It is an article of faith, at least among conservatives, that as long as Medicare remains a government program, outlays will rise relentlessly, year after year. Only “the market” could possibly tame Medicare inflation, they say. The fear-mongers argue that unless we either shift costs to seniors; raise the age when they become eligible for Medicare; or turn the whole program over to private sector insurers, Medicare expenditures will bankrupt the country.
Here is the truth: Both Standard & Poor’s (S&P) and the Congressional Budget Office (CBO) now have 18 months of hard data showing that Medicare spending has begun to slow dramatically. Health reform legislation has not yet begun to kick in to pare Medicare payments, but something is changing on the ground. As I pointed out in an earlier post, Medicare spending began to plunge in January of 2010. After levitating by an average of 9.7 percent a year from 2000 to 2009, CBO’s monthly budget reports show that Medicare pay-outs are now rising by less than 4 percent a year. (Over the year ending June 2011, Standard & Poor’s reckons that the cost of Medicare claims rose by just 2.5 percent. But S&P’s Medicare index does not include Medicare Advantage, the private sector option that costs the government significantly more than traditional Medicare.)
Senator Tom Coburn got into hot water with his odd town hall musings about President Obama’s intent “as an African-American male” “to create dependency because it worked so well for him.” In a delightful Freudian inversion, Coburn labeled President Obama’s political philosophy “goofy and wrong.”
Senator Coburn is a good man, but his narrow social vision is deeply misguided. If you want to see why, watch this two-year-old CNN clip, and then read below
For a while now, diabetes has been at epidemic proportions in this country, with nearly 24 million Americans currently suffering from the disease. The great majority have Type-2 diabetes, the kind that is linked to obesity and physical inactivity and is responsible for 90-95% of all cases in people over 40. The costs associated with this epidemic are also enormous: $218 billion each year in medical expenses and lost productivity. In fact, about 10 percent of all U.S. health care spending and a whopping one-third of Medicare dollars is spent on people with diabetes.
The epidemic shows no signs of abating. In the next 25 years, the number of cases is expected to double. According to a report on obesity released last month by the Trust for America’s Health, “Since 1995, diabetes rates have doubled in eight states. Then, only four states had diabetes rates above 6 percent. Now, 43 states have diabetes rates over 7 percent and 32 have rates above 8 percent.
Finally, according to the Robert Wood Johnson Foundation, as a result of the U.S. having the highest rate of obesity among all developed countries, we now have the highest rate in the world of hospitalization of diabetes patients.
(Cross-posted at the Reality Based Community)
From the Chicago Tribune and AP.
The decisions were announced to the hospitals Tuesday morning, Revenue Department officials told The Associated Press. They follow last year’s Illinois Supreme Court ruling that found a central Illinois hospital wasn’t doing enough free or discounted treatment of the poor to qualify for an exemption, costing it $1.2 million in local property tax payments per year.
In addition to Prentice Women’s Hospital [a Northwestern facility] in Chicago’s Gold Coast neighborhood, the revenue department now has decided that Edward Hospital in Naperville and Decatur Memorial Hospital in Decatur don’t quality for property tax exemptions. The hospitals have 60 days to ask an administrative law judge to review the decisions. In Illinois, property taxes are collected by county governments, and the Department of Revenue decides which institutions are eligible for tax exemptions.
In a written statement, Illinois Hospital Association President Maryjane A. Wurth said she was disappointed and “deeply concerned” by the Revenue Department’s preliminary rulings, and worries that the hospitals will be forced to reduce services and increase costs for patients and employers.
While our elected representatives wrangle over slicing entitlements, virtually no one seems to be paying attention to an eye-popping fact: Medicare reimbursements are no longer accelerating at a break neck-pace. The new numbers should be factored into any discussion about healthcare spending: From 2000 through 2009, Medicare’s outlays climbed by an average of 9.7 percent a year. By contrast, since the beginning of 2010, Medicare spending has been rising by less than 4 percent a year. On this, both Standard Poor’s Index Committee and the Congressional Budget Office (CBO) agree. (S&P tracks healthcare spending with the help of Milliman Inc., an independent actuarial and consulting firm.)
What explains the 18-month slow-down? No one is entirely certain. But at the end of July David Blitzer, the chairman of Standard &Poor’s Index Committee, told me: “I’m hesitant to say that this is a clear long-term trend. But it’s more than a blip on the screen."
Since then, I have talked to an analyst at the Congressional Budget Office who is involved in putting together numbers on Medicare payments for CBO’s Monthly Budget Review. He confirmed that they, too, have seen a dramatic slow-down in Medicare spending.
When I asked, “Why?, he replied: “We have some theories.”
Would he share those theories?
“No,” he responded. “You would quote me.”
This is true.
In Washington, Medicare cuts are back on the table. Sunday afternoon, the Senate failed to find the 60 votes needed to pass Senate Majority Leader Harry Reid’s debt-cutting proposal, a bill which would have left Medicare and Medicaid untouched. The vote was 50 to 49. That it was so close illustrates just how divided this country is.
