The Vagaries of Medicare Reform

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Elias Isquith

Elias Isquith is a freelance journalist and blogger. He considers Bob Dylan and Walter Sobchak to be the two great Jewish thinkers of our time; he thinks Kafka was half-right when he said there was hope, "but not for us"; and he can be reached through the twitter via @eliasisquith or via email. The opinions he expresses on the blog and throughout the interwebs are exclusively his own.

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32 Responses

  1. You have to know how to read the NYT.  This is a Dem trial balloon to see how much fire it draws.  No Dem pol wants their name mentioned [yet], but the “reporter” has likely spoken with a few.

    The mention of National Coalition on Health Care giving anything less than a veto is revealing, as it’s an open secret

    http://abcnews.go.com/blogs/politics/2009/09/liberals-blast-baucus-plan/

    it’s a Dem-lib organ.

    As we see, the “reporter” didn’t actually interview any Republicans: he just grabbed what’s already in the public record.  In fact, to print a persuasive argument from a Republican would probably hurt the chances of what the “reporter” seems to think might be a reasonable plan. If he hated it, the story would read much more ominously:

    GOP Plan to Kill Old People

    Inexplicably Gains Traction

    Among Conservative DemocratsReport

  2. Avatar James K says:

    If nothing else, the article serves as a reminder of how important the Occupy Movement has been, and how necessary it was to shift the public conversation away from the deficit and toward jobs and inequality. The ideological and political apparatus to cut Medicare is well-established and will likely never have a more propitious political climate.

    I don’t get your point here.  Medicare isn’t targeted at the poor, it’s targeted at the old, and old people are on average wealthier than young people.  Indeed one could argue that one of the reasons why the US spends comparatively little on helping the poor is that it spends so much on helping the old.

    Now if they were going after Medicaid, that would be a different story.Report

    • Avatar ktward in reply to James K says:

      Indeed one could argue that one of the reasons why the US spends comparatively little on helping the poor is that it spends so much on helping the old

      That seems an oddly unproductive argument to want to make. Wouldn’t it simply devolve into a contrast against every other gov’t-funded program? “We don’t help the poor enough because we spend so much on funding [insert gov’t program here].

      Why is it that addressing the needs of one should come at the expense of addressing the needs of the other?

      To my mind, a more useful argument to make is that many of our seniors would be living in poverty and suffering from untreated afflictions if it were not for Medicare. This is precisely why it exists- why would we want to screw around with a program that has proven so successful? If we need to invest more money in helping the poor–and I’m on board with that–let’s find an unsuccessful program to raid. Or let’s raise taxes on those whose lifestyles won’t remotely change with a small hike to their taxes.

      old people are on average wealthier than young people

      Old people are also much sicker than young people. Which is why seniors are both difficult and expensive to insure in a privatized industry. Many would indeed be thrown into poverty if they saw their health insurance premiums (they do pay premiums that come straight off the top of their SS checks) increase exponentially, which you can bet would happen since many of our seniors are already dealing with illness–diabetes, cancer, Alzheimers and other mental afflictions, etc.

      Unlike yourself, I do get Elias’s point: OWS has shifted the focus to the society-crippling effects of economic inequality, which is an altogether different and more critical conversation than the burn-and-slash talk that dominates our deficit conversations. Dismantling Medicare as we know it is part and parcel of the burn-and-slash talk.Report

      • Avatar ktward in reply to ktward says:

        Ruh-roh, looks like my tags didn’t work.Report

      • Avatar Murali in reply to ktward says:

        Why is it that addressing the needs of one should come at the expense of addressing the needs of the other?

        For two reasons.

        1. There is a budget. While the american system does not have (I think) an explicit budgetary limitation, there is a political cost to tax and spend policies (i.e. the tax part of it. People love the spending) Of course spending without taxing leads you into other kinds of problems…

        2. Every dollar taxed primafacie has a negative impact on the poor (even if you are taxing thhe rich so to speak). Of course social outlays can compensate.Report

        • Avatar ktward in reply to Murali says:

          Muchas gracias for the fix. Old habits die hard- next time I’ll use the handy little function button.

