Tale of Two Charts: Medicare 2009 and 2015
Update: some guy named Krugman suggests that I am not totally off base here. The Disappearing Entitlements Crisis I hear he has an audience.
Update two: Social; Security Defender Archive docs and spreadsheets
Update(From main Angry Bear page you may need to click ‘Read More’ to see Charts)
2009: Medicare Unsustainable. From less than 4% of GDP heading straight for 11%.
2015: Medicare You Decide. Still less than 4% of GDP heading for 6%
Why is JEB still having the same conversation about viability of the program?
Ten years ago I would have earnestly told you that we didn’t have an ‘Entitlements Crisis’, we had a ‘Health Care Crisis’ that was reflected in the Medicare numbers. Today? I am not seeing ‘Crisis’ at all. And certainly no ‘Crowding Out’, no ‘Intergenerational Warfare’. The Social Security and Medicare population are projected to increase from around 16% of the population now to 25% in the next few decades. And the amount of GDP we will need to devote to their income and medical care will go up proportionally. What’s the alternative? Starving gramma and denying her pills?
Update: some guy named Krugman suggests that I am not totally off base here. The Disappearing Entitlements Crisis I hear he has an audience.
First, there is the tired (but true) old response that per capita economic growth will pay for all the above and 3D surround smelivision too.
Second, is the vision of America’s new rust proof, export proof, evenly spread to every state, robot resistant industry: taking care of me! By 2034 I project I will be 90 years old and much more tethered to my local group of medical doctors and treatment modalities than I am even now. Look at a recently collected sample from Medical News Today of what’s on the shelf lately or soon to be.
Sovaldi: Hepatitis C can be wiped out for $300 billion (that’s a “b”) — the same amount we now pay for all other prescriptions. Cost to manufacture: half a billion dollars.
Now comes: “Amgen scores a victory for PCSK9, halving cardio risks after one year”
” … new [cholesterol] drugs could eventually add as much as $150 billion to the national health-care bill.” http://www.fiercebiotech.com/story/amgen-scores-victory-pcsk9-halving-cardio-risks-after-one-year/2015-03-15
HOW MUCH WILL WE PAY TO CURE THE INCURABLE?
“Of the 2,644 patients, eight exhibited signs of dementia. Two were younger than 65, five were aged from 65-74 and one was aged between 75-84.”
“for the first time in human subjects, our notion that calcineurin inhibition has a protective effect on the development and possible progression and even reversal of Alzheimer’s disease,” http://www.medicalnewstoday.com/articles/295047.php
C-Pulse – a cuff that wraps around the aorta and pumps blood from the heart around the body – has proved effective in reversing [formerly incurable] heart failure, even in some patients with severe cases.
The list of potential pharma rent collectors keeps growing:
(6/19/25) Potential type 2 diabetes drug found with new screening tool
(7/2/15) My $500 Pill Revealed — Revlimid — by Kevin Drum
Everybody’s got to read: http://www.medicalnewstoday.com/
I have a cousin diagnosed with congestive hearts failure (death’s door) — a few weeks later a report in Medical News Today of a treatment that actually improves and in some cases cures the previously incurable. Non-invasive, two-slit operation puts a pulsing air pillow around heart — allows it to rest and heal. Hope its approved in time for her (making move to speed approval if results of second trial impressive enough). Goggle: Sunshine Heart C-Pulse
What else have we go to do? We’ve been to the moon. Do we want articulated SUVs.
The problem at present is the out of control medical patent monopolies — noted in the list above. If PE bought out Dr. Salk’s lab before it finished up it would have charged many thousands of dollars an immunization — maybe tens of thousands — hey, you got to cover the research of all the cures that didn’t work out (usually four out of five). Dean Baker says by doubling or tripling the research the government supports now would replace big pharma research.
