Kossack kelvinchapman posted a diary this morning titled “Help Me Fact Check the Bogus Factchecker”. It focuses on this Forbes blog by Avik Roy, a self-described “outside adviser to the Romney campaign on health care issues”. I happen to know a bit about the subject, and answered kelvinchapman’s request for help by responding item-by-item to Roy’s points. But I also thought that my responses might be useful for others in terms of how to answer when Republicans (some of whom may have read the Forbes article) make similar charges about Obamacare.
So below the fold is a slightly expanded version of my responses. Blockquotes are from the Roy blog:
Of the $716 billion in cuts, $415 billion come in the form of “updates to fee-for-service payment rates,” a euphemism for reducing Medicare’s payments to doctors and hospitals.
I assume that by “updates to fee-for-service payment rates," he actually means the move away from fee-for-service and the moral hazard issues that such fees beget (prescribing unneeded tests, for instance). This move, started by Blue Cross Blue Shield of MA about five years ago and now being copied by many other private insurers across the country is called the
"Alternative Quality Contract and it is VERY popular with hospitals that can and are willing to improve quality. Most tertiary care hospitals (MGH, Brigham, etc.,) in Eastern MA have adopted Blue Cross's AQC.
But what happens when you reduce payments to doctors? Doctors stop being willing to see Medicare patients. And if you can’t actually get a doctor’s appointment, what does it really matter what your insurance plan covers on paper?
Actually? Patients will do what they do now -- they'll go to the super-expensive ER, just what a hospital operating under an AQC-like structure DOESN'T want happening, as it costs them a lot more! And while a very few doctors may indeed elect to completely ignore Medicare patients, if the hospital with which they are affiliated sees its ER costs going up for that doctor's patients, they will QUICKLY -- er -- adjust his outlook.
The Obama administration’s own Medicare actuary, Richard Foster, has explained that the Obamacare Medicare cuts could make unprofitable 15 percent of hospitals serving Medicare patients. “It is doubtful that many [hospitals and other health care providers] will be able to improve their own productivity to the degree” necessary to accommodate the cuts, Foster has written."
Hospitals, in general, are notoriously inefficient with money. AQC-type contracts force them to provide better quality patient care and be more efficient or go out of business (frequently being taken over by more efficient hospitals systems -- the consolidation in the industry is on-going). But why would the GOP urge continuation of subsidies that allow inefficient hospitals to stay in business at taxpayer expense?
“Thus, providers for whom Medicare constitutes a substantial portion of their business could find it difficult to remain profitable, and, absent legislative intervention, might end their participation in the program (possibly jeopardizing care for beneficiaries.
"(P)roviders for whom Medicare constitutes a substantial portion of their business" are the LEAST likely to end participation in the Medicare business! What are they going to do -- go take those high-payin' fruit picker jobs?
The whole section on Medicare Advantage is basically a crock. There is NO indication that insurers are canceling their MA offerings. Can Roy quote evidence that this is happening? In Massachusetts, both Blue Cross and Tufts Health Care continue to offer them. At least those two insurance companies seem to think that the increase in market share is worth the reduction in the subsidy.
Personally, I have no problem with eliminating the extra subsidy for Medicare Advantage plans. But that elimination should have been accompanied by regulatory changes, so that Medicare Advantage plans could compete on price with traditional government-run Medicare. That would have saved the government even more money, instead of forcing seniors out of the program.
Because private insurers can offer lower cost coverage than Medicare! Ri-i-ght!! And of course hospitals are going to sign contracts with those insurers for less than they can get from the federal government through Medicare. Uh-huh.
Advocates of the 2011 Ryan plan, myself included, argue that precisely because of the premium support mechanism, seniors would be incentivized to shop for value with their insurance plans, creating a market incentive that would moderate health care cost growth.
Without changes in the fee-for-service structure (which I have seen NO indication that the GOP supports!), any incentive for hospitals to reduce costs is completely speculative. And, as we know, healthcare demand is singularly inelastic --
"people will rob banks to get needed health care for loved ones. Health care costs would quite likely continue to rise for those who can afford it, while being beyond the means of those who can't.
Finally, of course, Roy mentions nothing about the increase in medication benefits that will come to Medicare recipients as a result of the ACA’s narrowing of the “donut hole”, the middle ground where the patient has to pay drug costs.
People like Roy will cherrypick data and arguments to fit their philosophy, and if the public doesn’t understand the details of the discussion, it’s hard to point out where they are full of crap.