“Even before Obamacare was enacted, the nation’s most difficult long-term economic challenge was runaway entitlement spending. Obamacare is more gasoline on what’s already a raging fire. The law included no real reform of Medicare or Medicaid. It simply doubled down on the failed model of command-and-control payment rate reductions. Those have never worked before to make the programs sustainable, and they won’t work this time either.”
“One of ObamaCare’s main goals is to cut costs — President Obama has said so repeatedly. Because Medicare is such a big dog in health care, and the government’s single largest toe-hold in the industry, Obama was counting on using it to shape providers’ behavior in the direction of cutting costs. So far, their efforts do not seem to be appreciated.
This initiative is all the more important because Obama did not go for the low-hanging fruit in medical cost-savings — malpractice reform.”
“Basically, hospitals will not be able to provide seniors with the same kind of services they provide younger patients. To survive, we may see hospitals specialize in Medicare patients and provide far fewer amenities. In some cases, they may offer reduced access to expensive technology. A private room paid for by Medicare may be replaced by four- or six-bed wards. Menu choices may be replaced by the civilian equivalent of meals-ready-to-eat. Hospitals that accept Medicare patients may have access to MRI scanners, but not PET scanners.”
“The sugar-coated rhetoric from HHS cannot disguise the bad medicine in this part of the Affordable Care Act, which intends to bureaucratically cut as much as $960 million in Medicare spending over three years. This Obamacare prescription threatens patients, the physicians who care for them, and the common good.”
“In 2012, Obamacare will create the ‘Value-Based Purchasing Program’ in Medicare. Using a pay-for-performance scheme, the program will reimburse hospitals and other health care providers at different rates based on how they score on performance measures chosen by the Secretary of Health and Human Services. Proponents of pay-for-performance see it as a way to use financial incentives to streamline and improve the quality of health care while attempting to reduce costs. But the fact is that standardization of the practice of medicine costs patients and physicians tremendously, and evidence shows it does very little to improve health outcomes.”
“President Obama’s plan for budget reform is to freeze these entitlement programs in their current arrangements and tinker at the margins — through, for instance, giving more power to Medicare’s Independent Payment Advisory Board or applying price controls to drugs sold through Medicare.
Along with higher taxes for high earners (families making $250,000 and up) and defense cuts, Obama’s deficit-reduction plan offers little innovation.
If Obama’s plan prevails, and these programs aren’t fundamentally reformed, poor and elderly Americans who depend on these programs will likely face much larger cuts in the future.”
“The Patient Protection and Affordable Care Act (PPACA) creates federal ‘accountable care organizations’ (ACOs). In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will not only fail; they will most likely exacerbate the very problems they set out to fix. ACOs will concentrate more and more power in fewer and fewer organizations, allowing them to become ‘too large to fail.’ Such a system undermines competition and entrepreneurship—the bedrock of innovation and job growth in this country.”
“Mr. Obama wants to expand the power of the 15-member panel, which was created by the new health care law, to rein in Medicare costs.
But not only do Republicans and some Democrats oppose increasing the power of the board, they also want to eliminate it altogether. Opponents fear that the panel, known as the Independent Payment Advisory Board, would usurp Congressional spending power over one of the government’s most important and expensive social programs.”
“Messrs. Ryan and Obama agree that Medicare spending must decline, and significantly. The difference is that Mr. Ryan would let seniors decide which private Medicare-financed insurance policies to buy based on their own needs, while Mr. Obama wants Americans to accept the commands of 15 political appointees who will never stand for election.”
“The fact of the matter is that IPAB won’t make the notoriously inefficient Medicare program any more efficient. Through arbitrary reductions on payments to providers, it will simply reduce the supply of care. Even before the advent of a new, more powerful IPAB and a new, tougher limit on spending, Medicare’s chief actuary warned that ObamaCare will drive providers out of the program. If you love Medicaid, you’ll adore the new IPAB version of Medicare.”