How Smart is Ezra Klein ? II
Ezra Klein explains that Medicare can’t cut payments too much or doctors will opt out
The problem is that Medicare can’t control costs too much better than private insurers or, as you see from the article above, doctors will simply abandon Medicare.
Klein seems oddly indifferent to the detailed text of the Afordable Care Act. I never would have guessed that I would ever type that. Medicare is four programs which are differently squeezable. Plan C (take advantage of Medicare) can be squeezed to death with relatively low costs to anyone but insurance companiies. Plan B can’t be squeezed easily. Doctors can and do refuse deal with the CMS. Plan A can be squeezed as I argued here and here.
Now his conclusion is that Medicare fees can be restrained, but he neglected the fact that the recent health care reform was designed with the problem of doctors with office practices opting out in mind. Matthew Yglesias (another very smart guy) excerpted the silly part of Klein’s post.
I blame myself. I wrote a post about how Klein is very smart and so he decided to write a dumb post just to spite me.
I recap the argument after the jump.
A half hour of googling once, convinced me that at most one hospital ever opted out of Medicare plan A That hospital is not named in something someone wrote on the web 10 years ago but it is obviously the Mayo Clinic. I’m pretty sure that either this was someone confused at the time (by Mayo Clinic staff making excuses for not admitting her) or that it is no longer true.
Many doctors with office practices can keep busy while refusing to see Medicare patients. 0 to 1 hospitals can. Almost any hospital (with one possible exception) which opts out of Medicare will lose a large fraction of its cash flow from one day to the next. I’d guess that it is at least a third for all hospitals (except maybe the Mayo Clinic) and usually more than half. In theory a hospital could gain by doing so by firing half it’s staff and renting out spare rooms as apartments. In the real world, it isn’t going to happen.
That’s why the ACA squeezes Medicare Plan A not Medicare Plan B. The restrictions on the growth of fees are restrictions on payments to hospitals, nursing homes and home health care agencies. The idea is that they won’t opt out.
In contrast payments to office practices for ambulatory care will not be squeezed by the ACA. Obama administration officals and congrespersons (or their staffs at least) understood that to squeeze doctors with office practices, they would have to mandate participation in Medicare.
Klein is a young blogger-turned-pseudojournalist who somehow has gotten credibility with the left as an expert in health care. In fact he is mostly an expert in writing what the left wants to hear about health care.
I believe you are missing the effect on specialist pay. If you dont have docs performing those procedures, hospitals will still get hit. Though, TBH, not that many of us can really afford to completely give up Medicare.
Mr. Klein is an expert in his own mind.
Steve the point is that the Affordable Care Act will *not* affect specialist’s pay. Click the second link. The key point is that health care reformers understand that they can’t squeeze doctors any more, so they decided to pay for Medicare expansion and subsidies by squeezing Hospitals, Nursing Homes and Home Health Care agencies (and also by raising taxes and eliminating the absurd Medicare Advantage extra 14% per patient).
The idea is that health care providers other than doctors had better get more productive or earn less. But they knew that they can’t just cut the fees they pay without driving doctors away and the sure can’t force doctors to participate in Medicare (no one messes with the AMA).
I think that Ezra Klein is extremely expert and smart. I consider him to be one of the best journalists in the USA. On the other hand, who cares what I think ?
Robert, not to sound flippant, but i care what you have to say, otherwise I wouldn’t have AB as first read each morning.
I think it is too early to predict just who and what will be impacted by PPACA.
Productivity increases (where possible) may or may not help providers.
The power of the AMA is overrated.
Klein is an excellent and engaging writier, which does not necessarily equate to an excellent journalist IMHO.
I care what you think.
I like what you write also.
To the main point. Doctors ARE already leaving Medicare and the other Gov Health Care programs. ObamaCare doesn’t change that fact. You will not find the top GP, practices, or specialists in Fairfax County (northern Virgina outside DC) who will take Medicare. As one explained it to me – “I lose money on Medicare or Tricare patients.” So he and his practice would not take my family. Nore would anyone else. I had to drive 40 minutes into Maryland (to Bethesda) to get medical care for the family.
If you live in west Texas – yes all the Docs will take it. But in high cost of living areas all the above average doctors won’t take Gov health care. Why should they? There are plenty of people who have insurance that actually pays the going rate.
Islam will change
Robert, this raises a question I tried googling unsuccessfully the other day, sort of a baseline I was trying to figure out:
What percent of health costs, or medicare payments, are for inpatient versus outpatient services?
The “let people shop” theory might make sense for outpatient, but is anybody who’s in hospital going to shop for the best deal on xrays?
People might shop for hospitals some, and the current “trade secret” approach to prices is a problem there. But that’s slightly tangential to my main question.
Are there “plenty of people who have insurance” that are over 65 – i.e. eligible for Medicare? I doubt it. I’m 62 and my former employer will boot me from retiree health coverage at 65 and force me onto Medicare. In my experience this is typical – for the dwindling number of employers that even offer retiree health care benefits. Opting out of Medicare by doctors essentially means they only practice medicine on people under 65 [or the rich]. But few people are rich and everyone eventually gets to be 65 – or dies first. What does the mass of the public that seems to clamoring against “socialized medicine” and for fiscal austerity actually expect that they’re going to do when they hit that magic number and find that they can’t get health care? It seems everyone in this country is in denial.
Is the real healthcare issue a matter of the cost of the individual procedures or the number of procedures performed. Do we need cheaper medicine or just less/more-effective medicine.
Of course either way the industry (doctors and/or hospitals) are going to have less revenue, Eventually someone is going to get less of America’s money.
Very good point about people “shopping” ! When I broke my leg last year, I didn’t realize that the closest emergency room (the city’s general hospital) was not “in-network” for my health insurance plan.
Getting back to Steve’s point, the X-rays, surgery and overnight recovery had to be performed at the same facility — it’s not as though I could have x-rays performed at a cheaper location nor be moved after surgery to a hospital room at a cheaper hospital. Nor could I comparison shop for the various medicines, crutches, surgical cast, etc. Furthermore, how many people realistically would go to a completely different doctor/hospital for the several months of follow-up care ? Comparison shopping is not a viable solution for reducing healthcare costs.
[Bonus tip — check your insurance plan to figure out the closest “in-network” emergency room to your home & workplace — your iPhone might not allow you to consult the plan while you’re waiting for the ambulance !]
There are more than enough under 65 full paying people/families in high cost of living areas to keep the best doctors from messing with the plebs. And there are always more coming and the rich retirees will pay full frieght with supplements and cash.
The country is in denial if anyone think Joe Blow medicare patient gets the same medical care as a Gates or a Kennedy. Or even you more typical mid-six figure lawyer.
And Obamacare will not change that one bit.
Islam will change