Obama’s health care czars to seize Congressional power – key to achieving a single taxpayer system

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First, let’s get the skinny on the *real* agenda… straight from the donkey’s mouth in 2003 as an IL junior Senator, running for the US Senate.

I happen to be a proponent of a single payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.

Now that we know just what is this President’s ideal, we need only examine the steps he, with the help of Pelosi, Reid, and the Democrats in Congress, intend to take in order to achieve his quest.

In this post I will connect the puzzle pieces of O’health care that will demonstrate that the proposals on the table are constructed to eliminate private care from the free market; slash Medicare (and any new public option) health care coverage and payout; wrest control from Congress of these government run program decision and put them in the hands of the White House; how Obama Medicare will no longer be the “treasured” and “beloved” Medicare of our parents and grandparents; … and finally, put forth some alternative solutions to this whole mess.

And to accomplish this, I’m breaking down this post into several subsections:

Introduction
The Cost Problem
Obama’s Health Czars, the IMAC
Obama’s Medicare is not your parents’ Medicare
Solutions


INTRODUCTION

For a single payer system to come to fruition, all other forms of payment sources (i.e. private insurers) need to disappear… for like the “Highlander” series of immortals, “there can be only one”.

How does one change over an entire nation to a single taxpayer system? Little by little, of course.

But Obama begins with a built in generation of seniors already on a government run system… Medicare (original) and the supplementals, Medicare A (in patient care), Medicare B (outpatient care, doctor visits etc), Medicare C (Medicare Advantage plans or private Medigap plan) and Medicare D (drugs/prescriptions).

Additionally, there’s another 78 million baby boomers waiting in the wings to go onto the system, with transition completed by approximately 2030… or two decades downline. For as I pointed out in my companion piece on Aug 3rd, everyone *must* enroll in Medicare at age 65, or you forfeit your social security retirement checks because of a 1993 Clinton regulation change to the Social Security Act.

With present estimates of population growth, this makes Obama’s quest for single payer easier by having approx 20% of the US population mandated into Medicare by holding their SS checks hostage.

That 2030 date for boomers, 20 years away, echoes in my ears. What did Obama say in his primary debate remarks? Oh yes….

“But I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process. I can envision a decade out or 15 years out or 20 years out where we’ve got a much more portable system”

How convenient. In 20 years, he’ll have a substantial percentage already in what is proposed to be tomorrow’s Medicare…. effortlessly. How about the rest?

A “portable system” will not be tied to an employer, but to the individuals. This means he also needs to eliminate employer based insurance. Additionally, a genuine “portable system” will be uniform in all US states.

The latter, in itself, is not necessarily an unlofty goal. However each state has it’s own regulations of health care coverage. So the question would be, would any “portable” plan mandate for both public and private options be modeled after the heaviest regulated – and most expensive – state criteria? If that’s the case, those living in more affordable health care states will find their premiums increased immediately to the level of the most expensive states’ mandates with a new standard… i.e. MA, NJ and NY, for example.

Enter the House bill, the favored foundation for the proposed system, HR 3200… establishing a public option to get more of “the rest” of the population on government insurance close to immediately.

We’ve already discussed many of the House specifics on this bill, and it’s proposed public option. What stands out in my mind is that the bill mandates *all* employers will provide medical coverage to their employees…. or else face tax penalties. Per the House bill, employers can accomplish this via signing on to the less expensive public option, continue thru a private insurer, or continue their corporate plan that functions as it’s own funding source/insurance provider.

For those that are self-employed, there are no options to band together to tap into private plans that can be accessed more affordably via group rates. Instead individuals will also be mandated to insure themselves and families, or face tax penalties yearly. This also means that proving you have health insurance now becomes part of your IRS filings annually.

Now it may strike one as odd that a man who strives to eliminate employer based insurance supports a bill that mandates employers provide coverage, or else…. But you have to consider that bill, itself, is designed to do two things… force private insurers out of business by the inability to compete with a cheaper premium public option, and force employers out of providing any insurance for sheer survival, and financial expediency.

When a business is considering their bottom line, employers may find it more cost effective to simply pay the penalties and (per mandate) increase their employees salaries by the price of the premiums. Providing the health plan when the government insured pool is only getting larger is a recipe for ever increasing premiums with the enormous cost shifting that will be incurred.

For everyone – from the self-employed individual to the small business owner – costs loom either way. Obama’s proposed social health experiment happens at a time when the US economy is not only floundering, but incurred a tripled/quadrupled national debt in the span of six months with the stimulus, the inevitable cap and trade, and a not so shaved down Congressional budget. Without a healthy, and rapidly rebounding economy, and a working force with burgeoning incomes, the dollar value and cost of living faces a dubious future at best.

Despite all the CBO’s figures, pointing out the non-savings of the health care proposals (and, in fact, increased debt), many pundits are still singing the public option blues. Weird thing is, you can see the path to single payer with their own arguments. Allow me to demonstrate, using a series by Uwe E. Reinhardt from the NY Times Economix blog. After reading most of Reinhardt’s extensive commentary on the public option, I can safely pronounce him a supporter of public options, if not full single payer systems.

But his presentation of health care savings casually tosses aside the financial health of hospitals and medical professionals in favor of controlling these costs. In other words, he has no problem reducing both medical professionals and providers to a non-profit status in order to achieve savings. This is a concept that, at it’s very heart, I vehemently oppose.

But Reinhardt’s view is a common one. So I choose to start with a naysayer’s point of view who argues for a “public option” … and use his own presentations to demonstrate that Obama’s plan is to make the private insurer extinct in a matter of 10-20 years.

In his April 2009 post, Pricing a Medicare-like Public Health Plan, Reinhardt himself notes that Obama and Congress face a very unpleasant choice in structuring a public option based on a Medicare-type coveage. In fact, he points out doing so will drive up the private insurer option for two reasons:

First, according to the Lewin Group, private insurers now pay hospitals on average 41 percent more than Medicare does for the same care, and they pay doctors 23 percent more than Medicare. To be sure, a public health plan would broaden the revenue base for providers of health care by covering 28 million of hitherto uninsured Americans. But taking into account the lower fees paid by the public plan, its net effect would be to reduce overall hospital revenue by 4.6 percent below current levels, and physician revenue by 6.8 percent.

We should not expect the providers of health care to accept this reduction in revenue peacefully.

[Mata Musing: why should they “peacefully” accept government income control??

Second, including the profit margins and brokers’ commissions that private insurers must set aside, overall administrative costs are assumed in the Lewin report to equal 31.2 percent of claims paid in private plans, but only 13.2 percent in the public plan.