I forgot to add above that there is nobody lobbying heavily to take over big pharma research — or at least lobbying for government to set prices (cost-plus?) — and nobody supplying heavy campaign financing so our reps are inclined to listen to that lobbying (Citizens United okay then), so, therefore, none of our reps will care to listen …
… and wont care to until we make union busting a felony (eligible for RICO). Until we accomplish that David Cay Johnston will be wasting his life — a voice crying in the de-unionized, citizens de-sinued wilderness. Anybody here want to start a serious discussion (I don’t know what we would talk about) on backing labor organizing laws with criminal sanctions — just like every other market leg breaking form is sanctioned, Or do we all go one wasting our lives (compared to the efficiency we could have if we could count on getting sensible things actually done)?
well Denis said
pretty much what I was going to say.
we don’t need to starve gramma, or even take away any pills that work.
but i am afraid the success of obamacare means that we will never get reasonable prices or reasonable medical care in this country.
this is not because i hate obama. it’s because i see the medical/insurance industry still in control.
add that to our apparent inability (i am in “our”) to not do “everything possible” to prolong our lives…
Well Dale I would suggest looking at that chart again. Because the decline in projected Medicare expenditures from 11% in 2090 to 6% does represent a lot of cost control.
And we can not that the ACA established IPAB has never even been convened as yet and is tasked with cost control and reduction. Moroever I don’t see anything under ACA that would prevent movement on the drug cost front. For example we would likely see even more movement on SMI if we allowed Medicare to bargain with Big Pharma in the same way that the VA does.
Big obstacles yes. But I don’t see the “success of obamacare” as having reduced our ability to surmount them.
you may well be right. i am not as optimistic as you, but i have been for the most part avoiding comment on obamacare because for now it may be the best we could get. what the future will show may be something else.
‘add that to our apparent inability (i am in “our”) to not do “everything possible” to prolong our lives…’
Since someone else is paying for it, why not?
The change in the forecast trajectory for health care costs is great news if it’s coming about as a result of cost savings. If it’s going to be mostly about cost-shifting to consumers , celebrations are premature. I hope this isn’t the case , but I must admit the abrupt shift in the curve strikes me as too good to be entirely true , absent unpleasant qualifiers.
Marko we are talking Medicare here. And I think we would have heard if there were large and systematic cost shifts to beneficiaries. Making the place to look Medicare premiums and co-pays. Which are pretty transparent.
But all the discussion and analysis I have seen is that the change has almost all been on the provider side, that there haven’t been massive increases in patient dissatisfaction with Medicare suggesting beneficiaries getting short shrift, and that as a pure matter of tracking the vast bulk of the change in projections was recorded with the 2010 Report and was credited to reforms from ACA.
Certainly you are right to be skeptical. That is what makes the Tale of Two Charts so fascinating. It seems to be too good to be true. And maybe it is. Which makes this post an open challenge.
I am not afraid of pushback here, after all these aren’t my numbers, not my ultimate work product, as I often say I am just a number pointer and not a number cruncher.
In case it is not clear. These changes are not directly representing changes in overall health spending or even in overall federal spending on health care. They don’t capture health insurance supplied via the exchanges, or the VA system, or medicaid, or military health.
Instead the red line represents just Medicare with HI being the funding mechanism for Part A Hospitals and SMI that for Part B Physicians and Part D Drugs even as Part C Medicare Advantage is split between HI and SMI.
Is there a huge change in the assumptions of the two estimates?
Is there a chance there is political influence in one or the other or both? (I assume Bush was appointing people prior to 2009, and had an interest in making it look bad, while Obama has appointed the more recent authors, and has an interest in making it look good, but I do not even know how the authors came to be the authors.)
I thought at first it might be that the 2009 projections assumed a “doc fix” and the 2015 projections do not, but we got a permanent Doc Fix in April, so that cannot be it.
Yes , I would think that if there had been any obvious cost-shifting to Medicare patients that we would have heard the screaming. I just don’t like to get my hopes up , only to have them dashed.
Krugman’s column today eases my concern , as his chart shows the relative outperformance of Medicare vs private health care regarding cost controls :
Maybe your post gave him the idea for a column. If so , you should request a royalty.
This looks like more bad news for the Republicans – another big-government social program that’s doing just fine. What disasters will they be able to pin on Obama and the Dems for the 2016 campaign? It seems they’re getting short on material. If push comes to shove , I suppose they could always get the banksters to blow up the economy , again.
So long as there are enough health care workers, and supply of health goods we can “afford” medicare. You really can’t have increasing health expenses push GDP ratios that out of whack, as more health spending will push NGDP higher.
