Blog on the Run: Reloaded

Wednesday, August 17, 2011 8:09 pm

That silence you hear is the sound of exploding health-care costs not exploding anymore

Filed under: More fact-based arguing, please — Lex @ 8:09 pm
Tags: ,

and the media not covering the fact.

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 breakneck 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.” …

In the S&P report on healthcare spending released on July 21, [Blitzer] wrote: “many participants [in the healthcare system] have indicated that providers are trying to address health care reform and are looking for ways to control costs. If true, this combination certainly would be a contributory factor to the moderation in cost we have witnessed since early 2010.”

Zeke Emanuel, an oncologist and former special adviser for health policy to White House Office of Management and Budget director Peter Orszag, is certain that this is what is happening.  When I spoke to him last week, Emanuel, said:  “This is not mere chance: this is directly related to the initiation of health care reform.”  It is  not the result of reform, Emmanuel emphasized.  The reform measures that will rein in Medicare inflation have not yet been implemented.  But, he explained, providers are “anticipating the Affordable Care Act kicking in.”  They can’t wait until the end of 2013: “They have to act today.  Everywhere I go,” Emanuel, added, “medical schools and hospitals are asking me, ‘How can we cut our costs by 10 to 15 percent?’

“This is doable, since there is so much fat in the system” said Emanuel,  a doctor who is well aware of just how often unnecessary tests and procedures hike medical bills, while exposing patients to needless risks.  It is worth noting that Emanuel is far from cavalier about cutting Medicare benefits that could help patients.  A medical ethicist, he has recently been chosen to lead the medical ethics department at the University of Pennsylvania’s Perelman School of Medicine. But Emanuel understands that patients do not benefit from waste, and that today, our medical culture encourages health care providers to “do more,” without always considering whether medical evidence justifies another test or treatment.

A couple of points to ponder here:

  • The mechanisms of the Affordable Care Act that most directly limit growth in health-care costs haven’t even kicked in yet. So we don’t know how much the act has saved or is likely to save. But the early, not-directly-probative evidence is that those savings are likely to be substantial — at least enough that the act pays for itself (which means, among other things, insuring 30 million previously uninsured Americans).
  • If, in fact, this slowing in the growth rate continues, then all of a sudden, one of the most widely used arguments for draconian cuts in federal spending gets a leg knocked out from under it. Given Washington Republicans’ imperviousness to fact in a wide range of public-policy issues, I do not expect this outcome to change the tone or substance of what they say. But, if this info gets a wider hearing, it might well change the way in which voters respond to what they say.

  

 

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1 Comment »

  1. “The mechanisms of the Affordable Care Act that most directly limit growth in health-care costs haven’t even kicked in yet. So we don’t know how much the act has saved or is likely to save. But the early, not-directly-probative evidence is that those savings are likely to be substantial — at least enough that the act pays for itself ”

    DELUSIONAL !!!!

    Can you say

    Cost Shifting

    Now for your head exploder

    Comment by Fred Gregory — Thursday, August 18, 2011 12:06 am @ 12:06 am | Reply


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