Spending on brokers’ commissions by the private plans, however, would probably be reduced, if not eliminated, by the National Insurance Exchange proposed by President Obama. [Mata Musing: also called job losses…] Such an exchange would be modeled on the federal health plan, the “framers market” in which members of Congress and their staff shop for health insurance. The exchange would present prospective customers with a well-organized, user-friendly menu of choices from which they can chose without the help of a broker. The exchange would also regulate the insurers offering their products.

insurance exchange to replace brokers would reduce somewhat the premium advantage of the public plan, and so might adverse-risk selection against that plan. If relatively sicker people preferred the public plan, or if private competitors managed somehow to end up with a healthier risk pool -– as private health plans serving Medicare beneficiaries apparently did in the 1980s and 1990s -– then the premium advantage of a public plan would shrink further.

Reinhardt’s second paragraph sniffs of health profiling in order to “spread the risk” around. I’m not sure Congress is prepared for that one yet….

The Lewin Group also predicts public option would gain approx 130 million enrollees because of the lower premiums, while the private insurance industry would *lose 119 million clients from its current base* of about 180 million nonelderly insured. This is akin to losing 67% of it’s business… a fate that challenges it’s very survival.

So far, even using Reinhardt’s suggestions, it’s not looking too good for private insurers survival.

Then there’s the low payouts by Medicare… our current model of a “public option”. Below is a visual [from Ezra Klein’s July 1st article] that makes cost shifting abundantly clear.

Payouts compared JPG

Not leaving any stone unturned, the Lewin Group also examined what would happen if the Medicare reimbursements to providers were increased. Their determination was that a public option premium that was 22% lower would shrink to only 9% lower than private plans.

This gives one a heads up as to what to expect…. any public option (and one that is likely to completely replace Medicare as we know it today), will continue to be low paying in order to keep premiums low and appealing. And, in fact, Obama has specific plans on doing just that, as you’ll see in the third section here. But I won’t leap ahead of myself.

The second heads up is private insurance will become a product of the past. With an increased load of citizens on low payout public plans, there will be even more of a burden on the private insurers, who are absorbing the facilities’ and physicians’ losses. They cannot last long when the few private insurers are shouldering the shortages by a majority in low paying public plans.

Reinhardt also has a primer on how hospitals get paid that makes for interesting reading.

The burning question is…. when private insurers are no longer around to cover the losses, just who will make up for these losses?

The answer would be, everyone else…. the facilities, the medical professionals will be forced into accepting severe cuts as their normal income, and we the taxpayers/benficiaries will be saddled with with higher premiums in order the close the payment gap.

Needless to say, the premiums we start out with will steadily increase as the private insurer disappears from the market. Once fully extinct, the public plan – sans it’s private insurer “sugar daddy” – will have to cut services, and the premiums have no where to go but up.

THE COSTS PROBLEM

If there is one thing truthful from the POTUS lips, it is that the rising costs of Medicare, shouldered by the taxpayer, facilities, medical professionals and private insurers, is unsustainable… and thereby need addressing. You will get no argument from me on that point. Where I do argue is their method of “addressing”.

There is no single factor that is driving the costs of health care, but rather multiple factors.

One way of measuring a nation’s health care costs is expressed as a percentage to the nation’s GDP, or data expressed in Purchasing Parity Dollars (PPP$). The below graph is from a NY Times Econonix blog by Princeton’s Uwe E. Reinhardt Nov 2008. Or, as Reinhardt puts it:

One can think of PPP$s as dollars that buy roughly the same basket of real goods and services in different countries.

Economix graph health costs per GDP

Analyzing the difference between the US and Canadian spending, Reinhard notes the relationship between a nation’s wealth, and it’s health care spending.

Just knowing the G.D.P. per capita of nations helps us explain about 86 percent of the variation in how much different countries pay for health care for the average person. Canada, for example, on average spent only PPP$3,678 on health care per person in 2006, which is about 55 percent of the amount the United States paid per person. But Canada’s G.D.P. per capita in 2006 was also smaller than the comparable United States figure, although not that much smaller (it was 84 percent of the American level).

The line helps us estimate that roughly $1,141 of the $3,036 difference between Canadian and American health spending per capita – or 38 percent — can be explained by the underlying difference in G.D.P. per capita alone.

An additional insight from the graph, however, is that even after adjustment for differences in G.D.P. per capita, the United States in 2006 spent $1,895 more on health care than would have been predicted after such an adjustment. If G.D.P. per capita were the only factor driving the difference between United States health spending and that of other nations, the United States would be expected to have spent an average of only $4,819 per capita on health care rather than the $6,714 it actually spent.

Basically, it’s a flashy way of saying that altho our spending is high per capita, it’s not as high as the raw numbers show. But it does give an approximate amount that is considered “excessive spending”… meaning spending that is attributed to other factors that increase the costs of US health care.

Reinhardt names some of these factors as:

1. higher prices for the same health care goods and services than are paid in other countries for the same goods and services;

2. significantly higher administrative overhead costs than are incurred in other countries with simpler health-insurance systems;

3. more widespread use of high-cost, high-tech equipment and procedures than are used in other countries;

4. higher treatment costs triggered by our uniquely American tort laws, which in the context of medicine can lead to “defensive medicine” — that is, the application of tests and procedures mainly as a defense against possible malpractice litigation, rather than as a clinical imperative.

So now we see some avenues of “reform”… smarter shopping/pricing for health care goods, reducing overhead admin costs, and tort reform. We sure don’t want to yield state of the art medical equipment.

In Reinhardt’s Part II, he discusses what he calls the “indefensible administrative costs by private insurers.

One thing Americans do buy with this extra spending is an administrative overhead load that is huge by international standards. The McKinsey Global Institute estimated that excess spending on “health administration and insurance” accounted for as much as 21 percent of the estimated total excess spending ($477 billion in 2003). Brought forward, that 21 percent of excess spending on administration would amount to about $120 billion in 2006 and about $150 billion in 2008. It would have been more than enough to finance universal health insurance this year.

The McKinsey team estimated that about 85 percent of this excess administrative overhead can be attributed to the highly complex private health insurance system in the United States. Product design, underwriting and marketing account for about two-thirds of that total. The remaining 15 percent was attributed to public payers that are not saddled with the high cost of product design, medical underwriting and marketing, and that therefore spend a far smaller fraction of their total spending on administration.

Reinhardt’s concluded that Medicare has better control over it’s costs, and the largest excess were eminating from the private sector. Again, common opinion… but one based on a faulty premise.

For example, he didn’t acknowledge that private insurers face admin costs not imposed on public options. Streaming lining government mandated paper pushing could go a long way for reigning in admin costs (both private *and* Medicare).

Even more important, Mr. Reinhardt began with conveniently faulty figures. He is either unaware, or ignores an AMA study of Medicare vs private administrative costs that totally contradicts his conclusion that Medicare admin cost is lower. And the reason for that is Medicare doesn’t report all the costs associated with administering Medicare. When you add these left out costs, Medicare’s admin costs have been rising more rapidly than private insurers’ in the recent past.

