Last week the trustees reported that the Medicare will run out of money in less than 10 years, by 2017, two years ahead than projected last year. Social security will run out of money in 2037. It will start running deficits in 2017. The trust funds have always been a fiction since the surpluses have been used to reduce budget deficits.
From the summary issued by the trustees
Medicare's annual costs were 3.2 percent of Gross Domestic Product (GDP) in 2008, or about three quarters of Social Security's, they are projected to surpass Social Security expenditures in 2028 and reach 11.4 percent of GDP in 2083.
The argument goes Medicare is going to bankrupt us which is why we have to have universal health care. To which Megan McArdle replies
I hear this argument quite often, and it's gibberish in a prom dress. Any cost savings you want to wring out of Medicare can be wrung out of Medicare right now:
The Wall St Journal reports that the "unfunded liability" of Medicare over the next 75 years is $38 trillion. Yes, trillion. It's hard to wrap your mind around just how big a trillion is.
A trillion seconds ago, no one on this planet could read and write. Neither the Roman Empire nor the ancient Chinese dynasties had yet come into existence. None of the founders of the world's great religions today had yet been born.
A million seconds is 13 days.
A billion seconds is 31 years.
A trillion seconds is 31,688 years
Do you believe the White House estimate that it could save $2 trillion in health care over 10 years just like that the Boston Globe asks.
President Obama is right that the cost of healthcare, now more than 16 percent of the economy, is simply unsustainable.
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But will the industry's gauzy pledges of better coordination of care, more standardization of insurance claim forms, reduced administrative costs, and greater efficiency actually yield the promised savings?
Wesley Smith says we're Pushing Health Care Rationing By Not Discussing Health Care Rationing
rationing prohibits health care funders from paying for otherwise covered treatments, based on the patient’s age, state of health, disability, or perhaps, because the patient committed politically incorrect lifestyle crimes such as smoking or being overweight.
The rationing has already begun and the elderly are hardest hit.
Viking Pundit reports on a story in the Boston Globe on the "pathbreaking effort to cut medical costs" begun by Massachusetts General Hospital: send home the frail elderly from the hospital sooner and reduce their emergency room visits.
Medicare is now the country's largest purchaser of health care. OMB budget chief Peter Orszag believes that "comparative effectiveness research" will determine what works best. Problem is virtual colonoscopies work best for the elderly but not for anyone else. So as the WSJ reports in How Washington Rations, Medicare now will refuse to reimburse for virtual colonoscopies.
The problem is that what "works best" isn't the same for everyone. While not painless or risk free, virtual colonoscopy might be better for some patients -- especially among seniors who are infirm or because the presence of other diseases puts them at risk for complications. Ideally doctors would decide with their patients. But Medicare instead made the hard-and-fast choice that it was cheaper to cut it off for all beneficiaries. If some patients are worse off, well, too bad.
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All this is merely a preview of the life-and-death decisions that will be determined by politics once government finances substantially more health care than the 46% it already does. Anyone who buys Democratic claims about "choice" and "affordability" will be in for a very rude awakening.
David Brooks in Fiscal Suicide Ahead says that for Obama Health care costs are now the crucial issue of his whole presidency.
Posted by Jill Fallon at May 19, 2009 12:38 PM | PermalinkPlease don't fall for the "rationing" scare tactics being perpetrated by a well-funded and no doubt well-intentioned group.
http://www.factcheck.org/politics/government-run_health_care.html
Well-informed professionals from all sides of the health care field are cranking out some very impressive original material. The gas bags, talking heads and others carrying political or other ulterior motives are getting more strident as the debate unfolds. The simple reality is that no one knows what the end results will be until the Congressional sausage grinder has done its savage work.
http://www.thehealthcareblog.com/the_health_care_blog/2009/05/mckinsey-weighs-in-on-healthcare-reform.html#comments
"...McKinsey argues that the whole “40% of individual health care expenses occur in the last year of life” is no longer true - primarily due to the rise in costs associated with managing chronic conditions. Quote - “…our findings suggest that the management of chronic disease outside of acute-care environments accounts for at least 20 percent of total U.S. health care spending, perhaps more. That level of expenditure, compounded over decades in many cases, dwarfs the cost of end-of-life care…” They indicate that end-of-life health care spending - on average - for people who pass away between the ages of 65 and 95 represents less than 10% of the total amount of money they spend on health care during their lifetimes.
"McKinsey references obesity as a specific example. The incidence of clinically defined obesity has doubled in the U.S. since 1980 - to roughly 34% of the adult population. Clinically obese patients spend almost twice as much as someone with a normal body mass index on health care - every single year. Put another way, if we were as obese today as we were in 1980, we’d spend $60 billion less on health care. McKinsey says ignoring the impact personal behavior - and here, I’m mostly referencing diet and exercise - has on the rising cost of health care is a huge missed opportunity, and their data points make a compelling case.
"Second, McKinsey points out that the same service provided by two different providers in the same geographic area with the same patient and the same outcome can vary in cost by as much as 40%, and no one knows it. “In no other industry are service attributes and prices so opaque.” No kidding. Some of us having been banging this drum for years, and we are still in the crawl stage in terms of making this sort of information publicly available."
Tons more at the link, followed by a string of mostly intelligent comments.
http://www.thehealthcareblog.com/the_health_care_blog/2009/05/beware-the-bursting-of-the-health-care-bubble.html
Dr. Lundberg (former Editor in Chief of Medscape, eMedicine, and the Journal of the American Medical Association. Currently Distinguished Consultant, Physicians Advocates, Berkeley, CA and Consulting Professor, Stanford University School of Medicine) advances the "bubble" argument:
"The good news is that if and when the American healthcare bubble bursts, some value will remain. The bad news is that the annual appropriate value could actually be only about 60% of the current expenditure.
"...Some loud and whispered voices in medicine will say…. “we are not like those finance guys. We deserve our money; after all, we do good”. American medical advances unquestionably do save lives. But I argue that medicine is still a learned profession, indeed still a service profession, and should perform as such. Asking the government to throw a lot more money medicine’s way in order to cover the uninsured is thinking like those in the failed financial sector. Comparative international experience shows that there is enough money already in our system to care for the basic medical needs of all of our people, if we spent it right. Government has a responsibility NOT to make the health care bubble even bigger. I believe that our long overdue Health System Reform must care for the basic healthcare needs of all of our people as a moral imperative derived from our national culture of common compassion. And, now is the time for those of us in the American medical profession to do our patriotic duty to rein in our many egregious and habit-addicted members and lead the rest of the bloated medical-industrial complex to cut back on its vast waste. We can help to get the US back on track economically to benefit us and our children’s children. But let’s beware of the inevitable collateral damage that will result from the bursting of this bubble, and re-valuation of the healthcare industry at 60% current expenditures, and let’s prepare for it. Or, will we learn that the American Disease-Medical-Industrial Complex has really been largely a sophisticated “jobs program” all along, and cannot change now since the already high US unemployment rate would rapidly reach double digits?"
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I neither agree nor disagree with either of these quotes. I toss them out just to illustrate this point ==>
==>There's too much intelligent discussion going on to be side-tracked by politics and lobbyists. This "rationing" meme does nothing but poison the well. It belongs in the same trash heap as the "9/11 was an inside job" crowd and the Holocaust deniers.
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