When will we develop something better than the GDP to do our measuements when we know that the Average or Median is inadequate once the distribution of the data is no longer a Normal distribution? The Mean would be much more MEANINGFUL.
You mean what David Brooks was telling me at the time was all wrong?
Are here no VSPs whom we can trust anymore?
Probably no royalties forthcoming , but he did give you a h/t :
Woo hoo! That’s two in my career!
Krugman also cited my post First Report of the Trustees of the Social Security Trust Fund: 1941 from 2011 that was noting something in the same vein. In 1940 the Social Security actuaries were fully aware of the “Aging of America” and called it right. The bleatings of the enemies of Social Security that “nobody anticipated —-” were broadly wrong. Quoting from the first Report:
As Krugman points out they didn’t exactly nail the composition of the elderly population but did nail the percentages.
looking at the chart (not again, it was slow to appear and i was replying to Denis’ more than…. what you said.
but as for the chart: in the first place it is about Medicare which is not “health costs in general.”
secondly, it is about a change in projection, not a change in fact: there could be many reasons for a change in projection having nothing much to do with reality.
third, medical costs in America are already twice as high per capita as in the rest of the world, so holding steady is not necessarily a sign of reduced costs.
now, please note, i could be wrong about all of this. it is not an attack on you, but just a sort of defense of the idea that looking at the chart would not necessarily render my concerns about leaving health care in the hands of the insurance industry obviously misplaced.
and, just to suggest that there may be reasons why people, like me, hold such perverse thoughts in the face of all serious opinion to the countrary: i had a recent experience with health care in America: I was chaged four thousand dollars for about ten stitches in my thumb, and slated for an operation that i did not need, refused to have, and the thumb is fine today. Medicare paid the bill and did not seem interested when i tried to tell them it was unreasonable.
so you don’t have to believe all us stupid people are being reasonable, but you should be aware we have our reasons for being unreasonable.
Dale the fricking title of the post is Tale of Two Charts: Medicare 2009 and 2015. Which might indicate that I KNOW IT IS ABOUT MEDICARE.
And YES THE FUTURE IS UNKNOWABLE. Which didn’t stop you from proposing a 20 year plan of phased in FICA increase based EXPLICITLY ON A PROJECTION.
As far as the charts may “not necessarily render(ing) my conerns — obviously misplaced” well the post neither had you, your particular concerns and especially not your preferred framing in mind.
Yes the post had the implication that this flattening of the curve in Medicare had significance for the health care system as a whole. This is part because the enemies of Social Insurance often use Medicare as their chose Canary in a Coal Mine. Moreover it swamps our Federal health care categories. But that doesn’t seem to be your point, Instead you have a particular concern about the relation between health care cost and the fact that it is largely in the hands of the insurance industry. And somehow find that my failure to address it directly, rather than say something I find interesting and important, is just my manifestation of the belief that you and people like you are one – stupid and two – unreasonable.
When instead the answer is a little more simple. I just am not that into you and don’t craft my posts around your priorities. This post was directly about major changes in Medicare projections and indirectly about how that challenges and goes right to the heart of those people pushing “entitlements crisis”. It was not an attempt to save the world.
Dale I try to keep my patience and sense of humor. But sometimes having to fend off attacks from opponents like Krasting while taking incoming friendly fire from you is Enough to Piss Off the Good Humor Man.
(younger readers that is a joke about ice cream trucks of yore).
you need to stop seeing my comments as attacks. they are not. this last comment was just to suggest that people (me) may not quite see the world the way you do.
you initially suggest “another look at the charts”. i got around to answering you… after agreeing that you might be right… and try to show why just looking at the charts would not lead me to change my concern that Obamacare will not save us from high medical costs.
i gave my reasons. you see that as an attack on you. no attack was intended.
as for my proposing a plan… tachnically it was you who proposed a plan. my role was simply to point out that the Trustees numbers supported a simple and easy “fix” to the “sky is falling” rhetoric.
moreover, I am NOT criticizing any plan… not even Obamacare… I am just saying that I worry about continued high costs, and pointing out that your chart is about projections of Medicare, not costs in general, and while the change in projections in Medicare MAY reflect an expectation of lower medical costs in general, there is nothing in the charts or your post that would make this immediately obvious from “another look.”
and now the part i really, really hate, because this is the part that you will take as an attack: you need to stop feeling attacked by me. such is not in my heart or my intentions. but like any small dog i will react in kind when barked at.