* Reporting administrative costs as percentages rather than dollars. Presenting administrative costs as a percentage of total health care costs gives a misleading impression of Medicare’s efficiency relative to private insurance. Medicare patients are an expensive population, with much higher medical costs per person and per claim relative to the general privately insured population. Thus, an identical dollar amount of administrative cost per enrollee or per claim in
the two sectors would make Medicare administrative costs appear lower. For example, a $10 administrative cost per insurance claim represents 10 percent of a $100 claim but only 1 percent of a $1,000 claim. Similarly, rising medical costs of Medicare enrollees create the appearance that Medicare is becoming administratively more efficient over time.

* Confusing costs of regulatory compliance with health plan inefficiency. Private insurers face administrative costs not imposed on public programs, such as the need to comply with multiple sets of state and federal regulations. Both overregulation and arbitrary differences in regulation create unnecessary administrative costs and prevent cost-savings from economies of scale. Private insurers also must pay premium taxes, usually counted as an administrative expense,
driving up administrative costs as a percentage of total costs and creating the appearance of reduced efficiency.

As the AMA study points out, we’re not comparing apples to apples here when there are undisclosed costs. Some of what is *not* included as part of Medicare costs:

• Tax collection to fund Medicare—this is analogous to premium collection by private insurers, but whereas premium collection expenses of private insurers are rightly counted as administrative costs, tax collection expenses incurred by employers and the Internal Revenue Service do not appear in the official Medicare or NHE accounting systems, and so are usually overlooked

• Medicare program marketing, outreach and education

• Medicare program customer service

• Medicare program auditing by the Office of the Inspector General

• Medicare program contract negotiation

• Building costs of the Centers for Medicare & Medicaid Services (CMS) dedicated to the Medicare program

• Staff salaries for CMS personnel with Medicare program responsibilities

• Congressional resources exhausted each year on setting Medicare payment rates for services

Despite cooking the books on government costs, and despite overregulation and variances in regulation from state to state (which also drives up private insurer costs), private insurers’ admin costs – a large part of the picture for debate – are still more efficient than the public option, Medicare.

But the final item above – Congressional resources spent – brings me to the next section…

OBAMA’s HEALTH CARE CZARS SEIZE CONGRESSIONAL POWER

To grow the public plan requires controlling the *perceived* costs of such a system. And once again, our POTUS doesn’t trust Congress, but transfers their power to the executive branch using that ever popular “czar” concept. Like TARP, he’s getting these unconstitutional powers to control the coverage, delivery, and payment of Medicare by drafting legislation for Rockefeller to carry on his behalf.

Thus enters the POTUS thumb on our health care under the guise of the Independent Medicare Advisory Council… or IMAC. With this council, he and five appointees can devise what will be cut, and design what services will be delivered. And “cut” is all they can do, since they do not have the power to appropriate funds.

Doesn’t anyone wonder what was said to the Blue Dogs in the back room negotiations to make them cave to Obama/Pelosi/Reid? Quite simply, they liked the IMAC. And why wouldn’t they? With the power shift to the WH goes constituent accountability… They can’t take the blame for what they don’t control.

So while the world was distracted with Gates and other 24/7 media stories, the White House was busy writing the IMAC legislation.

Here’s how it works… the appointed (approved by the Senate) health czars are tasked with the responsibility of recommending health care policy changes; i.e. adjustments in coverage and payment amounts to providers. These are presented to the WH occupant for approval. Their goal? Endeavoring to keep Medicare within budget under the growing strain. Their recommendations will be reviewed and submitted annually in October of each calendar year. This now gives the President ultimate control to shape of public option health care with almost no oversight.

This power shift gives Congress only the power to “DISapprove” the POTUS and czars policy recommendations prior to the implementation. And this disapproval requires a joint resolution that must be done within 30 days.

Additionally, and taking a cue from the original TARP regulations empowering the Treasury Secretary last year, there is not only severe limitations on challenging and reviewing the health czars’ approved recommendations by public entities who may be “harmed” by the policy, but specific language that exempts these czars from jurisdiction in any US court of law.

“(j) LIMITATION ON JUDICIAL REVIEW.—A person adversely affected by a recommendation of the Council that is approved by the President under subsection (f) may file a petition for review, not later than 30 days after such approval, in the United States Court of Appeals for the District of Columbia. Review shall be limited to the question whether the Council’s recommendation exceeded the Council’s authority under subsection (c) or (d). Notwithstanding the previous sentence, a determination by the Chief Actuary under subsections (c)(6) and (d)(4) shall serve as conclusive evidence that the requirements of subsections (c)(5) and (d)(3)(A), respectively, have been met, and no further review of the Council’s compliance with those requirements shall be available. Review under this subsection shall be heard and decided expeditiously. Other than as stated in this subsection, no court shall have jurisdiction to review a recommendation of the Council, or the President’s approval or disapproval of such a recommendation.

Or, as the MedicareUpdate blog put it:

The Act also provides the Council with the authority to recommend broader Medicare reforms and contains a similar approval/disapproval process for recommended reforms.

In addition to limiting Congress’ current authority, the Act provides for limited judicial review. It appears that a person adversely affected by the Council’s approved recommendations would have to file an action in the U.S. Court of Appeals for the District of Columbia within 30 days of the President’s approval.

However, the scope of the review would be limited to whether the Council’s recommendation exceeded the scope of the Council’s authority for determining annual payment updates or making reforms. No other judicial review of the recommendations of the Council, or of the President’s approval or disapproval of recommendations, would be available.

Obama, himself, must be relatively confident about re’election since this Act would not allow the IMAC czars to make an annual payment or reform recommendation until September 15, 2014 or after. Nonetheless, legislation is hard to undue, and in the event of an Obama loss in 2012, any new POTUS would have his hands full undoing what this admin has wrought.

Needless to say, while we were all busy watching the right hand of the Obama admin, dancing with Gates, the left hand was *very* busy in the back rooms of the halls of Congress, selling his latest power grab.

Patientpowernow.org had a late July post on Obama’s chutzpah, citing The New Atlantis article by James Capretta.

The president has decided — just days before the deadline he himself set for passage of health care bills in both chambers of Congress — that he wants to create a new and very powerful executive branch agency, the Independent Medicare Advisory Council (IMAC), which would be accountable only to him and have the authority to re-write the Medicare program from top to bottom by executive memo. Now that’s audacious.

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That would be a remarkable shift of power on its own, but the president’s proposal doesn’t stop there. Not only would the council make recommendations on payment updates, it would also have the authority to propose other “Medicare reforms” which would go into effect unless Congress could muster veto override majorities in opposition. …

Still, the fact that the administration is pushing this bill at all speaks volumes. Here’s a Democratic president telling a Democratic Congress that it can’t be trusted to run Medicare anymore. That’s stunning, especially so because Democrats, including the president, are working feverishly to exert additional governmental control over health insurance for working age Americans. If Congress can’t run Medicare well, what possible rationale is there for standing up another government-run insurance plan?