          1. Of course there’s a budget. By implication I recognize that, in that I suggest that if we identify a need to invest more money in services that benefit the poor, rather than raze a successful program like Medicare which would only swell the ranks of the poor, we should instead take funds from unsuccessful or otherwise arguably over-funded gov’t programs. In the event that every other gov’t program is successful and properly funded, then by all means let’s levy a small tax on those who won’t otherwise, unlike Medicare recipients, be reduced to poverty themselves.

          2. I confess, I’m not clear on what your greater contextual point is w/r/t an obscure 8yo EWC report. I mean, I’m fairly certain you’re not suggesting that if we eliminate taxes altogether primafacie poverty would be magically eradicated. Perhaps those compensating social outlays represent the meat of your point.Report

          • Avatar Murali in reply to ktward says:

            My second point was that any government spending which did not go to the poor essentially hurt the poor. So, we go for means tested programmes rather than universal ones. We gut funding to the military, to farmers, to the arts, the space program, to the old (especially the middle and upper class old people) etc i.e. lets gun for a lean mean welfare machine state.Report

            • Avatar ktward in reply to Murali says:

              My second point was that any government spending which did not go to the poor essentially hurt the poor.

              And your support of your position is, again, an obscure 8yo EWC report? Really?

              Medicaid is already means-tested. Imo, Medicare should be as well, but today’s GOP, for whatever reasons, would rather just slash and burn indiscriminately.

              We gut funding to the military, to farmers, to the arts, the space program, to the old (especially the middle and upper class old people) etc i.e. lets gun for a lean mean welfare machinestate.

              When you say, “we gut”, you mean that “we should gut”, right? (I’m pretty sure the US military budget has not yet been remotely gutted by any reasonable definition of the term “gut”.)

              Your comment speaks to the slash and burn mentality that I personally find less than useful.

              – Farm subsidies should be gutted because they’re not actually benefiting farmers, they’re benefiting Big Ag. How about we gut corporate welfare before we start taking food out of poor children’s mouths.

              – Decreased funding to the arts breaks my everluvin heart. I’ll simply channel what is at least agreed to be the spirit of Churchill, if not a strictly verifiable quote: During the Second World War, Winston Churchill’s finance minister said Britain should cut arts funding to support the war effort. Churchill’s response: “Then what are we fighting for?”

              – Space program: I’ve no opinion. I defer to those with one.

              – Back to our seniors … SS and Medicare have achieved precisely what they were designed to. I’m pretty sure that most of us are open to discussion of reforms that make these programs measurably more cost efficient and sustainable. Like means-testing. But why on earth would we gut them or dismantle them in any way? Because what our country really really needs to recover from our current dire straights is more destitute people?Report

              • Avatar James K in reply to ktward says:

                Any effect farm subsidies would have on lowering food prices (and I expect the effect would be minimal to none) is more than outweighed by the effects of tariffs.  If poor people can’t afford food, give them money.  The “ppor people can’t afford food” line is a thin excuse to drop money into farmers’ pockets (NB I’m not saying you’re using it as a thin excuse, I’m saying that for the government it’s a thin excuse).

                On seniors, my point is that given old people are on average richer than young people Medicare probably isn’t all that progressive as a government intervention.  And if I understand it correctly, voucherising it will just restrict the annual amount of Medicare spending a person can receive.  That’s probably not the ideal way of reducing spending from a distribution standpoint, but given the Budget-crushing cost of Medicare, something like that was going to have to happen at some point anyway.  Better to head things off at the pass now than have the entire system fall apart when the money runs out.Report

              • Avatar b-psycho in reply to ktward says:

                Decreased funding to the arts breaks my everluvin heart.

                Politicians griping about content of tax-funded art and regularly threatening censorship is much worse.Report

    • Avatar Michael Cain in reply to James K says:

      “Now if they were going after Medicaid, that would be a different story.”

      On one level, the distinction is shrinking.  Almost half of all Medicaid spending now goes to “dual eligibles”, that is, the elderly poor.  Not particularly surprising: government provision of long-term care really needed some sort of means testing, which pushed it into Medicaid, and such care is a service used primarily by the elderly.

