Hence the conflict of interest when he owns a part of one hospital. I don’t even think it’s about how much the hospital’s making even. It’s about them not losing any money.

          Anyway, I’m not talking about something like that, where Medicare and Medicaid are still underwriting a bunch of your costs away from the hospital, and you’re siphoning off some other hospital’s cushion from within the government program.

          I’m talking about total exclusion of everyone on a government program from a profit seeking healthcare provider. I could be wrong, but unless you’re talking about cosmetic surgery, etc., I don’t believe that exists.

  4. Foster, who crunches numbers for the Center for Medicare and Medicaid Services, expressed skepticism that the Medicare cuts that pay for about half of the law’s ten-year cost could be “unrealistic and unsustainable.”

    Somebody’s sentences are too complicated for his own good.

  5. noting that, historically, Medicare cuts have not always been implemented as called for.

    Anyone remember even one future cut that was eventually implemented?

    1. Actually, since 1998 or 1999 when Congress passed a bill that called for cuts to happen automatically at the end of every year that costs went up faster than the rate of inflation multiplied by the percentage increase in people covered, it has been rolled back every year *except* 2002, I think. Pelosi even did it in December of 2009, citing the “bad economy” and not rolling the costs back. Not too many people complained because pretty much everyone, left, right or middle, if not totally ignorant, knows that Medicare LOSES Doctors money to begin with.

      And they ahve already delayed the cuts that were *supposed* to happen immediately (to get that magic — NOT double counted the Democrats say — Half a TRILLION dollars back) like they were really going to screw 15-20 Million Americans right BEFORE the elections. They’ll wait until AFTER November to do that if they really intend to do so, which is really stupid, IMHO. As soon as they do that, expect MORE doctors to retire and Fewer to accept Medicare patients anymore. Sure, they will be covered, but will not be able to find a Doctor! A lot of good that will do! And Me, I am in my fifties and expect they will screw it up royal so that it can’t be fixed by the time I retire. So I hate Pelosi, Reid, Obama and ANYONE that stood with them on this fiasco.

      ;'{P~~~

  6. I look at what the really smart people with really impressive degrees from the really impressive universities are doing to America and suddenly a woman from Alaska with a funny accent and a no-name degree from a backwater school doesn’t seem so threatening anymore.

  7. LOL, should be interesting to see how that turns out.

    Lu
    http://www.web-anonymity.cz.tc

    1. Wow, dude! That’s really cool! Amazing!

      I guess we will just have to wait and see.

  8. Don’t sweat the details.

  9. Something needs to give about the way in which healthcare is provided in the Western world. Costs are rising in Europe and the States, with disastrous consequences for both the nation and the individual… government involvement is not the problem, cost is. Libertarians
    don’t seem to recognize this. Not that it’s surprising: a man with a hammer views every problem as a nail, right?

    1. “government involvement is not the problem, cost is”

      What you don’t seem to realize is that government involvement is what has created the cost problems to begin with.

    2. Libertarians don’t seem to recognize this.

      I don’t think we’re the one’s with the vision problem. Think harder. The correct answer might come to you.

    3. Read the above conversation between Ken Shultz and Groovius Maximus. A major part of the cost problem is Medicare and Medicaid shafting hospitals/physicians results in their cost burden being put on private insurers/payers. The gov’t programs increase demand for medical services via the freebie mindset, then refuse to pay their full portion.

      Think about what would happen to, say, restaurant food prices, if the gov’t agreed to pay for poor/elderly guests, but then only reimbursed the restaurant 50% of costs. The poor/elderly would now eat out at restaurants a lot more (hey, it’s free!), and the restaurant could only stay in business if it charged it’s paying customers exorbitant prices. Employers would offer “restaurant insurance” as compensation… do I even have to go any further?

      1. second sentence above, “results” should be “which results”.

    4. Not that it’s surprising: a man with a hammer views every problem as a nail, right?

      Government involvement is exactly that hammer!

  10. Under new Bill, Health insurance is a must, but now you can easily find health insurance for your family under $40 http://bit.ly/bYoNQH

  11. Under Health Care Reform, Health insurance is a must, but now you can easily find health insurance for $40 http://bit.ly/bYoNQH

  12. “government involvement is not the problem, cost is.”

    I’m not sure what to say to someone who would write that sentence, but I hope you stick around and talk to us a lot.

    …’cause we have a lot to learn from you, apparently, and you might pick up a thing or two from us.

  13. No reform will take place until we have a crisis, so we might as well resign ourselves to that. We have massive middle class entitlements while the truly needy suffer. We voted for the individuals who put us into this mess, so I guess we deserve what we’re getting. I just wish there would be a politician who would talk to the American people like they are adults, and be honest about the tough choices we face.

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