So why would this make the Blue Dogs cave, you ask? As David Rogers at Politico commented mid July, Congressional members up for re’election are vitually insulated against charges of irresponsible fiscal Medicare policies.

The proposed five-member Independent Medicare Advisory Council would be charged with making two annual reports [Mata Musing: one, per the most recently issued WH bill language] dictating updated rates for Medicare providers including physicians, hospitals, skilled nursing facilities, home health and durable medical equipment. Congress could block the recommendations only if lawmakers agreed within 30 days on a resolution, and the greater veto power would lie with the White House itself.

For this reason, the delayed effective date of Sept. 15, 2014 — well after Obama’s first term — may be reason for pause for Democrats. And in the midst of what is already a difficult debate over healthcare reform, the proposal represents a huge shift of power away from the legislative branch.

This is especially true if Democrats go ahead with their statutory pay-go proposal that would require future Congresses to come up with savings or new revenues to pay for legislative initiatives. In fact, the current House healthcare proposal incorporates hundreds of billions of dollars in such offsets; if the whole payment decision process is shifted to the executive branch, it will be harder for lawmakers to claim the same level of savings in the future.

This may be part of the appeal for Obama and White House Budget Director Peter Orszag. In a July 8 letter to House chairmen, Orszag warned that a “deficit neutral” healthcare reform bill “is not enough” and that more is needed to sustain Medicare for future generations.

Now that we know the political appeal for health czars, what about effective performance?

For this, let’s go right to the CBO director, Douglas W. Elmendorf, and his analysis via a letter to Steny Hoyer on July 25th, 2009. (Heard much about this in the news?)

Frankly, I’d recommend the CBO analysis letter for reading over the proposed Obama written legislation as it drives home reality… and in real layman language. Make no mistake, compared with the debacle they analyzed as a real money drain prior, the IMAC is an improvement when it comes to controlling costs. But at what price to the US citizen who is insured? Well, they lay it out. Obama wanted to “save money”, and they tell him how… cut, cut, cut.

To ensure that current legislation puts the federal budget on a more sustainable path will probably require creating a framework for federal health care spending that imposes ongoing pressure to increase efficiency over time—particularly, but not exclusively, in the case of providers. Such pressure could be imposed in several ways, including reducing Medicare’s payment updates automatically to take into account expected productivity gains; reducing Medicare payments in areas of the country with higher spending; giving an official in the executive branch broad discretion to change Medicare to produce savings (especially if there was also an across-the-board reduction in payments to providers if savings are not achieved in other ways); and limiting the growth of Medicare’s implicit subsidy of premiums. (CBO discussed a number of such approaches in a June 16 letter to Senators Conrad and Gregg.)

This letter focuses on proposals to give the President broad authority to make changes in the Medicare program, subject to Congressional disapproval. Such proposals could enhance the prospects for additional long-term cost control, but they would also entail shifting some power from the Congress to the executive branch.

In particular, CBO reviewed draft legislation transmitted to the Congress by the Administration on July 17, 2009, titled the Independent Medicare Advisory Council Act of 2009. CBO estimates that enacting the proposal, as drafted, would yield savings of $2 billion over the 2010–2019 period (with all of the savings realized in fiscal years 2016 through 2019) if the proposal was added to H.R. 3200, the America’s Affordable Health Choices Act of 2009, as introduced in the House of Representatives. This estimate represents the expected value of the 10-year savings from the proposal: In CBO’s judgment, the probability is high that no savings would be realized, for reasons discussed below, but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis.

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As noted earlier, the estimated savings of $2 billion over the latter half of the 2010–2019 period represent a probabilistic assessment of a range of possible outcomes. On the one hand, savings might not be realized at all because the proposal specifies a process without specific goals for savings or a “fall-back” plan for ensuring spending reductions if the combination of annual IMAC recommendations and Presidential approval does not produce hoped-for savings. (A fall-back plan might, for example, specify certain automatic reductions in payment rates and increases in beneficiaries’ premiums or copayments if the process did not otherwise produce a certain amount of projected savings.) On the other hand, there is a small chance, in CBO’s judgment, that the council would propose and the President would approve significant changes to Medicare that would reap substantial savings.

Expected savings from the IMAC proposal would grow after 2019, but many of the above points would still apply, reducing the likelihood of attaining large annual savings. The considerable uncertainty about the amount of savings that might occur within the first 10-year projection period would compound in future decades. Although it is possible that savings would grow significantly after 2019, CBO concludes that the probability of this outcome is low for the proposal as drafted, particularly because there is no fall-back mechanism to ensure some minimum level of spending cuts beyond those already included in H.R. 3200.

As you go further thru the CBO letter/analysis, actions that actually *would* result in savings may amount annually to 7% of total spending. But there’s a price to be paid for that additional savings…

Achieving such savings, in addition to those estimated to result from the provisions in H.R. 3200 that govern Medicare’s payment rates, would probably require significant changes in the program’s coverage, benefit design, and payment and delivery systems— and a council with the clear mandate, independence, and resources to propose such changes.

To clarify what those “significant changes” mean, the CBO continues advising the actions that would result in obvious savings… and those are the cuts, cuts, cuts. i.e. “across the board reduction in payments” and increasing premiums. Nor would it be difficult to expand this same power to Medicaid… or any “other” public plan.

Does it get any better fiscally for beyond the 2019 projects? heh… CBO recommends this for savings:

Looking beyond 2019, a much stronger IMAC-type proposal could reap considerably more savings, depending on which specific features identified above were included and how those features were crafted in legislation. In particular, if the legislation were to provide IMAC with broad authority, establish ambitious but feasible savings targets, and create a clear fall-back mechanism for instituting across-the-board reductions in net Medicare outlays, CBO believes the council would identify steps that could eventually achieve annual savings equal to several percent of Medicare spending. In the absence of a fall-back mechanism, CBO expects that the probability that the President would approve recommended changes that would lead to such significant savings would be lower.

Several percent of annual Medicare spending would amount to tens of billions of dollars per year after 2019. By that point, H.R. 3200, as introduced, would already be on track to achieve tens of billions of dollars in Medicare savings each year, primarily as a result of provisions that would reduce payments to Medicare providers relative to those projected in the current-law baseline. (Total federal resources devoted to health care programs would increase under the introduced version of that bill, however, because of the provisions aimed at making health insurance available to more people.) Substantial additional savings from an IMAC-type proposal would probably require significant changes in coverage, benefit design, and payment and delivery systems aimed at reducing the quantity and intensity of services provided.

Two things should have caught your attentions. First, the CBO is all for an all powerful czar council. Secondly, the word Medicare is rarely mentioned without the words “reduced payment” nearby. Each year Medicare (or any other public plan) can be morphed, shrunk and adjusted… with Congress powerless to do anything but get fast consensus for disapprovel..

