Wednesday, January 23, 2013

On Health Care Spending: A Trillion Here, A Trillion There
A billion here, a billion there.  Pretty soon, you’re talking about real money.
Everett McKinley Dirksen (1896-1969), attributed
January 23, 2012 -  Another name for this post might be ,”Everett Dirksen Updated.” Senator Dirksen was telling us  billions of dollars of government spending was real money. He was reminding us money spent from top-down Washington  sooner or later had to be extracted from taxpayers, now about  $50,000 of future debt for every man, woman, and child.  The only difference between then, when Dirksen made his statement, and now, and 2024,  when the Congressional Business Office tells us Obamacare will have cost us $2.6 trillion, is that billions of dollars  have become trillions.  Future taxpayers will have to pay back these trillions out of their incomes,  which will be  in the thousands
Never mind,  said President Obama in his second inaugural address, the trillions are worth it.
“The commitments we make to each other - through Medicare, and Medicaid, and Social Security - these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.”
When one accounts for inflation,  I suppose Obama may be right.  Anyway, the trillions will not become due until after he leaves office in 2016, so why should he worry.
But in present,  three  recent Op-Eds cause me to wonder.
·         Christopher Conover,  “ Nate Silver Gets It! Health Care Drives Increase in Government Spending,” Forbes, January 17, “CBO Projects Spending on Health Care will account for the entire increase in the size of Government.”

·         Greg Scandlen, “The HIT Scam,”  in Our Money, Our Health, Our Choice,” writes, “Last week John Goodman posted a brief blurb about the latest problems with Health Information Technology (HIT). The issue deserves a little more attention because it is an abject lesson of how health policy always fails these days.The articles from the New York Times and the RAND Corporation indicate that HIT has not lived up to expectations. Actually, it is quite a bit worse than that. The RAND piece is a sort of mea culpa for an earlier RAND "study" that predicted $81 billion in annual savings if we adopted HIT (the version I have said $77 billion, but what's $4 billion between friends?) This RAND piece was the main rationale for spending over $20 billion (in two years) on HIT, but rather than saving money, HIT seems to have cost more money because it made it easier to bill for more services, according to the Times. It may also be creating more errors and inefficiencies in medical practice."

·         Scott Gottlieb, MD. “Obamacare Sticker Shock Is Coming, “Forbes, January 23,  " A California insurance broker, who sells health plans to individuals and small businesses, told me that she’s prepping her clients for a sticker shock. Her local carriers are hinting to her that premiums may triple this fall, when the plans unveil how they’ll billet the full brunt of Obamacare’s new regulations and mandates. California is hardly alone. Around the country, insurers are fixing to raise rates by double digits. They’re privately briefing politicians in Washington on what’s in store.

But policy makers will not fret.   These comments will not bother President Obama or the Washington elite. They can always blame those greedy health plans and greedy doctors.  Besides, they will never mention or allow any talk about Medicare or Medicaid “cuts” or modifications. For them,  it’s profligate government spending – or bust!

Of the doctors, says Doctor Gottlieb,” To try and get a handle on rising costs, the Obama Administration will start to go after the healthcare providers. The President seemed to hint about all this when he referenced the need to 'lower the cost' of healthcare in his inaugural address. Simply cutting payment rates has consequences, or course. It reduces reimbursement without regard to value or need. But indiscriminate cuts to fixed rate schedules for everything from doctor visits to hospital stays are Washington’s standard approach for sanding down Medicare costs. The Affordable Care Act will institutionalize these same political tactics across the rest of the healthcare market. This is the next iteration of healthcare reform. Call it Obamacare 2.0. Doctors will become the next bogyman in Washington. The target is already being fixed to their hide. As for the rest of us, our health insurance will become increasingly illusory."

Tweet: Washington health care spending is out of control, and talk of its main cause, Medicare and Medicaid entitlements, is verboten among the cognesenti.

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