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March 24, 2005

Social Security vs. Medicaid/care

As social security reform began to emerge as an important issue, and one which Prez Bush was going to make a priority, the main theme countering the idea that SS was worth focusing on was "it's not that big a deal, all it needs is tweaks, it'll be solvent for many years to come." To some extent, that seems to have faded away, as long as you don't have the temerity to describe the situation as a crisis, instead of as a problem. Rhetoric police, knockin' on your door.


What's now arisen as a peculiar[to me] anti-SS reform theme is the idea that we should focus instead upon medicaid [update: Medicare, dummy, not medicaid] and healthcare reform, because this represents a much bigger and more urgent problem. I'm wondering what others think about that...


Medicaid[update: Medicare]/rising healthcare costs might well be even more threatening to our common future than SS funding deficits. I just don't know that this is a good enough reason to set SS reform aside. My take is that reforming SS is worth doing because it IS crucial to do, and because it's less complicated than reforming medicaidv/healthcare.


I feel that reforming SS is something that could be done via bipartisan effort within the time frame of the next several years. We have decent projections, and a handle on the nature of the gap(size-wise) between what Uncle Sam has been promised and what he'll have the dough to deliver. It will be hard, and fractious, but it could be done by a 2nd-term President if he reaches out, and is willing to make some compromises here and there to get a program that, regardless of its exact nature, makes promises in line with the ability to deliver. YMMV, of course. I'm only speaking comparatively.


Medicaid[update: Medicare]/healthcare reform seems to be an issue with no consensus beyond the acknowledgement of an impending train wreck. It appears that the different ways we can on this may well affect the future basic nature of our country. It's such a complex and contentious issue that I really can't see it getting solved in any sort of short time frame. I'd guess that the best we could do now is try to start some sort of bipartisan commission to try and forge an understanding of this much more complex multi-faceted problem, in the hopes of establishing some consensus upon which to base reform. I think this is going to need to be an issue that will not get center stage until 2008. Reform will probably need to be comprehensive, no?

Posted by Brian Keegan at March 24, 2005 01:11 PM
Comments

Brian;
You mean Medicare, right? Medicaid (healthcare for the poor; a state/fed collaborative program)is threatened by cuts but its a differently financed program than Medicare and won't technically run out of money. As I posted before its too big problems are long-term care costs (i.e. old folks in nursing homes) and increasing costs of meds (which is affecting all pyers).

Assuming you mean Medicare, yes this one would qualify as a crisis. Unfortunately if we use the Social Security fix model, there are no benefits to be cut, at least not easily. In fact and ironically, we just increased benefits by including a drug benefit. That move will accelerate the crisis. My worry politically is that Democrats have suggested focusing on Medicare instead of Social Security as a political countermove. The Democrats were overwhelming in favor of a Medicare drug benefit. Their complaint about the Republican program was that it was too skimpy (ie it didn't spend enough money). I would believe the Democrats earnestly want to fix Medicare if they proposed a specific solution. Frankly, it will take a tax increase since its politically unpalatable to cut benefits to the elderly. As part of a fix (and every recent change in the program) you'll likely also see new and significant cuts in reimbursement to providers (doctors and hospitals). That will become a bigger problem especially for doctors. More and more doctors are refusing to see Medicare patients. But I know the feds can came up with some pretty tough legislation to "force" docs to see them.

In summary fixing Medicare will be VERY hard and any fix will be VERY hard to sell to the unlucky "victim".

Posted by: c3 at March 24, 2005 01:36 PM

Right. Medicare. It's reall well past time I got that straight, maybe this gaffe'll finalkly do it.

I have the same worry, that the "fix medicare first" theme is moreso political jockeying than a genuine initiative drive. But be careful about saying the democrats should come up with ideas and proposals, because the democratic partisans will be quick to point out that this is the responsibility of the President and the majority. [As we all know, the minority has no responsibilities beyond taking free pot shots :-) ]

Since you brought up solutions, I have a few unformed thoughts. Seems like price control mechanisms and slowing the rate of development of expensive new treatments might need to find their way onto the table. Then we can look at how much of the high cost of healthcare goes for very high marketing and lobbying costs. Let's poke those with a stick. While we're poking, how about calulating the percent of total pharma R & D that goes towards the 5th generation headache cure and the 4th generation tummyache cure.

I also heard somewhere that it merits looking at the very high costs of certain procedures that specialty docs do.

Oh, and how about a luxury tax on cosmetic surgery?

And how about forming a non-profit organization that specializes in the manufacturing of generic drugs once the patent expires?