The complete irony is that they are concentrating this totaltarian power for the pathetically low savings of $2 billion over the period of four years (and *maybe* some increased savings later, but only with cuts, cuts, cuts across the board, or premium increases).

Here’s where I remind you that the Hall v Sebelius attorneys’ computations used government databases to show that allowing even 1% of financially capable Medicare patients to opt out saves $1.5 billion annually, and approximately $3.4 billion per year by 2017.

When there is a simple “opt out” answer that saves considerably more, the idea of reinventing the wheel to turn over massive authority to five unelected officials for a mere $2 bil over four years seems borderline insanity.

“Let me be clear”, as Obama likes to say… if this “reform” is all about savings, why is opting out of Medicare, sans losing your SS checks, and garnishing those savings not even being considered?

Because it’s not about “reform”… it’s about power. And a serious power grab it is.

Based on the latest CBO analysis of Obama’s czars, the IMAC is still an inferior solution for savings to allowing Medicare opt outs… not to mention the downline ramifications of turning over control of reimbursements and coverage stands to a group of unelected officials.

And now this brings me to Medicare under Obama, or….

Obama’s Medicare is not your parents’/grandparents’ Medicare

Larry Weisenthal – our resident cancer research guy who’s opinions I respect (even if he doesn’t believe it) – touts over and over how beloved and respected Medicare is to it’s participants. This is, to his mind, justification for Obama’s “reform”…. moving everyone to a “great” system.

There is no doubt that what he says of seniors’ attitudes towards their Medicare coverage has a ring of truth. However, with that statement comes caveats that Larry does not include… whether because of a certain stubborn tenacious streak to hang on to an old, familiar tune, or because he genuinely does not recognize that Obama and his czars’ plans for Medicare will distort it beyond all recognition.

The simple fact is my headline above… what you or present Medicare recipients know as Medicare today, or even the recent past, will not be O’Medicare of the future. The IMAC promises no improvement, only limitations, restrictions and stricter policy.

Medicare has morphed considerably since it’s orginal inception. It has a history fraught with broken promises, as Grace-Marie Turner, President of Galen.org …. a health reform think tank… reminds us in her June 2009 article, “Medicare: A Model Mess”.

Fans of the idea promise that won’t happen, claiming that the government plan would play by the same rules as private plans and would pay hospitals and doctors at almost the same rates as private insurers.

But the history of Medicare shows that this is a promise the government just won’t keep. At its inception, Congress assured hospitals, physicians and other caregivers that Medicare would pay all costs associated with providing medical services to beneficiaries.

The government claimed it wouldn’t decide which medical costs were justified. In fact, original Medicare law prohibited officials from questioning the appropriateness of health-care outlays.

In the ’80s, the government scrapped this system. Officials claimed that hospitals, insensitive to costs, were needlessly driving up public health-care spending. Congress imposed a system to pay hospitals and physicians at rates determined by the government — in layman’s terms, price controls.

Medicare’s supporters also went to great lengths, at the program’s birth, to convince seniors that they’d still have the option of buying private insurance. The Medicare law specifically says it does not “preclude any state from providing, or any individual from purchasing or otherwise securing, protection against the cost of any health services.”

Yet, despite these promises, Medicare drew virtually the entire senior population onto public insurance.

~~~

The distortions and broken promises go on and on. Originally, Congress promised that Medicare wouldn’t lead to interference in the doctor-patient relationship by restricting seniors’ ability to buy medical services privately. That went out the window in 1997. Now doctors must get out of Medicare entirely for two years before they can accept private-paying patients who are eligible for Medicare.

Yet, despite its monopoly on seniors’ health care, the government has been unable to control Medicare’s costs. The Medicare trustees recently announced that the program is at least $37.8 trillion in the red over coming decades — and will start running out of money in just eight years.

Back in 2003, seniors supported building reform using a Medicare model while younger citizens favored private care. Then, Seniors wanted the same drug benefits as private workers enjoyed, even if they had to pay a bit more. Guess it wasn’t perfect then, either.

But years of increasing premiums and deepening cuts, plus increased difficulty in accessing doctors who accept Medicare patients has reversed that. Even the AARP is concerned with Obama’s proposed health czars.

The House bill — the congressional proposal that has advanced the most — would reduce projected increases in Medicare payments to providers by more than $500 billion over 10 years, a gross cut of about 7 percent over the period. But the legislation would also plow nearly $300 billion back into the program, mainly to sweeten payments to doctors.

That still leaves a net cut of more than $200 billion, which would be used to offset new federal subsidies for workers and their families now lacking health insurance. Those uninsured workers also pay the taxes that go to support medical care for the elderly.

Despite the cuts, the seniors’ lobby is supporting the House legislation. But AARP says that’s as far as the cost-cutting should go. The group says it’s troubled by a proposal recently embraced by Obama to create a special advisory panel that would regularly recommend more savings, with authority to force Congress to act on them. AARP says the costs board should also have to take into account effects on quality of care and access before making any recommendations.

“What we hear from our members is that to them Medicare savings sounds like cuts,” said Nora Super, AARP’s chief health care lobbyist. “Our members over 65 really value their Medicare program … and numbers like $500 billion are huge numbers, so that is really scary to our members.”

Seniors’ concerns have been showing up in opinion polls.

A Pew Research Center poll released Thursday found notably lower support among people 65 and older for the health care proposals in Congress. Twenty-nine percent of seniors said they “generally favored” the plans, compared to 38 percent of the total. Similarly, an NBC News/Wall Street Journal survey found that 28 percent of seniors said Obama’s plan was a good idea, compared with 36 percent of all respondents.

Let’s translate that poll of seniors… 72% of seniors disagreed with Obama’s plan. And well they should be concerned about Medicare cuts, because there’s not one word noting improvements or increased services… it’s all downhill from here.

So here we are, six years later. The heretofore, relatively happy seniors that were lobbying for prescription drugs to their healthcare are now bucking the change. On the flip side, the young are dissing private care and instead looking towards government care.

Again, back to the NY Times Economix blog on July 21st, only this time with Catherine Rampell, which has a few graphs based on some polling that reflects seniors’ resistance. The poll, as Rampell points out, reflects support among those who feel they will benefit the most… and in this case, the seniors know they are targeted with yet even *more* promised cuts via the IMAC. Meanwhile, the young people are looking for what they think is a free handout.

Seniors guarantee

In the above graph, only 45% of those over the age of 65 feel that the government should “guarantee” health insurance for everyone. Perhaps that’s because those over 65, plus the baby boomers have been paying for health insurance since the day they started working. The young? They have little invested by comparison.

Can you say something for nothing?

In the below graph, it’s not much better. A very slim majority (59%) suggest that the government should offer a public option for all Americans that is similar to Medicare.

Economix serions favor

This last chart below is the uninsured by age group. Notice that it’s the young adult… with the least invested in the system for work and contributions… that comprise most of the uninsured.

Economix Uninsured age groups

Seniors are no fools. They love the Medicare that began, full of promises and coverage that required little out of their pockets on a fixed income. Most the elderly are not up on the newest medical technology and treatments. They are a generation that trusts their physicians to know what is best for them. They would never dream they were being short changed on newer, and better alternative treatments not on the Medicare pay list.

But as the gaps in coverage became more obvious over time, they had to create Medicare B, C & D to fill in the blanks – all costing higher premiums to seniors on fixed incomes. Even at that, the treatment options are still not the latest/greatest on the market. And in fact, Medicare Advantage may offer some wider coverage, but is also more expensive for the same services on original Medicare.

But then the cuts started happening – more often, and deeper year after year. The access was getting tougher as the payouts to doctors and hospitals started decreasing more and more annually. As Dr. Zane Pollard said in his guest op-ed on American Thinker:

While 99% of physicians went into medicine because of the love of medicine and the challenge of helping our fellow man, economics are still important. My rent goes up 2% each year and the salaries of my employees go up 2% each year. Twenty years ago, ophthalmologists were paid $1800 for a cataract surgery and today $500. This is a 73% decrease in our fees. I do not know of many jobs in America that have seen this sort of lowering of fees.

But there is more to the story than just the lower fees. When I came to Atlanta, there was a well known ophthalmologist that charged $2500 for a cataract surgery as he felt the was the best. He had a terrific reputation and in fact I had my mother’s bilateral cataracts operated on by him with a wonderful result. She is now 94 and has 20/20 vision in both eyes. People would pay his $2500 fee.

However, then the government came in and said that any doctor that does Medicare work cannot accept more than the going rate ( now $500) or he or she would be severely fined. This put an end to his charging $2500. The government said it was illegal to accept more than the government-allowed rate. What I am driving at is that those of you well off will not be able to go to the head of the line under this new healthcare plan, just because you have money, as no physician will be willing to go against the law to treat you.

With quality deteriorating, access getting more difficult, and a bunch of health czars waiting in the wings to trim costs annually to just make what’s already headed down the tubes even worse, the seniors (and astute baby boomers) can read the writing on the wall. And they want nothing to do with this so called “reform”.

As I said, do not be fooled by those who tell you seniors “love” Medicare. They may have loved it more a decade ago, and still embrace the dream of quality health care in the golden years. They want health care worthy of the cash the govenment’s absconded from them for decades.

But today they are just trying to hang on to even the diminished health care known as Medicare…. the status quo… with hope it doesn’t deteriorate further. No naive whippersnapper sitting in the Oval Office can fool them into believing that Medicare under Obama and his czars will bear even the slightest resemblence to the Medicare of yesteryear… or even today.

There you have it… the steps to single payer. The systematic destruction of private health care, and employer provided health care.. Then the dictation of price, policy and services all tidily wrapped up under the power of more czars, immune from any US court jurisdiction, that will ride piggy back on the health care legislation. This ultimate path couldn’t be more obvious if it were a neon billboard in the Mohave desert.

SOLUTIONS

Since everyone whines those that criticize do not offer alternatives, I’m going to lay out some of the obvious reforms based on the aforementioned information.

First… do *not* pass any public option! Instead, serious attention to *actual* cost cutting reform should be done, and time to allow the free market to respond to those changes before anything further is done.

What we know is that the private insurance costs are driven up by overpaying to make up for Medicare underpayment. Thus making both medical facilities and treatment more cost effective, and streaminglining the paper processing should bring down the providers’ baseline costs, and thereby the private insurers overpayment proportionally.

Considering some of the notable and obvious flaws above, these are certainly some of the first reforms on my list.

