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Health Alert | News That’s Too Good to Be True

Did you know that when the president signed the Patient Protection and Affordable Care Act (PPACA) he wiped out $53 trillion of unfunded U.S. government liability? With the stroke of a pen, more than 60% of Medicare's long-term deficit vanished... Poof. Zip. Gone.

It's all in the latest Medicare Trustees report and is summarized in the following table

 

infinite-time-horizon

 

As with many of health care's most interesting facts, you're reading about it here first. But why? Why wasn't something said at the press conference when the Trustees report was released? (It wasn't even mentioned in the CMS "Fact Sheet" distributed to reporters at the time.) Why wasn't the White House touting these numbers on the Sunday morning talk shows?

The reason, I believe, is that the news is too good. It's embarrassingly good... It's, well, unbelievable. Here are the numbers for the next 75 years:

75-year-horizon1

Taking a closer look at the two tables, we see that not all sectors were treated equally by the PPACA. The pharmaceutical industry made out like bandits. (Billy Tauzin was worth every penny of the multimillion dollar salary PhRMA paid him.) Doctors took a bath. And the hospital industry got creamed. (You wonder if the American Hospital Association was asleep when all this was going on.)

But what if you don't care about the lobbyists, the trade associations and the special interests? What if your main interest is in what kind of health care you're going to get?

Well, that's why there was a need for an alternative report - one prepared by Medicare's actuaries. And according to this report, there's no such thing as a free lunch. For example:

  • The Trustees report assumes Medicare doctor fees will be cut by 30% in the next three years and continue to decline in succeeding years.
  • By 2019, Medicare fees will be below the fees paid by Medicaid.
  • By 2050, Medicare fees will be one-half of what they private sector pays; by 2080, they will be one-third.

So, why will doctors continue to see Medicare patients? Why will hospitals admit them? Many won't. And that's why the actuaries say the Trustees report is "unrealistic" and "implausible."  According to the alternative report:

  • By 2019 one in seven facilities - hospitals, skilled nursing facilities, home health care agencies and hospices - will be unprofitable and risk bankruptcy.
  • By 2030, one in four will be unprofitable.  By 2050, it will be 40%.

There is no more effective cost control device in the world than the simple expedient of denying people care. And that is what is being forecast for the future of the elderly and the disabled.

P.S. We rarely get partisan at this blog, but in this case I think we can safely say that it's too bad the PPACA was not a Republican bill. If it were, everything you are reading here would be front page and above-the-fold in the East Coast press

John_GoodmanJohn C. Goodman is president and CEO of the National Center for Policy Analysis. The Wall Street Journal and the National Journal, among other publications, have called him the "Father of Health Savings Accounts," and the Media Research Center credits him, along with former Sen. Phil Gramm and columnist Bill Kristol with playing the pivotal role in the defeat of the Clinton Administration's plan to overhaul the U.S. health care system. He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system.

Dr. Goodman's health policy blog is the only right-of-center health care blog on the Internet. It is the only place where pro-free enterprise, private sector solutions to health care problems are routinely examined and debated by top health policy experts throughout the country-conservative, moderate and liberal.  

 

 

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