Monday, February 12, 2007
Some of the institutions affected most would be hospitals, nursing homes, home health agencies and other providers, whose Medicare payments would be more than $61 billion lower than anticipated over five years (although still higher overall). Bush also proposes automatic across-the-board cuts in provider payments if Medicare spending reaches certain levels for two consecutive years. His budget would not forestall a planned 10 percent cut in Medicare payments to doctors next year.
Decreasing those payments has consequences:
Bruce Yarwood, president of the American Health Care Association, said the 9,000 nursing homes he represents would receive about $10 billion less than anticipated over five years.
"We'll squeeze, cut and trim administrative costs," he said. "You take a look at your staffing patterns, and rather than four people on the night shift you have three. And rather than seven or eight on the day shift you have six. You take a look at your maintenance crew; you say, 'Rather than mow the lawn every week, I'll mow it every two weeks,' so you lay off a maintenance guy."
Laying off the maintenance man will only hurt the maintenance man (and his family), but cutting the nursing home staff is going to affect the care of every nursing home resident. And we'll see the same thing happening in hospitals. (Yes, I know, hospitals could stop building multi-million dollar heart centers and cancer centers, etc., but they see those things as future income enhancers. They see staff salaries as a drain on resources.)
The huge prescription drug benefit increased Medicare spending significantly, but there is some indication that the government is aware of the true cause of increased Medicare spending:
A little-noticed section of that law, however, for the first time required the more affluent to pay higher premiums. Starting this year, about 1.5 million beneficiaries with incomes of more than $80,000 annually ($160,000 for couples) pay monthly premiums of $106 to $162.10 for Medicare Part B coverage for physician services, up from the standard premium of $93.50.
The Bush budget would no longer adjust the income thresholds annually by inflation. And it would tie drug benefit premiums to income starting next year, a move that would affect 1.1 million beneficiaries, the Centers for Medicare and Medicaid Services calculates. The changes would save more than $10 billion over five years.
The retirees don't like that, but a retired person making over $80,000 a year really is doing very well- and those premiums are bargains compared to what they would be in the private insurance sector.
Arnold Kling has some thoughts on fixing the system.
posted by Sydney on 2/12/2007 06:51:00 AM 3 comments
Non-Medicare patients also pay a price for this policy. In an effort to make up this lost income many doctors feel they have the right to game the system. I have been shocked at the interest in my personal insurance and income levels when speaking with a doctor or nurse.
By 10:16 AM, at
I was pretty interested in Mr. Kling's argument until I got to the point where he said he would rather self-insure. At that point, I quit reading because nothing else he could say really could be trusted as a reasonable solution to our financing problems.
By 3:39 PM, at
"At that point, I quit reading"
By 8:35 PM, at