~~~

* First and foremost, ANY 65+ senior who can afford private care should be given the choice to *opt out* without penalizing her/his social security retirement payments. If 5-10% of seniors do this, the savings would be significantly higher than HR 3200, as presented, and felt immediately felt… all without government expense.

* Health insurance plans should be concentrated on catastrophic care. Purchasing plans just to cover the expensive emergencies should be the norm, and tax benefits should be used to encourage a medical savings account for the non-emergency doctor visits…. which are then paid out of pocket via that account.

* Groups of small businesses, or self-employed individuals should be able to form associations that allow them to tap into group plans for more affordable access.

* Tort reform is necessary to eliminate medical practices that include waste merely for litigation prevention.

* Additionally, regulations need to be streamlined for private care, eliminating bureaucratic red tape that drives us costs unncessarily and increases paperwork.

* A central database for health records may be useful in streamlining costs… but this one is a nerve racking undertaking for privacy issues. Under no circumstances should various government departments have direct and easy access to this information, as HR 3200 grants. This should be information that only your network of doctors should be able to access, with exceptions for ER care.

* Eliminate this middle man crap… from nanny HMO’s to the mandate to insert a primary care doctor before you can go anywhere. If you need and ear, nose and throat specialist, there should be no reason you have to first pay a visit to your primary care doctor… *unless* he is an ear, nose and throat specialist.

* Negotiating the best prices for supplies and drugs should be as normal as apple pie… just like it’s done in the real world. But not with government price fixing.

