I like Karl Denninger. He has an amazingly consistent and accurate bullshit detector...
Paul Ryan's Dissembling On Medicare
by Karl Denninger
Lyin' Ryan is at it again...
The failure of politicians in Washington to address the crisis in Medicare is putting the health security of Americans at risk.
The U.S. House of Representatives recently passed a budget that advances a plan to save Medicare for today’s senior citizens and strengthen it for future generations. But instead of seeing an opportunity for bipartisan action, President Barack Obama and his party have seized it as a chance to play politics with the health of our nation. The Democrats’ dishonest characterization of this plan before the special Congressional election in New York State on May 24 was just the latest example.
No it doesn't. The CBO's own numbers show that Ryan's budget grows Medicare spending faster than Obama's does!
Here are the facts. Medicare is a critical program that helps people age 65 or older achieve health security. But it’s headed for a painful collapse. Independent experts and leaders in both parties agree that if we do nothing, Medicare will exhaust its trust fund in nine years, putting enormous pressure on the federal budget as health-care costs continue to rise.
There is no "trust fund"; the money was already spent. That's the dirty secret that nobody wants to talk about, and Ryan has been in The House for plenty of terms to be a big part of it. Now he wants to talk about "saving" it while at the same time putting forward a budget that actually increases Medicare spending.
If we don’t get skyrocketing health-care costs under control, we have no hope of containing government spending and averting a debt crisis. Health spending per person increases by almost 9 percent every year. As a result, total expenditure for health care has gone from consuming 5 percent of our economy in 1960 to almost 20 percent today.
9.3% from 1980 to today, but who's quibbling with the decimals....
Medicare is a top driver of these unsustainable costs. More than 75 percent of Medicare recipients -- that is, 35 million people -- receive what’s called the fee-for-service insurance plan. This means that Medicare reimburses doctors and hospitals for seniors’ health-care services.
This system leads to higher costs and lower quality for two reasons: First, the patient is disconnected from the cost. Fifty years ago, Americans spent a lot less on health care than they do today, but the share they paid for directly was much larger. In 1960, patients paid for about half of their own health-care costs. Today, that share is down to just 12 percent, with the rest paid for indirectly, through third parties such as Medicare.
Actually, it's even worse. Medicare (and Medicaid) both contain explicit and intentional cost-shifting. By permitting this behavior (which is broadly illegal in the general case under Robinson-Patman where any sort of physical commodity is involved) in the medical industry Medicare and Medicaid grossly distort the medical system in this country. Not only are those costs escalating but the cost-shifting is forcing up private medical expenses at rates that exceed what government is seeing!
There is a better approach: The budget the House recently passed saves Medicare, period.
First, the House plan protects today’s seniors from any disruptions. Our budget ensures no changes for those who are now 55 or older.
That's a lie.
First, the primary problem with Medicare is those who are 55 and older. Those are the Boomers. Once they go "through" the system a large part of the stress will dissipate. But if you're 55 today this load will be there for 30 more years.
And, in point of fact, Ryan's budget analysis shows that Medicare spending will rise more quickly under his proposal than Obama's!
This is not to say that Obama's proposal is any good. Neither will result in a sustainable outcome.
But Ryan's is objectively worse.
We also ensure that lower-income seniors and those with more health risks will receive greater support, while healthy seniors with more resources receive less.
But see, this is the problem you claim we have (and you're right) -- those who have more health risks largely have them due to their own lifestyle choices over their previous years. No, not everyone, but it doesn't matter -- statistics are what they are and the fact of the matter is that so long as the system allows me to be a fat bastard puffing on 3 packs of smokes a day and drinking half-a-fifth of booze, and when my health is ruined I can then force everyone else to pay for it, there is no resolution.
In stark contrast to reducing reimbursements to providers and denying benefits to patients, our plan relies on the best cost controls ever devised: consumer choice and competition. When providers are forced to compete for patients’ business, they will look to lower the costs and increase the quality of their services -- the way it always works when the consumer is in charge.
Sorry, but no.
Only when the consumer is forced to bear the cost of his or her own foibles -- directly -- will cost containment occur. There is no way to do that without coupling outcomes and expenses (by individuals) to choices. This, in turn, means the end of cost-shifting -- the repeal of EMTALA, the repeal of the laws that allow medical providers to bill two people at a different price based solely on how they pay.
Ryan's plan is a failure because it fails to address the primary causes of the cost distortion that we have seen over the last 30 years -- and all of them devolve into forcible cost-shifting enabled by government.
Until those distortions are removed -- by the removal of those special protections and "shields" that serve to force one person to give to another at gunpoint, when you boil it all down -- there is no solution.
Charity care filled the gap for the truly less-fortunate through most of this nation's history. Catholic Charities, as just one example, operated six hundred hospitals across this nation almost entirely funded through voluntary donations. Yes, there was "rationing" of care in those facilities, in that those who could not pay might not get the best care possible and the care they needed might not be convenient to where they were -- and this sometimes resulted in bad outcomes.
But the return of this system for the indigent, along with removal of laws allowing and even creating price discrimination, forcible subsidies extracted from one person to pay for care to another and cross-border protections that leave the United States paying 2, 3, 5 10 or even 100 times as much for a medication or device as is charged in other nations, is the only way we can solve this problem.
Medicare (or Medicaid) isn't the issue, in short. The issue is the special interest laws passed at the behest of the medical industry itself, and the medical system. If we intend to resolve the budget, this must be addressed.
As it stands Paul Ryan's pronouncements are simply an attempt to sell yet another fraud to the public.
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