Now the president and Congressional leaders have signed off on a “compromise” that might best be described as “Conservatives 10; Liberals 0.
What is mind-boggling is that none of this had to happen. We were not facing a debt crisis. Conservatives manufactured a crisis, and then demanded Draconian spending cuts. For decades, the U.S., like other developed countries, has been lifting its debt ceiling on a regular basis. Normally, raising the deficit ceiling does not lead to a pitched partisan battle.
Apparently the Gang of Six proposes to eliminate CLASS.
Howard Gleckman notes that this is a sadly missed opportunity. In my interview with Gleckman here, we discuss some of CLASS's programmatic challenges, as well as some really important reasons for the program. CLASS requires pretty high premiums given—wait for it—lack of an individual mandate. Other aspects of CLASS raise possibilities for adverse selection. Lengthening the vesting period and other approaches would have addressed these issues.
Given Kent Conrad and Max Baucus's dislike of CLASS, I'm not all that surprised by this outcome. The depth of opposition among fiscal conservatives is exemplified by Senator Conrad’s description of the CLASS Act as "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of." Conrad’s comment rightly infuriated CLASS supporters, but there it is.
I've written a lot about CLASS. Compared with (say) Medicaid expansion or the new health insurance exchanges, CLASS raises inherent uncertainties that hinder long-term budgetary forecasts. I wish that during the health reform debate I had covered the technical matters more extensively, and that I had access to some of the economic analyses that appeared within the past several months.
In a different political moment, CLASS would have greater chance of survival. Our current polarized environment prevents us from performing reasonable technical fixes when a challenges to complicated proposed programs become known.
This legislation deserved the chance at repair. CLASS seeks to address a huge need—helping disabled men and women live with dignity in their own homes. The hole in disability policy and long-term care just got bigger. This problem won't go away.
As Don Taylor tweets, it's too bad we can't repeal disability.
Lots of attention has been focused on how over-testing, especially of the “worried well” contributes to high health care costs. To date, much of the focus has been on Medicare which spends a fortune each year on unneeded tests with no proven benefit.
Doctors, hospitals, demanding patients and defensive medicine have all been implicated in contributing to this glut of over-testing and treatment. But there’s another culprit that so far has avoided the scrutiny of government regulators. These are the stand-alone cardiac and similar health-related screening centers that employ heavy-handed consumer marketing techniques on the internet and through telemarketers; in some cases sending mobile screening units to church-sponsored and community events to help drum up business.
Cardiac screening tests—including a CT scan for detecting the location and extent of calcified plaque in the coronary arteries—are meant to alert seemingly healthy people to the fact that they either have heart disease or are likely to develop it in the next few years. Patients don’t need a referral from a doctor to undergo cardiac testing at these centers and tests are not covered by insurance. The centers, which use direct-to-consumer (DTC) marketing, are not regulated by the Food and Drug Administration and have no mandate to refer patients with positive findings to a physician for follow-up care.
But with so many false positives and inconclusive results, many patients who do elect to have these tests end up undergoing a “cascade” of further interventions that are expensive (and are often covered by Medicare or private insurance). For example, a buildup of calcium in an asymptomatic patient’s artery might be detected yet would never have led to heart disease. Still, that patient may end up having such invasive treatments as cardiac catheterization or balloon angioplasty or be put on a statin or other medication for the rest of his life.
I published a column this morning in Kaiser Health News about the challenge of cost control in cancer care. KHN needed to cut one section for space, which notes that oncology has become an ecosystem of multi-billion-dollar public, private, and nonprofit ventures in pharmaceutical development, imaging, acute care, and more. This ecosystem draws upon and then reinforces broader cultural biases that promote overly aggressive approaches to diagnosis and care. I wanted to add some more discussion, and one revealing advertising table....
Consider the issue of routine mammography for younger women. In questioning the benefits of such screening, the United States Preventive Services Task Force ran afoul of Americans' powerful draw to the notion of early detection in confronting an especially frightening disease. The USPSTF committed some political blunders in its approach to this freighted and genuinely complicated issue. It should have anticipated the powerful political, cultural, and commercial resistance it was likely to encounter.
In American popular culture--though not in the epidemiological data--breast cancer is often depicted as a young woman's disease. A terrific 1998 paper by Paula Lantz and Karen Booth examined magazine depictions of breast cancer. Lantz and Booth concluded that "the increase in incidence is commonly portrayed as a mysterious, unexplained epidemic occurring primarily among young, professional women in their prime years." Public service announcements concerning mammography and breast cancer show similar patterns. These announcements, with their myriad images of beautiful young swimmers, emphasize that one in nine women will be diagnosed with breast cancer. The PSAs do not emphasize that only about 12 percent of breast cancer patients are diagnosed before age 45.