I heard somewhere a few

Posted by: bk at March 24, 2005 02:43 PM

Prilosec rules, don't sneer at it too much! What's 50 cnets a day compared to ulcers and pain?

Posted by: Tully at March 24, 2005 03:01 PM

I've been saying for awhile now that the big domestic issue in 2008 will be the Medicare/Medicaid/Health Care crisis and how to deal with it. Since neither Hillary nor a GOP nominee like McCain or Frist would run from these issues, it will likely take center stage in 2008 and promises to be one of the most difficult issues we've seen due to the number of unknowns and the profound effect on the economy, the health care profession, and regular people that any change in federal policy would have. SocSec reform is actually easier IMO, and my guess is that Bush will get a bill through sometime before he leaves office, even if he has to wait for the imminent GOP Senate gains in '06 (and if you don't believe that, just look at the layout of the races).

Posted by: Dave at March 24, 2005 04:39 PM

Brian;
To your issues. 1)price controls are already in place. DRG's for hospitalized patient, specific reimbursement rates for everything else Obviously they could make them tighter (and they will) 2) new therapies: politically hard to say "there's this new therapy that lessens your risk of dying of a heart attack but you're 75 so you don't get it" 3)Medicare doesn't have any marketing costs. 4) Drug costs. Good question. We actually HAD a solution to that for Medicare by not paying for them but the cat's out of the bag now 5) Medicare doesn't pay for cosmetic surgery. 6) High cost procedures are a problem and there are and have been prior authorization procedures in place. Problem is similar to what I said under #2.

I'm not trying to be difficult it's just that the problem is VERY difficult. But hey thanks for the target practice.;-)

Posted by: c3 at March 24, 2005 04:59 PM

Yeah, it's easy to assume that it's simply a money-grab if you haven't seen it from the inside. Not that there isn't some grabbin' going on ("boutique" clinics come to mind) but as a former clinic manager I can assure you that 3rd-party payors do NOT just let you bill whatever you feel like, or for whatever you feel like. And haven't for quite some long time.

Well, actually, you CAN bill whatever and for whatever you feel like, they just won't pay for it. Good luck collecting from the patient for uncovered services.

Posted by: Tully at March 24, 2005 08:29 PM

Tully, I acknowledge your point about how it's easy to make assumptions from the outside. How many times does one have to think one thing and then learn another in this life to be respectful of expert views? Virtually every time I learn to do something new I learn how much harder it is than I thought.

Chris, agreed on the notion that explicit rationing will be politically very unpopular. But we're going to end up with more and more de facto rationing based on ability to pay, and variety within plans, and this spiral is just going to keep riddling people's healthcare plans with loopholes. Companies are moving to self-pay plans that allow them to change the rules if a member gets some uncommon expensive disease. Lietime deductibles are making a mockery of the idea of insurance, turning it into something that pays for ordinary costs but might leave you high and dry when you most need protection. I'm sure you know what I mean.

But with most of the options you just "shot down" I was really referring to overall healthcare reform, not medicare. (why I said medicare/rising healthcare costs may be even more threatening. sorry for the confusion) My sense is that part of the reason why medicare is increasingly problematic is that other parts of the system are getting better and better at shielding themselves from the worst risks and the biggest costs. There will be no way to fix medicare as long it gets stuck paying the bill for the poorest and the sickest, right?

I may be off the mark, but that's my hypothesis, that fixing medicare really entails reforming the system as a whole. Spiraling medicare costs are a symptom of the overall system's flaws. They're the canary.


So regarding my suggestions, for example, all consumers pay for the cost of drug ads on tv and in magazines. How much cheaper could drugs be minus those costs?

How much cheaper would drug costs be for the uninsured if those in good health who are members of a very large group plan didn't get the best negotiated cost? As a whole, the system has partial controls, which results in vast inequities.

Cosmetic surgery: a tax on such optional procedures could raise revenue, and I think it'd be politically popular to tax vanity.

Posted by: bk at March 25, 2005 09:32 AM
There will be no way to fix medicare as long it gets stuck paying the bill for the poorest and the sickest, right?

For Medicare, sickest not necessarily poorest. Basic problem of Medicare is the population it serves. Even a healthy 80 spends a lot on healthcare. Better healthcare leads to longer living. Longer living leads to more healthcare consumption. You can see the cycle were in.

Posted by: c3 at March 25, 2005 02:54 PM

I guess mostly asses post any more.

Posted by: Evee at March 25, 2005 07:21 PM

I'm sorry Evee, I don't understand.

Posted by: c3 at March 26, 2005 01:28 PM
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