Dale everyone but you seems to perceive your criticisms and observations as attacks. Self-reflect much? Or at all?
Even describing your approach as ‘passive-aggressive’ doesn’t quite capture the tone. To repeat it is not just me, our mutual friend Arne made a similar observation the other day.
“as for the charts not obviously rendering my concerns misplaced”
“the post was not about your concerns”
i know that, but your comment directing my concerns to “another look at the charts” was.
yes, i know you knew the post was about Medicare. that’s why I was trying to point out that a chart about Medicare would not obviously reduce my concerts about obamacare.
it was not your failure to address my concerns that made me think you thought i was stupid. it was your suggestion that i take another look at the charts (that did not address my concerns) that made me think you thought i was stupid. I DID NOT MEAN TO IMPLY YOU HAD AN OBLIGATION TO ADDRESS MY CONCERNS. I merely pointed out, in reply to Denis, that I had concerns similar to his. YOU are the one who pointed me to the charts to address my concerns. I merely pointed out, as you point out, that the charts had nothing to do with my concerns.
The point here is not so much that you are being illogical. We ALL are. But if you are going to take everything I say as an attack on you, we are just going to keep having these nasty little public, pointless quarrels.
I am not your enemy.
I do not insist you address my concerns. I do not find your failure to address my concerns to be a problem.
what i find to be a problem is that whenever i address one of MY concerns you always take it as an attack on you for not having initially addressed my concerns instead of yours. mostly i will be addressing my own concerns, as people do in a blog, not finding fault with you for failing to address yourself entirely to my concerns.
sometimes i will be disagreeing with you, even strongly, but never in the way you see it as an all out attack against you, your entire program, your mother, your first born son, your dog and your hopes of eternal salvation.
get yourself an ice cream cone and try to stop feeling like i am attacking you.
i once told Arne that raising the retirement age “a little bit” as a compromise with raising the tax eighty cents a week was “cruelty by stupidity.”
I did not mean that as an attack against him, but against the idea. Nevertheless I hurt his feelings.
Well, I’d like not to hurt people’s feelings, but I have not found a way to avoid it while still attacking stupid and cruel ideas. I have noticed you are not very careful about hurting people’s feelings either.
Or at least I don’t notice it when you are. In your case I have turned myself inside out not to hurt your feelings. But it doesn’t work, you always find a reason for your feelings to be hurt.
Arne is an innocent. He really believes in being kind (in speech) and in compromise (even when they hurt good people for no reason other than his eagerness to compromise with the bad people who want to hurt the good people).
He, and your friends at NA’s are rude in ways they don’t see as rude, because they are the way all “upper class” people behave all the time: obsequious to their betters, polite insincerity to their peers, and contemptuous to their inferiors. There are perfectly understandable reasons for this, and I try not to judge them. But that doesn’t prevent me from getting angry at them, and, because I was not raised in polite insincerity, expressing it.
I am afraid I am not eagerly awaiting how this will be seen by you. Ignoring most of it, overblowing or completely misunderstanding the rest.
Houston, we have a problem.
“obsequious to their betters, polite insincerity to their peers, and contemptuous to their inferiors”
A powerful force field to prevent any undesirable opinions from entering your reality.
I am not the only one protected by a powerful force field from learning anything new.
And I am not the only one who sees the “upper class” that way. Just about any movie or novel invokes the image. Oddly, the “lower” classes are pretty much the same way, but they don’t notice it about themselves, and the upper classes don’t notice the lower classes at all.
And I don’t go around telling other people “Self-reflect much?”
oh, wud some pouer the giftie gie us to see oursels as others see us
you have no idea how polite, patient and tolerant i am being.
” some guy named Krugman suggests that I am not totally off base here. The Disappearing Entitlements Crisis I hear he has an audience ”
Don’t let your head get too big about this. Much of that audience could be people like me , and I only go there for the music videos.
Marko you underestimate my willingness to grovel for the slightest crumbs of recognition. I have been bragging on my last cite from Krugman ever since 2011.
I’d do the same. Once is brag-worthy. Twice is just…..wow.