      At least for me, the question for years has been “Why aren’t conservatives going after Medicaid?”  Seriously, it’s the obvious target.  It’s clearly “welfare.”  It doesn’t have a dedicated revenue stream.  Since the 1990s, it’s been clear that it’s a long-term slow-motion train wreck for state government budgets.  Converted to a block grant, and with restrictions on how states must spend it removed, it’s a field that is ripe for states to experiment with more efficient methods of delivering health care to the poor.Report

      • “Converted to a block grant, and with restrictions on how states must spend it removed, it’s a field that is ripe for states to experiment with more efficient methods of delivering health care to the poor.”

        The challenge, of course, is that “experimenting” with health care result in a lot of bad outcomes while you figure out what does work. By definition, experimentation isn’t simply a series of improvements culminating in happy ponies. As we saw during the ObamaCare debate, even small-government conservatives are happy to pull out the long knives and attack Democrats who try to increase the efficiency of government programs when there’s hay to be made. Death Panels and euthanasia come to mind; a relatively straightforward program to ensure that seniors do end of life planning while they’re able to (thus saving costs) was framed as a malevolent attempt to destroy lives.Report

        • Instead we get “experiments” like California’s: reducing payments for office visits to as low as $12 in some cases, to see if <i>any</i> doctors will continue to accept Medicaid patients.  Or Wisconsin’s impending request that they be allowed to drop 65,000 people from the rolls.  During this past recession, several states commissioned studies to look at how they would cope if they dropped out of Medicaid; if there are large drops in state revenues next year — a distinct possibility, IMO — I expect that at least one state will pull the trigger and withdraw.Report

        • The challenge, of course, is that “experimenting” with health care result in a lot of bad outcomes while you figure out what does work.

          Jeff, that is a challenge.  But it’s the same critique that was used against welfare reform, and what we saw in that case was that we were simply sticking to a policy that had a known bad outcome because we were afraid of experiencing unknown bad outcomes.  In the end, giving states flexibility within limits worked much better than the original program.  I can’t say that Medicare would work out the same–providing medical care isn’t exactly the same as providing welfare benefits–but sticking to a system that is seriously problematic with 100% certainty out of fear of something that could be seriously problematic with something less than <100% certainty is a questionable strategy.  (Of course we also have to plug some utility values into that equation, so it’s not quite as simple as I made it seem there.)Report

          • James, I agree. I don’t think that it’s a challenge that we can afford to shy away from, but the challenges of actually experimenting should be recognized, as well as the common practice of presenting sweetheart deals for private companies as “experiments” rather than corporate/government mini-monopolies.

            That was the main point I was trying to get at, and I agree that “stick with a sub-optimal system because the alternative might be worse” isn’t a reason to avoid coming up with alternatives. The challenge is doing it without screwing over those who have to live with the discovery process.Report

      • At least for me, the question for years has been “Why aren’t conservatives going after Medicaid?”

        And the poor are a much weaker political target than the rich, so they would get less resistance.  Maybe the answer lies in your point that the distinction between Medicare and Medicaid is shrinking–if lots of seniors are getting Medicaid, it’s a more dangerous target than it would appear from its status as an anti-poverty program.Report

        • “…if lots of seniors are getting Medicaid, it’s a more dangerous target than it would appear from its status as an anti-poverty program.”

          Yes.  And in particular, it’s how the federal government chose to fund long-term care.  In the state study documents that I read, the political hot potato appeared to be “kicking grandma out of the nursing home.”  Given a block grant and relatively little constraint on how it gets spent, it seems almost a certainty that some states would choose to preserve the long-term care benefit, but do something entirely different for other types of medical care for the poor.Report

  3. Avatar E.C. Gach says:

    I’m kinda in the same boat Elias.  I’ve been reading more of the times lately and have been taken aback by shallow the reporting has been.  It’s been nearing the level of some Washington Post FP reportage.  Lots of unnamed sources, or lots of repeating what the same source says, and never clearly explicating the caveats.