* Rein Congressional spending in by streamlining the administrative costs for Medicare, and all associated (and unreported) costs. They need to spend less on paper, and more on those providing the actual service.

~~~

If we start with the above first, we can see were we are after some of these revisions take effect… all revenue neutral to the taxpayer. But there is no need for this race to single payer system.

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Health care is an enormous, complex problem. Were health care not “broken,” there would be no need to fix it. But health care is broken, in ways that lay people cannot begin to understand.

Mata has a very complex post. I commend her on the labor and scholarship which went into it. But there is so much in it which is misleading. The biggest problem is that she considers Medicare in a vacuum, and not in comparision with private health insurance.

Let’s start with this statement:

Speaking of Medicare beneficiaries:

They would never dream they were being short changed on newer, and better alternative treatments not on the Medicare pay list.

This is effectively “rationing.” And it goes on at a much greater level with private insurance than with Medicare. As I pointed out in another post, the process for getting new procedures approved by Medicare is much more accessible and transparent in the case of Medicare than in the case of private insurance. And there are often greater restrictions (with regard to payment for services) in the case of private insurance than in the case of Medicare. In the case of cancer care, there are no drugs or procedures of which I am aware which are more available with private insurance than with Medicare. Quite the contrary, in some situations. And Medicare doesn’t have the primary care “gatekeepers” which are a bane of private insurance. Mata says that you should be able to go straight to an ENT specialist if you have an ear problem; well, with Medicare, you can.

There are many other misleading, odious, and, most of all missing comparisons in Mata’s treatise.

One of the minor misleading claims is the assertion that the costs of Medicare administration are higher than claimed. But total Medicare costs are easy to determine. Medicare is administered by the Department of HHS and it has an overall budget. And it provides health care to a precisely known number of patients. You divide the total spending by the total number of patients, and you then add in the (known) cost of supplemental insurance and the (available from research) cost of out of pocket payments by the Medicare beneficiaries, and you have the total cost of the program. And it is considerably less than the comparable cost of health care paid for by purely private insurance.

And, as Mata does not dispute, overall satisfaction among Medicare beneficiaries is greater and personal bankruptcies are lower. And health care outcomes are unsurpassed. So you’ve got a better product for less overall money. It’s very simple.

Mata is horrified that the administration of a revised health care system would be consolidated under the executive branch, as opposed to Congress. As if Congress were capable of administering anything. The executive branch administers. Congress oversees. That’s our system, and it wasn’t invented by Obama.

Let’s do some comparing and contrasting which was not done by Mata and go on to discuss some of her more troubling assertions.

Availability of care. There is this concept that the primary metric for health care availability is the speed with which one can get an elective surgical operation or an MRI. Elective surgery is easy to get in this country, because it pays well and because we have a glut of surgeons. There is also a whole bunch of unnecessary surgery. I’ll give examples, but first let me tell you an area in which US health care ranks close to last:

Availability of health care at nights and on weekends. The number of lives lost and lives diminished because of the “take two aspirins and see me next Monday morning” reality of American health care has got to be enormous. If you are ever feeling slightly sick, run, don’t walk to an excellent health care provider early in the day, and, if the day happens to be Friday, take a Ferrari. Don’t take the chance of needing health care after 6 PM or on weekends or holidays. Add up nights, weekends, and holidays and that’s a huge amount of time (well more than half of the time, when Americans have little or no access to quality health care). We are close to being the worst in the world, with regard to this issue.

But we can console ourselves by the ready availability of elective surgery. We have a lot of surgeons, and they love to operate. Boston has more neurosurgeons than in all of the UK. The Harvard Medical school just discontinued its primary care program. No one wants to go into primary care any more. The real money to be made in American medicine is in providing technical procedures. And there’s an inherent conflict of interest, in that the same doctors who recommend procedures are usually the same doctors who do the procedures.

Here’s one example, from the cancer field (which I know best). There is a blood test used for the early detection of prostate cancer, called the “PSA test.” There has been a true epidemic of radical prostatectomies performed over the past decade, because of this test. Think of all the famous people who’ve had their prostates taken out, e.g. http://www.prostatecancer.info/blog/tag/celebrities/

The US now has the best prostate cancer survival in the world, along with the most prostatectomies. Why? Because prostate cancer is almost an inevitable part of aging, for a man. Most men over the age of 90 have prostate cancer, but relatively few die of it. I could well be incubating a few cancer cells in my prostate right now, but I’ve never had a PSA test and I have no plans of having one, despite its ready availability. My uncle, a urologist who’s done many prostatectomies himself, is the same way. Never had a PSA test done. No plans to have one done.

So, in the USA, we diagnose prostate cancer very early, mutilate huge numbers of men at huge profits to the surgeons and cost to the health care system, and overall harm (I would argue) to the people being screened.

If you diagnose and treat very early, then your statistics will be better than if you diagnose and treat late. This is because early diagnosis uncovers lots of people who don’t ever need to be treated, because their underlying disease would grow so slowly that it would never cause them to have a problem with it. Late treatment statistics will be worse, because more of the patients being treated actually do have life threatening disease.

Here’s a very important (European) study (published in the New England Journal of Medicine), which illustrates how Americans are duped into having all sorts of procedures that they don’t need or benefit from. If anyone else has a favorite medical procedure they’d like to discuss (e.g. angioplasty, which was recently extolled on this blog by someone), just chime in and let’s discuss it.

But I want to discuss the European prostate study, which is a very useful model:

http://content.nejm.org/cgi/content/full/NEJMoa0810084

Basically, this was a trial which randomized people to PSA screening or no PSA screening. It was ostensibly a “positive” study, in that the death rate from prostate cancer was reduced by 20% in the group which was screened.

Here’s a scenario, which I think is pretty common: Let’s say you are a 60 year old man, having a little trouble with your love life. So you go to see a urologist, who prescribes Viagra but also orders a PSA test, telling you that this will reduce your chances of dying from prostate cancer by 20%. Would you go along with having him order the test? I wouldn’t, and neither would my urologist uncle. But most people would go along. And then the test comes back “positive” (PSA elevated). So the urologist then does a needle biopsy and may diagnose prostate cancer and recommends a radical prostatectomy (perhaps done with a new, state of the art da Vinci robotic machine) and he pronounces you cured. Are you happy?

Let’s look more closely at the numbers:

The rate ratio for death from prostate cancer in the screening group, as compared with the control group, was 0.80 (95% confidence interval [CI], 0.65 to 0.98; adjusted P=0.04). The absolute risk difference was 0.71 death per 1000 men. This means that 1410 men would need to be screened and 48 additional cases of prostate cancer would need to be treated to prevent one death from prostate cancer.

Would I get tested for the probability of reducing my risk of death from prostate cancer by less than 1/1000th?

Now, would I get my prostate hacked out to have a one in 48 chance that this would prevent me from dying of prostate cancer? No. Frankly no. Not considering the pain and complications of prostatectomy. Urinary incontinence. Real, big time (as in permanent) “ED.” etc.

The point of this illustration is that more procedures or faster access to procedures doesn’t necessarily translate into much more than more expense and more pain and more morbidity, for little in the way of gain. On the other hand, access to quality health care by excellent medical professionals at night and on weekends has a far greater impact on health care outcomes than faster access to elective and non-emergent procedures.

