Fwd: qotd: Policy consequences of low growth in Medicare spending

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Subject: qotd: Policy consequences of low growth in Medicare spending
Date: Fri, 11 Jan 2013 11:18:13 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



U.S. Department of Health and Human Services
January 7, 2013
Growth In Medicare Spending Per Beneficiary Continues To Hit Historic Lows
By Richard Kronick and Rosa Po

Medicare spending per beneficiary grew just 0.4% per capita in fiscal
year 2012, continuing a pattern of very low growth in 2010 and 2011.
Together with historically low projections of per capita growth from
both the Congressional Budget Office and the Centers for Medicare and
Medicaid Services (CMS) Office of the Actuary, these statistics show
that the Affordable Care Act has helped to set Medicare on a more
sustainable path to keep its commitment to seniors and persons with
disabilities today and well into the future. The success in reducing the
rate of spending growth has been achieved without any reduction in
benefits for beneficiaries. To the contrary, Medicare beneficiaries have
gained access to additional benefits, such as increased coverage of
preventive services and lower cost-sharing for prescription drugs.

http://aspe.hhs.gov/health/reports/2013/medicarespendinggrowth/ib.cfm


Comment: At a time when politicians are ready to attack Medicare
spending, this report on the projected slow growth in Medicare spending
per beneficiary might seem to be useful in helping to keep the wolves
away. But there are some very serious concerns behind these projections.

There has been some debate about whether the slowing is due to the
recession and slow recovery, or if it is due to the implementation of
some of the features of the Affordable Care Act, or if it simply due to
changes in practice patterns related to evolving efforts of health care
professionals to improve the practice of medicine. It is likely that all
play some role.

Beyond dispute, however, is the fact that Medicare has been very
effective in slowing the growth in spending though various forms of
administered pricing, such as DRGs. The S&P Healthcare Economic Indices
have shown that Medicare has been far more effective than the private
commercial insurers in slowing the rate of growth in health care spending.

As this and other reports have shown, spending controls have not been at
the cost of a reduction in benefits to Medicare beneficiaries; in fact
benefits have expanded, though only modestly. Spending controls have
been limited to slower payment growth for health care professionals and
institutions. Although the Affordable Care Act has introduced measures
to allegedly improve quality while controlling spending, the current
efforts at implementation indicate that the emphasis is on spending
restraint, with only token attention to quality measures - measures
which are of dubious effectiveness anyway.

Thus there are two major fronts of attack over which we should be
acutely concerned:

1) The government, under the banner of the Affordable Care Act, will
continue to selectively ratchet down growth in Medicare spending while
largely leaving the private sector plans alone. The expanding
differential between lower public payment through the Medicare and
Medicaid programs and higher private payments through the private
insurance plans will cause more health care providers to abandon the
public programs, with a consequent threat of impaired access for the
beneficiaries of the public programs. As long as private insurers are
there to provide a relief valve, there is a very real risk that the
public programs will be underfunded. If private plans were eliminated,
as a single payer the government would be obligated to ensure the
solvency of the health care delivery system.

2) The current political push for austerity measures has made these
public programs vulnerable to the
"we-have-a-spending-problem-not-revenue-problem" cranks that populate
our nation's capitol. There is a genuine fear that some of the critical
thinkers negotiating with the cranks will plea pragmatism as they trade
away important features of our social programs.

We need the opposite approach. We need to reinforce Medicare and then
expand it to cover everyone. Complacency with the current
politically-expedient implementation of Affordable Care Act will lead us
further down the path of no return, that is unless we're ready for a
revolution.