    Maybe this is partly the influence of blogs, and the NYTimes feeling the need to keep reporting on stories to the point of manufacturing them rather than waiting for them to fully ripen.Report

  4. Avatar Liberty60 says:

    This sort of reporting reinforces my opinion as well, to the importance of Occupy. That is, the importance of pointing out that both parties and the journalists who report on them, are very insular and comprosed of the same class. If not the 1%, then at least the 1.5%.

    Robert Pear ( the NYT reporter for this story), his editor, publisher, the Senators and Congressmen and staffers and pundits all graduated from the same colleges, send their kids to the same schools, shop at the same stores and circulate in the same social circles.

    When these same people discuss Medicaid versus capital gains taxes, the two issues are strikingly different- one has an immediate and deeply personal impact on them, the other is an abstract, something faraway thet they read about once in a think tank piece.

    This is one of the points I keep hearing when I talk to people in my Occupy group- that government reacts with amazing swiftness and urgency to issues that affect the 1%, but is deaf and blind with regard to anything that affects people like us.

     Report

    • Avatar MFarmer in reply to Liberty60 says:

      “This is one of the points I keep hearing when I talk to people in my Occupy group- that government reacts with amazing swiftness and urgency to issues that affect the 1%, but is deaf and blind with regard to anything that affects people like us.”

      Are they ready to take an anti-statist position and fight for limited government and a free market? How do they propose to address the problem that the State protects it’s strongest most connected supporters?Report

      • Avatar Liberty60 in reply to MFarmer says:

        Without the state, the free market can’t exist.

        As to your second coment, the price of liberty is a vigilant citizenry. In practical terms, the citizens have to demand that we fund Medicaid and not bailouts for the well-connected.

        Which is kind of what we are doing.Report

        • Avatar MFarmer in reply to Liberty60 says:

          Anti-statism is not the same as promoting no government or state at all. Statism has a particular meaning, and it’s antithetical to a free market, therefore, it’s strange to respond to what I wrote as free-market-killing.

          What happens when the demands fall on deaf ears because the State has become so powerful it doesn’t have to listen ot respond to your demands? Wouldn’t it be better to fight to limit the power of government, therefore ensuring a powerful State can’t emerge to favor the few?Report

          • Avatar Kimsie in reply to MFarmer says:

            the few will amass favors anyhow. it’s what you get, when you breed ambition out of everyone else. thing is? a government can ensure that the few don’t take “all”, and don’t reduce other people to slavery as a means to get “more”Report

  5. Avatar Liberty60 says:

    OK so lets not engage the false dilemma of No State versus Total State.

    Lets agree that there needs to be a state, that it needs to protect the liberty of the individual.

    But reducing the power of government can sometimes mean reducing its power to defend liberty.

    As an example- doesn’t the state have the duty to break up monopolies so as to defend the liberty of all who wish to enter the marketplace? Or ensure that the marketplace is operating under some basic rules of fairness to prevent fraud?

    And doesn’t the state need a certain degree of power to carry out this function?

    If you want to argue that some functions of the current state are overpowerful, fine lets have that argument. I can see where some small businesses could mount an argument of being oppressed by government regulations.

    And if you want to promote the idea that the marketplace is an efficient way of allocating rescources, sure I can buy that.

    But isn’t is also true that the market forces themselves can become overpowerful, to the point of bending the state to their will, and suppressing liberty? I can’t imagine anyone trying to mount an argument that Goldman Sachs is being oppressed by the overmighty state.Report

  6. Avatar MFarmer says:

    “OK so lets not engage the false dilemma of No State versus Total State.”

    I didn’t — you did.

    First, you need to understand the meaning of statism, and, thus, anti-statism and limited government, then we can have a discussion. Obviously you are not familiar with the libertarian arguments that governments create monopolies. I can’t have these arguments from scratch — it’s just too tiring. Without government backing, Goldman Sachs can have no coercive power in a country that protects individual rights.Report

  7. Avatar Steve S. says:

    It really is sad that the notion of cutting Medicare can even be breathed by supposedly serious people in our society.  Medicare is just the insurance that most old farts happen to be on.  Now, American GPs make more than any other country’s GPs, and specialists are not far behind.  Seems like if you need to save a buck or two you’d start there rather than taking it out of the backfat of old farts.  As in, instead of making $160,000/ year GPs maybe would only be making $140,000, for the sake of Boeing and General Dynamics continuing to get their usual revenue stream, you understand (or, perish the thought, Boeing and GD might have to take a slight haircut too).

