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June 29, 2010

The Social Security and Medicare Trustees’ reports normally due in April were delayed this year due to the passage of the healthcare reform bill. They were supposed to be published tomorrow.

  1. When do you think they will be published?
  2. If you don’t think we’ll have them tomorrow, when do you think we will have them?
  3. What do you think they will say?

I don’t think we’ll see it tomorrow. I have no idea when we will see it but I suspect it will wait until there is some offsetting good news to report. I think it’s going to say that for both Social Security and Medicare outlays have exceeded income this year and that actuarial insolvency will occur in both plans much sooner than had been anticipated. Social Security outlays weren’t supposed to exceed revenues for five years but I suspect that recession has driven revenues done to the point that this milestone has been reached early.

8 comments… add one
  • Steve Verdon Link

    Hmmm, I fear you maybe right. If it is true then the fiscal picture has just gotten alot gloomier, IMO. Worst case scenarios, we start to look like Greece to the rest of the world.

  • Steve Verdon Link

    Oh yeah, and so much for the transparency Obama promised us.

  • Dave Schuler Link

    I can’t really fault them for delaying the report from its original April date. It would have been meaningless because of healthcare reform.

    There may even be problems with the report now. Do you include or exclude the “doc fix”? I would say you have to exclude it but, once again, that means the report is pretty meaningless.

  • steve Link

    I liked Frakt’s general recommendations on the “doc fix”. The weakness in his plan is assuming that financial incentives are sufficient to change overutilization. Much of that comes from practice style. A massive education campaign might be more effective.

    http://www.kaiserhealthnews.org/Columns/2010/June/062810Frakt.aspx

    Steve

  • Steve Verdon Link

    From your link steve,

    The mechanism that governs the growth rate of Medicare spending on physician services isn’t working. The Sustainable Growth Rate put in place in 1997 is supposed to keep total Medicare physician costs from growing faster than the overall economy. When costs do grow too quickly–and they always do–the law demands that prices be cut commensurately.

    But it doesn’t work. The SGR target is too low. Medical inflation is perennially above the growth rate of the economy. So Congress always overrides those mandated cuts, and the gap between spending dictated by the SGR and actual spending grows. Most recently it stood at 21 percent.

    Ahhh the economic and political naivete…..

    See, look right there. We gave government discretion and low and behold they blew it. Not once, not twice, but every single freaking year since 1997. Where is the “balance”? How about this, make it rule not a guide. If there is a discrepancy the price cuts take place and need a super-majority to over-ride…like say 75% of Senators and Representatives.

    Will we get that? No. No politician likes giving up power. So, can we find the balance? No. Will we “solve the problem”? No. But people will go on looking to government for the solution and giving them more and more power in the hopes of getting a solution.

    What should Congress seek in exchange for scrapping the SGR methodology? At the top of my list would be to base some of physician payment on quality improvement. Aligning payment incentives with quality and not quantity will strike at the heart of the cost growth problem. Also high on the list should be reducing payments to specialists and increasing those for primary care physicians.

    Specialists are responsible for hundreds of billions of dollars of unnecessary care annually and primary care doctors are predicted to be in short supply as more Americans obtain coverage under the new health reform law. Finally, payments should be adjusted to account for geographic variation in costs that are reasonable and related to appropriate care.

    Is this like the idea of jobs saved?

    lol…to live in a fantasy land….

  • Dave Schuler Link

    In my view Frakt misunderstands the role of Medicare spending. I believe that Medicare spending functions as a price support. Of course it’s lower than the prevailing non-Medicare price. That’s how a support price functions. My evidence for this role is how few physicians actually refuse Medicare patients. Despite how we’re constantly being warned about how dire the situation is only about 15% refuse Medicare patients. If it functioned the way Frakt thinks, 85% would refuse Medicare patients.

  • steve Link

    First, there are motivations other than economic ones for physicians. Next, when economics does dominate, those who can get only private patients are probably already doing so. There just are not enough of them. If 85% of docs refused Medicare, 70% of docs would do nothing (exact number unclear, just an estimate.) It is unclear to me why then insurance companies pay 20% more for the same procedures on what are usually healthier patients. One percent should be enough.

    If it does act as a price support, then cutting payments should be even more important. In a democracy, things don’t change until there is a need to change. From 1997 to 2008, deficits were not a focus like they are now. We just borrowed more money. There is finally some recognition that this needs to stop. Importantly, this will be a two sided negotiation. Physicians do not want a sudden big cut. It should be politically feasible to enact some of the solutions like shifting pay from specialists to primary care.

    Steve

  • jeck Link

    I agree with Steve, this evidenced by recent works in this area

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