March 5, 2014
Late in 2012, Louise Sheiner from the Federal Reserve Board conducted a series of analyses that raised major questions about this whole line of research. Consider the following table, which shows how much of the difference in spending across states in the US “go away” once we adjust for not only the age and wealth of the population, but also the obesity rate, the likelihood that people lack health insurance, and the percent of the population that is African-American:
According to this analysis, a huge portion of spending differences is not captured by many of the Dartmouth analyses, because they fail to account for all of these population differences. What looks like a $2000 difference in spending is closer to 300 bucks.
via Do Docs Spend More in McAllen, Texas Because People Who Live There Are Obese?.
February 2, 2014
Recent regulations from the Centers for Medicare and Medicaid Services (CMS) threaten to undermine the highly successful Medicare Part D prescription drug program for seniors. The regulations replace market-based competition with government interventions that will drive up costs, erode incentives for innovation among Part D plan providers, and possibly result in worse health for seniors.
Rather than using heavy-handed regulations to address speculative monopolies, theoretical over-use of drugs, and generate pennies-on-the-dollar savings, CMS should focus on building on the success of Part D and tackling Medicare fraud, estimated to account for nearly 10 percent of annual Medicare spending.
via New Part D Regulations: A Lesson In Hamstringing Competition And Choice – Forbes.
January 26, 2014
S. 1871 would replace the Sustainable Growth Rate (SGR) formula, which determines the annual updates to Medicare’s payment rates for physician services, with new systems for establishing those payment rates; extend a number of health care and human services programs and provisions that would otherwise expire; and make other modifications to Medicare, Medicaid, the Children’s Health Insurance Program, and several human services programs.
CBO estimates that enacting S. 1871 would increase direct spending by $150.4 billion over the 2014-2023 period. (The legislation would not affect federal revenues). Pay-as-you-go procedures apply to this legislation because it would affect direct spending.
via CBO | S. 1871, SGR Repeal and Medicare Beneficiary Improvement Act of 2013.
January 7, 2014
Significant long-term care benefits flow to individuals in the top 20% of retirement earnings, enabled by Medicaid\’s generous asset-exclusion limits.
In many states, an elderly person may own a home valued at $802,000, plus home furnishings, jewelry and an automobile of uncapped value while receiving long-term Medicaid support. In addition, they are allowed to have various life-insurance policies, retirement accounts with unlimited assets, $115,920 in assets for a spouse, income from Social Security, and a defined-benefit pension plan. By most standards, such a household would be considered wealthy.
via Millionaires on Medicaid – Health – AEI.
January 2, 2014
Peter Orszag, the former OMB Director for President Obama, and Loren Adler, the Research Director at the Center for a Responsible Federal Budget (CRFB), just had a fascinating conversation on twitter about the future cost of Medicare spending. Given the importance of Medicare spending on the budget, the spending trajectory is of utmost importance to the US\’s fiscal future.
via Medicare Cost Growth – Business Insider.
January 2, 2014
A reform of today\’s disability-benefit system is also essential. The share of working-age adults receiving Social Security Disability Insurance benefits doubled from 2.3% in 1989 to 4.6% in 2009. Program expenditures have increased dramatically as well. SSDI applications track movements in the unemployment rate across time, providing strong support to the hypothesis that many people who would like to work but can\’t find a job end up on disability. The United States must ensure a basic standard of living for the truly disabled, but no one seriously disputes the argument that SSDI needs to be reformed so that it ceases to offer a permanent alternative to working for people would could be in the labor force. Conservatives should champion this cause unabashedly.
via A Jobs Agenda for the Right > Publications > National Affairs.
December 12, 2013
The Senate Finance Committee is set to vote on permanent “doc-fix” legislation Thursday that grants the federal government broad new authority to determine “applicable appropriate use criteria” for the full range of outpatient medical services delivered to seniors. Similar legislative language is included in bipartisan draft legislation that is being marked up Thursday in the HouseWays and Means Committee.
The bill is part of a larger effort to change the way Medicare pays doctors. Each year since 2002, Congress has passed temporary \”doc-fix\” legislation to cover billions of dollars of shortfalls in Medicare payments. The provisions in the bill apply to advanced radiology imaging tools like CT scans and MRIs. But language tucked into the legislation enables “the Secretary” of HHS to exert the same controls over the vast array of outpatient medical care for seniors.
via Scott Gottlieb: This ‘Doc Fix’ Would Be Bad for Your Health – WSJ.com.
December 10, 2013
One of the most prominent proponents of the negative income tax, which guarantees a basic income, was Milton Friedman, the nobel-prize winning economist and free-market advocate. Austrian economist Friedrich Hayek express support for a “minimum income for everyone” in the third volume of Law, Legislation, and Liberty. The American radical Thomas Paine proposed a national income in this pamphlet Agrarian Justice, and libertarian author Charles Murray has also argued in favor of a guaranteed income.
Of course libertarians, who are in favor of less government spending, may be concerned that were a basic income to be implemented that it would cost more than the current welfare system. However, it is worth considering that, as Peter Ferrara pointed out in Forbes, the Census Bureau estimates that our total welfare spending is four times the amount that would be needed to lift all Americans currently living in poverty above the poverty line by giving them cash.
In 2008, Charles Murray wrote that a guaranteed income for all American adults over the age of 21 who are not in prison of $10,000 a year that would replace all current welfare programs as well as agricultural subsidies and corporate welfare would be cheaper than maintaining the current welfare system in the coming decades.
via Scrap the Welfare State and Give People Free Money – Reason.com.
December 10, 2013
Perhaps most importantly for hospitals, though, the Affordable Care Act required Medicare to start penalizing hospitals that frequently readmit the same patients, and in 2012 some 70 percent of hospitals took a financial hit for their high readmission rates. Observation status doesn\’t count as admission, so using it helps hospitals avoid the penalty.
Here’s the problem for the patients: Medicare beneficiaries seen as inpatients are only charged their inpatient deductible, which was $1,184 in 2013, for hospital stays, but those under observation status can be on the hook for thousands of dollars more because they’re billed separately for every procedure and drug.
What’s more, a patient’s follow-up treatment in a nursing home, which doctors frequently recommend after an ER visit, isn’t covered by Medicare unless the person has first been a hospital inpatient for three days, and observation status doesn’t count.
via How Hospitals Pass Their Obamacare Penalties on to Patients – Olga Khazan – The Atlantic.
December 9, 2013
If we want to provide more cost-effective care to poor people, we should proceed in the same way that we should proceed in other parts of the medical economy. We must do the hard work of improving the quality and economy of care provided to the concentrated group of extremely costly patients. There is no short cut. Under any financing system, this requires the hard work of clinical-care coordination, quality improvement and social services to address life circumstances that undermine health.
via Republicans have Medicaid’s cost problem completely wrong.