    That is, if we had a political discussion in this country that was remotely related to human decency.Report

  8. Good catch Elias – When I read that this morning all I could do was sigh and wonder where does Robert Pear get this crap.  I like the suggestion that perhaps Dems are just using him to launch a trial balloon, but given the pernicious history of the Times in health reform (sabotaging the inclusion of the advance care planning benefit in the annual wellness visit, for example) I think someone at the Times just has something against Medicare.

    There are Democrats who have advocated “voucherizing” Medicare – the most important being John Breaux who was appointed to National Bipartisan Commission on the Future of Medicare under Clinton.  Fortunately that committee wound up deadlocked and the recommendation was never formally presented.

    Clearly one of the inspirations for this approach is the  Federal Employees Health Benefits (FEHB) Program, which essentially gives a voucher to employees and retirees with which to buy from an approved list of plans with clearly defined and compared benefits structures.  On the surface it looks good – rates of increase that are not too bad, the appearance of a private market, and relatively happy beneficiaries.  Unfortunately, the facts do not support the analogy.

    I recall a hearing on the issue I watched on the KFF website in which the program administrator observed that since the average Medicare beneficiary was older and sicker than the (relatively) young federal employee and (even) retiree population, the premium cost would have to be much higher than for the FEHB participants.  Moreover, the benefits and coverage of Medicare are so antiquated that Medicare itself (co-pays, deductibles, no stop loss – and at the time, no drug benefit) would not be an acceptable plan in the set of approved choices.

    So, I don’t know why this idea comes up from the left.  Under Bush 43 there were so-called private fee-for-service Medicare plans which did not have the insurance mandates or quality reporting requirements of Medicare Advantage plans.  They were a gigantic drain on the treasury and a license to steal on the part of the plans which were effectively guaranteed a profit for no risk (socialize risk, privatize profit?).  With the payment rates being ratcheted down to average Medicare spending, the rats will be leaving this sinking ship.

    There is no way that atomizing the Medicare population into lots of little plans (still buying care from the same providers and hospitals) would help drive delivery system reform as well as current efforts.  The only advantage is a cynical opportunity to offload costs of care onto beneficiaries themselves, as if they were by choice the drivers of cost increases more than advancing technology and a feckless and self-interested delivery system.  Every time a doc tells you that a patient “made” him/her do some expensive test (or that fear of malpractice “made” something happen) do a forensic accounting biopsy to check qui bono?  Afterall,  longer office visits and more time to talk are also things that patients want and reduce malpractice risk, yet accomodations to those demands don’t seem to happen.

     Report

  9. Avatar Mike says:

    Other parts of the Ryan Joke notwithstanding, its main assertion – the requirement that for it to work, unemployment not just drop to levels lower than the best of the 1990s (hell, best of the entire 1900-2010 run!) and STAY there for over a decade, is completely insane to start with.

    Within that, the “switch medicare to vouchers” bit is the R’s actually DOING what they accused Democrats/Obamacare of doing: putting seniors in the line to have their care denied by “death panels.” The only difference is, the R’s were accusing Democrats of wanting government appointed death panels (which was completely untrue), while what R’s want to do is have the insurance industry themselves hire private death panels to deny care.Report

  10. Avatar Carly EngageAmerica says:

    When Medicare was enacted in 1965, it was, like most major new programs, a political compromise. Its design features represented the requirements of that compromise. As the decades have gone past, the design weaknesses and internal contradictions of the program have become more evident. Patching the framework, or tweaking it at the edges, is not going to address the long-term weaknesses of the program or the enormous financial load it adds to the country’s structural financial problems. Basic reforms are needed, and these reforms can and should reflect the principal goals of the program as well as the principal goals of fiscal prudence (http://eng.am/stUknA).Report