Tuesday, July 3, 2012

Brooks trousers down in flames

A lot of really smart people have been out to toss their pies in the face of David Brooks for his explanation of how the Republicans really do have a plan for replacing Obamacare, but there's still more to be said, believe it or not!
Flying penguins. From Wikipedia.
Namely, all these people are rushing out to trash the imaginary Republican plan, with good reason, and you should definitely click those links. But what he has to say about the Affordable Care Act is pretty goofy too.
In the first place, the law centralizes power. Representative Tom Price, a Republican of Georgia, counted 159 new federal offices, boards and councils, though nonpartisan researchers have had trouble reaching an exact tally. [jump]

 How exactly does it centralize power to spread it around 159 different entities? Like this?
26.     Medicare value-based purchasing program (Section 3001(a), p. 613)
27.     Medicare value-based purchasing demonstration program for critical access hospitals (Section 3001(b), p. 637)
28.     Medicare value-based purchasing program for skilled nursing facilities (Section 3006(a), p. 666)
29.     Medicare value-based purchasing program for home health agencies (Section 3006(b), p. 668)
.....
80.     Grant program to promote geriatric education centers (Section 5305, p. 1334)
81.     Grant program to promote health professionals entering geriatrics (Section 5305, p. 1339)
82.     Grant program to promote training in mental and behavioral health (Section 5306, p. 1344)
83.     Grant program to promote nurse retention programs (Section 5309, p. 1354)
84.     Student loan forgiveness for nursing school faculty (Section 5311(b), p. 1360)
85.     Grant program to promote positive health behaviors and outcomes (Section 5313, p. 1364)
Looks like a conspiracy to divide power up into the smallest possible packages!

But Brooksie says all this complexity will
inevitably produce unintended consequences. The most commonly discussed perverse result is that millions of Americans will lose their current health insurance.
A report by the House Ways and Means Committee found that 71 of the Fortune 100 companies have an incentive to drop coverage. But nobody really knows what’s going to happen.
Well, that sounds pretty scary. How did they work it out?
Today, in a new report prepared for Ways and Means Committee Chairman Dave Camp (R-MI), data from America’s Fortune 100 companies show they could save hundreds of millions of dollars a year under the new health care law by simply terminating health insurance for their workers and dumping these employees into taxpayer-funded health care exchanges....
Based on an aggregation of the data received, if the 71 Fortune 100 companies that replied to the survey ceased to offer health care coverage and paid the employer mandate penalty, they could save a total of:

  • $28.6 billion in 2014 (an average savings of over $400 million per company) and
  • $422.4 billion from 2014-2023 (an average savings of nearly $6 billion per company).
So that's how. The old correct but totally irrelevant arithmetic ploy. Just note that the 71 companies could save tons more money than that even, if instead of waiting for 2014 they would just cut off the employees' health insurance right now—they wouldn't have to pay that pesky penalty-tax. Why don't they do it? Oh, I know—it's because all of their employees would quit. Stuff like that makes even a CEO think twice.*

But what about those who don't work for the Fortune 100?
A Congressional Budget Office study this year estimated that 20 million could lose coverage under the law or perhaps 3 million could gain employer coverage. Or the number could be inside or outside the range.
True! But with a couple of details left out:
Under CBO's best estimate, 11 million mostly low-wage workers would lose their employer coverage. About 3 million would choose to drop their coverage to go into the new subsidized health exchanges or on Medicaid, while another 9 million would gain employer-sponsored coverage, for a net total of 5 million people losing employer coverage in 2019....
And if it's a net 20 million losing employer coverage they will still go into the exchange or on Medicaid. Either way, it's only employer coverage, they don't get uninsured altogether:  the number of uninsured workers keeps getting smaller. Brooks knows this, too, as you can tell by the weasel phrasing: "20 million could lose coverage under the law or perhaps 3 million could gain employer coverage." With the word "employer" placed where you won't notice it. He must be running for Romney speechwriter.
*Also, they won't be able to dump them into the exchanges because those are only available to individuals, families, and small businesses.
Gentoo penguins. From National Geographic.
There are other possible perverse effects. According to a report from the Department of Health and Human Services, over the next 75 years Medicare payment rates for inpatient hospital services would steadily fall from around 67 percent of private insurance payment rates to an implausibly low 39 percent. Doctors would either flee the program in droves or Congress would override the law, exploding the costs.
True again, under certain assumptions. The first thing to notice is that this has nothing whatever to do with the Affordable Care Act; the decreases in payment rates relative to private insurance rates belong to the Sustainable Growth Rate system,
which was enacted as part of the Balanced Budget Act of 1997... to limit growth in spending on physician services to a sustainable rate, roughly in line with the rate of overall economic growth. (Alternative scenario: 2)
Remember? That's back when ol' whatsisname was president, and Newt Gingrich was—uh—Prime Minister? And the other thing about these cuts is that they have never yet, in the 15 years that they have been the law of the land, been implemented; Congress always cancels them, year by year—that's the "Doc Fix" you've heard tell about. It's just not going to happen. And Brooks knows that too.
Another report from the department suggests there could be 84 million Americans on Medicaid, an astounding burden on that already stretched system.
Well, duh. That's why the funding under ACA goes up, because Medicaid will insure a lot more people (most of them currently without insurance). And 84 million isn't exactly astounding when you note that it's already over 62 million. It's just astounding when you announce it without any context.
The law threatens to do all this without even fixing the underlying structures that make the American health care system so inefficient. It fails to fix the fee-for-service system that rewards people for the volume of services provided. It fails to fix the employer tax exemption that hides costs and encourages overspending.
To the degree that the tax exclusion does contribute to higher costs, the ACA does do something about it, by putting a tax on those "Cadillac" plans, the ones that contribute the most. And if it doesn't exactly get rid of the fee-for-service model, it does some alternatives, like

  • Payment innovations including greater reimbursement for preventive care services and patient-centered primary care; bundled payments for hospital, physician, and other services provided for a single episode of care; shared savings approaches or capitation payments that reward accountable provider groups that assume responsibility for the continuum of a patient’s care; and pay-for-performance incentives for Medicare providers
  • An Independent Payment Advisory Board with the authority to make recommendations that reduce cost growth and improve quality in both the Medicare program and the health system as a whole
  • A new Innovation Center within the Centers for Medicare and Medicaid Services, or CMS, charged with streamlining the testing of demonstration and pilot projects in Medicare and rapidly expanding successful models across the program
  • Profiling medical care providers on the basis of cost and quality and making that data available to consumers and insurance plans, and providing relatively low-quality, high-cost providers with financial incentives to improve their care
  • Increased funding for comparative effectiveness research
  • Increased emphasis on wellness and prevention
Penguin rally. From Doubtful Company.
And what does a Republican plan do? Oh, I remember—tax credit vouchers. You save enough money to buy a policy for cash, and then at refund time the government gives some of it back. It'll be like school vouchers, too, mark my words—the only policy most of us will be able to afford will be parochial insurance, sold by Father Mike down at the Immaculate Conception, with special perks like a Frequent Bingo card (every tenth game free) and indulgences (49 days off Purgatory if you pay in full now). Indeed, perhaps that's what they have in mind.

(Cross-posted at Daily Kos.)

2 comments:

  1. Its seems that Brooks trousers are down in flames. I think that he has to do something about the problem that he had made. I know that many people are against his plan and he should do something about it.

    ReplyDelete
    Replies
    1. I guess you have a point there. Thanks for writing!

      Delete