When I rotated through orthopedic surgery at the University of Michigan, the Chairman of the Department was leading a case presentation conference, in which they were discussing the pros and cons of a knee replacement for a certain patient. The esteemed surgeon made a statement which I’ve never forgotten: “surgery is for other people,” meaning that surgeons are much quicker to recommend surgery for others than to wish it for themselves, in a considerable number of instances.

What is important are overall health care outcomes, such as overall survival, from all diseases, injuries, and maladies. And on these metrics, US health care ranks way down the list.

Mata makes the statement that doctors can’t take care of Medicare patients (on a fee for service basis) for two years after they doctors have opted out of Medicare. That’s funny. I opted out of Medicare, effective July 1, 2008, and I started providing services (on a fee for service basis, paid for by the patients themselves or by some type of supplemental insurance) as of July 2, 2008.

As far as seniors not wanting to see health care reform, that’s simply because they love the status quo, which is Medicare. They are afraid that any major health care reform would change Medicare. That’s a legitimate concern. Seniors are a very privileged class of people. They have the best health care the USA has to offer and it personally costs them very little. They have nowhere to go but down, and they don’t want anyone messing with a system which they know and love. The want to protect their monopoly on quality, affordable, non-bankrupting health care.

But what about the rest of us?

Mata’s post was very long. I’m sure that she didn’t create it in only a couple of hours, and I can’t answer it all in only a couple of hours, and I have to go to work this morning (being one of a small number of doctors who regularly works on Saturday). But there is so much in Mata’s post which is grist for critical analysis. I asked her to put it all out there, in a single post, and I give her credit for doing so. I’ll come back to this post, repeatedly, over time, in the month of August. I’m going to focus on just addressing the issues discussed in Mata’s post. I’ll never get through them all if I start getting sidetracked by side discussions with the legions of Flopping Aces critics who will predictably descend upon me, en mass, like mosquitoes in a swamp (that was a :), by the way).

I am looking forward to a most excellent discussion.

As the third (and final) installment in my shameless self-promotion campaign, I want again to plug my talk radio interview, taking place tomorrow (Sunday):

I’ll be doing a one hour talk radio show this Sunday, beginning at 8 AM Pacific (11 AM Eastern) on WCBM (AM) in Baltimore. Typical talk radio, with listener call ins. There will be a live stream (see link below). Post-show, it will be available via podcast.

http://www.wcbm.com/

I’ll be talking about cancer in general and our lab tests in particular. I’m fairly outspoken about “cancer in general,” and it should generate a little bit of heat, which is the mother’s milk of talk radio.

– Larry Weisenthal/Huntington Beach, CA

Larry,

Pesky “mosquito” reporting in.

In all of the discussions here on these pages regarding Medicare, Medicaid (MM), et al, I haven’t seen you address the seizure of assets when it comes to the estates of deceased recipients.

I would think that would be a MAJOR issue in calculating costs etc. when looking at those plans.

Here’s what I mean:

Citizen Doe pays X dollars of taxes/premiums into the system during 40 years of working then, after retirement, he gets old and sick (let’s say a stroke). Doe has repeated hospital stays ultimately resulting in placement in a nursing facility.

Over the course of treatment, hospitalization, and nursing home, the gov’t (MM) pays out $40K for care (random figures).

After two years, Doe dies.

The gov’t (MM) then turns around and places a $40K lien against Does’ estate or seizes that dollar amount in assets from the estate.

Basically Doe, the patient/deceased paid in for all of those years for a negative $ net benefit because not only was he required to pay taxes into the system, the $40K in benefits is then siphoned out of his estate.

The gov’t (MM), on the other hand, makes out with a “profit” for tax/premium $ paid in because they collected the taxes etc, paid out for the care, then siphoned the care dollars back out.

I would guess that those practices by the gov’t (MM) is one reason why “estate planning” (asset shifting/concealment) is such an active profession.

vawatchdog.org
07-13-2009

Two tours in Vietnam.

A Purple Heart.

A welding accident.

A wheelchair.

Death at 61.

A bill for $277,186.96.

Two months after Roger Lennon died, the woman who took care of him for more than a dozen years got a bill in the mail. The state of Iowa said the Bettendorf veteran owes almost $300,000 for the medical care he received in the state-run veterans home.

The spokesman for the Iowa Department of Human Services, which runs Medicaid for the state, said Lennon should have known the state would pursue any remaining assets after his death.

“Everybody who gets Medicaid is told this is a government program for which we will be expecting repayment,” DHS spokesman Roger Munns said. “It’s not fair for taxpayers – you and me – to pay if there are assets.

When Lennon lived – off and on – at the Veterans Home in Marshalltown, whatever money he made went to the state. He turned over his half of the rental income, $350, along with his veteran’s benefits to the home in Marshalltown.

The letter from DHS, indicating a debt of $277,186.96 begins, “We have been informed of the death of the above person, and we wish to express our sincere condolences.”

The third paragraph, highlighted in bold, states, “This debt must be, and can only be, paid from anything that the individual owned or had an interest in at the time of death.”

Mata, this gentleman steps into the fray and is making the claim that the CBO figures are off and wait til you see why, also links to their website.

Health Systems Innovations
http://www.hsinetwork.com/

From the article:

We believe that the Democratic bills currently under consideration in the House and Senate would cost $2.1 trillion and $2.4 trillion, respectively—much higher than CBO’s figures.

Like the Urban Institute, we estimate that roughly 40 million people would make the shift. CBO seems to assume, however, that large employers would use the public plan only sparingly and that only 11 million people would move from private to public insurance—which would, of course, result in lower costs.

Why the difference in these estimates? We believe that we have better data on this issue than the CBO, which uses simulation models of health-insurance plans based on much older health-plan data—typically from 2001 or even 2000. Our estimates are grounded in 2006 commercial-insurance data to which the CBO doesn’t have access (the data are not publicly available and the CBO didn’t make provisions to purchase them).

Sheesh!

Stephen T. Parente is a principal of HSI Network LLC as well as the director of the Medical Industry Leadership Institute and an associate professor in the finance department at the Carlson School of Management at the University of Minnesota. He was a volunteer health-policy adviser for John McCain in 2008.

http://city-journal.com/2009/eon0805sp.html

I’m stuck in the filter. P&T

@mata: I haven’t yet had the opportunity to get back to your comprehensive analysis in the original blogpost or to your follow-up points (#7). I’ll so do in the hopefully near future.

In the meantime, I’d like to give you a short homework assignment, if you are willing.

The following (from the Dallas News online edition) is a very nice “executive summary” comparison of US versus French health care systems. I’d like to ask you to read this, just for some additional background information. Perhaps this can come into the discussion, down the road:

http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/051709dnbusfrance.40cc221.html

– Larry Weisenthal/Huntington Beach, CA

Mata!!

Check your e-mail.

@Mata: Speaking as someone who has a 95 y.o. father who also lives in South Florida and who just recently lost his mother, I’d like to wish you a safe and fulfilling journey on your trip to visit your Dad.

Here’s what I’ll do. I’ll work on my replies to your two thoughtful posts on this thread, only I won’t post them until you get back and get caught up and let me know when you’ve got the time to read and consider them. It wouldn’t be fair to post my replies when you are unable to offer rejoinders. Can you send me an email and let me know when you are back and have the time? runnswim@aol.com

Since I know that you are severely disappointed over missing my interview, I’m happy to let you know that WCBM-AM maintains a podcast archive — the interview should be up in a day or so, although it is not yet up:

http://www.marchantmedia.net/wcbm/podcasting.html

Scroll down to the “Prescription for Health” segment and click on August 9, 2nd Hour.

– Larry Weisenthal/Huntington Beach, CA

Larry, did you here about Obama’s deal with Big Pharma? He’s promising not to strong arm them into lowering prices if they’ll support his healtcare scam.

Website link formatted per your request:

How the White House’s Deal With Big Pharma Undermines Democracy

~Snip~
White House confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. /Snip

The author ends the article:

We’re on a precarious road — and wherever it leads, it’s not toward democracy.

And the author of this slander against Obama….Robert Reich. Never in my wildest dreams would I have believed I would be agreeing with Robert Reich about anything. The world has gone mad.

I have sent this article to flag@whitehouse.gov