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It wasn’t exactly So You Think You Can Dance, but watching Congress and President Bush boogie their way through the final song of the recent Medicare prom was still a hoot.
In the end, Hill Democrats stomped Bush and, despite his veto, easily passed a Medicare bill that delayed, yet again, mandated cuts in physician payments. The Dems did so while insisting they were for both true competition and fiscal responsibility. Bush, trying to claim those same virtues for himself, had unsuccessfully tried to block the bill, insisting it would hurt beneficiaries by curbing their access to managed care plans.
Even by Washington standards, Bush wins a chutzpah award for attempting to justify a 13 percent subsidy to private managed care companies in the name of market competition. Medicare managed care, done properly, might improve patient outcomes and save money. But we have never seen it done right, despite at least three tries over the past two decades, in part because insurers built their business models around these unsustainable subsidies, then cut and ran when the largess dried up.
Congress shares the chutzpah award, however, for trying to wrap itself in the cloak of free markets while trashing efforts to require competitive bidding for both private lab services and durable medical equipment such as wheelchairs. When it comes to slashing subsidies for insurance companies, Congress loves markets. When it comes to ending high-cost sweetheart deals for a handful of equipment companies, not so much.
Then, there is the doctor fix, which set off this whole hullaballoo. Last century, Medpac, an independent body that advises Congress on Medicare, recommended that physician reimbursement rates be trimmed. Each year or so, Congress dutifully bows to pressure from the doctor lobby and effectively freezes, rather than cuts, physician payments. This year, the reduction was supposed to be 10.6 percent, mostly because prior cuts had been repeatedly put off. When this comes up again in 2010, the docs will be in line for a 20 percent cut in payments. Care to guess how that will come out?
This fracas shows just how hard it is to do anything to control Medicare costs. These ballooning expenses are the biggest single risk to the nation’s long-term fiscal sustainability and, thus, a critical driver of tax policy over the next decades. Yet, Washington is not willing to reduce payments, or even encourage a tiny bit of price competition, for providers. And it took a huge battle to trim subsidies for Medicare managed care, which has become a honey pot for private insurers, especially the four companies that dominate the market.
And remember, all of this blood was spilled over payments to docs, equipment suppliers, and insurance companies, not patients. Just imagine what will happen when Washington tries, as it inevitably must, to tell seniors that Medicare will no longer pay for tests and treatments they want but which have no proven medical benefits. That, I promise you, will be no dance contest.
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