Does A Very Strange Distribution Lead to a Sacrifice in the Hope of a More Interesting Endgame?
Brad DeLong notes an experiment subject (as is the wont of the Obama Administration to date) to regulatory capture:
In a surprising move, the Obama administration will extend special bonus payments meant to reward top-performing Medicare Advantage insurers to those that score only average ratings….The law says bonuses, which start in 2012, would go to insurers that scored at least four out of five “stars” on a set of quality measurements. Instead, a “demonstration project” authorized by Medicare officials will extend bonus payments to plans that score at least three stars. Based on this year’s star ratings, the change means 62 percent of all Medicare Advantage insurers…will qualify for the quality bonuses, compared with only 14 percent of plans under the health law provisions.
If those figures are accurate, then 48% (62-14) of all M.A. insurers are judged to provide “average” (three star) quality.
Perhaps more importantly, 38% (100-62) are judged to be substandard. (The good news is that those M.A. insurers have only 16% of the market. The bad news is that they have 16% of the market.)
In the optimistic version, the new structure facilitates culling the worst of the herd while not damaging that plurality of users who are receiving “average” care.
The pessimistic version is to suspect that those 16% who receive substandard care are in non-competitive markets, and will therefore end up, for the next three years, paying more for the privilege of being ill-served and then receive only marginal benefit from the HIEs.
I’m uncertain whether Dr. DeLong is a pessimist, or is just looking at the additional short-term spending and ignoring that the endgame is to have quality providers in the HIE, and punishing the bulk of the market for the ills of the few this early will make improvements later on less effective.
Then again, I’m uncertain whether I should trust that the Administration knows what it’s doing on its Signature Issue. Which is, as Digby noted in another context, rather more the problem for that Administration.
Administrative incompetence is becoming a hallmark of the Obama administration.
You seem to identify medicare advantage with “HIE” by which I assume you mean health insurance exchanges. These are not related programs. Medicare advantage is a program for people over 65. HIE’s are for people under 65. Eliminating medicare advantage means replacing it with plain old medicare. It is not true that if firms which can’t offer medicare advantage programs they won’t offer health insurance to people under 65. Medicare advantage is a relatively new program. For decades all people over 65 got single payer medicare from the CMS and private companies provided health insurance to most people under 65.
DeLong’s view is that medicare advantage is an absurd waste of money and that the waste of money should be stopped immediately by paying medicare advantage providers the cost of providing plain medicare to a patient and no more. He objects to a program which costs more. I’m sure he objects to the exception that any medicare advantage plans can be judged excellent and paid more than the CMS costs. The fact that excellent is redefined to average is just making a costly wasteful program more costly.
In any case, I don’t see any connection between medicare advantage and Health Insurance Exchanges. I must be missing something. What ?
Rusty the ARRA spending showed both extraordinary administrative competence and the fact that administrative competence doesn’t make up for a program which is less than half the proper size. If your comment means anything, it means that the Obama administration is less competent than other administrations (what does “hallmark” mean to you ?). Which other administrations ? What administration has shown more administrative competence.
Actually for it to be the hallmark it would have to be that *all* other adminsitrations are more competent. What makes you so sure that the Bush adminstration was markedly more competent than the Obama administration ?
If I am misinterpreting your use of the word “hallmark” please point me to another interpretation and an independent source of a definition of the word you chose to use which definition doesn’t imply that your comment is absolutely false.