I’m no Bush basher, but this time he has really pissed me off. As part of a belated effort to get federal spending under control, he wants to cut Medicare payments to hospitals. Here’s how it will work, according to the NYT:
The largest amount of Medicare savings, by far, would come from hospitals: $15 billion from an across-the-board reduction in the annual updates for inpatient care; $25 billion from special payments to hospitals serving large numbers of poor people; and $20 billion from capital payments for the construction of hospital buildings and the purchase of equipment.
If approved by Congress, his proposal to is going to do serious damage to American health care. Medicare already pays hospitals less than cost (that’s cost, not charges). Here’s a chart that shows how Medicare (and Medicaid) payments have deteriorated in recent years:
Nationwide, well over half of the people who require hospital care are on Medicare and/or Medicaid. And, because hospitals lose money on these patients, they are in financial distress all across the country.
Hospitals do not have magical powers. They can’t stay open if they receive less money for their services than it costs to provide those services. And it is a myth that private insurance provides enough money to make up the difference.
In reality, the average American hospital loses money on patient care. This is why the number of U.S. hospitals has declined from about 7,000 in the 1970s to fewer than 5,000 today.
This ”cost-cutting measure” by the Bush Administration is more proof that the government cannot be trusted to manage our entire health care system. Even a market-friendly President like Bush is compelled by politics to do stupid things where health care is concerned.
At present, the government only controls about half of the health care economy. What do you think is going to happen when Hillary gets her hands on levers of power? She and the rest of those Beltway idiots will destroy our health care system.
Comments 13
Thought you’d be pleased - this should force more people out onto the ‘market’.
Posted 01 Feb 2008 at 10:35 am ¶Unfortunately, this proposal doesn’t significantly affect the amounts patients would have to pay.
If it increased patient co-pays, then it might indeed cause people to be more circumspect about the amount health care they consume.
As it is, this will give us the worst of both worlds: Increasing demand with fewer hospitals to accomodate it.
Posted 01 Feb 2008 at 11:42 am ¶If there are fewer hospitals that take Medicare then people will have to use private clinics?
Posted 01 Feb 2008 at 12:07 pm ¶Unfortunately, Medicare has cut its payments to primary care physicians to the extent that many rural areas (which tend to be very Medicare/Medicaid heavy) have no private alternative to the community hospital.
So, when the hospital is forced to shut down, the patients have no place to access health care. For example, there is a county near my home that has no hospital or PCP at all—zero.
This a phenomenon that occurs with increasing frequency, and it is the direct result of government price controls.
Posted 01 Feb 2008 at 12:27 pm ¶So - as you don’t want to scrap Medicare, presumanly the only answer is to increase the budget by diverting funds from elsewhere or raising taxes. It would also be useful to see a comparison between the cost of running a typical hospital with an equivalent one in France or the UK.
Posted 01 Feb 2008 at 12:45 pm ¶“The only answer is to increase the budget by diverting funds from elsewhere or raising taxes.”
Nope. The answer is to privatize the whole system thus allowing the market to work. As the Part-D experience demonstrates, that would control costs without forcing providers out of business.
Posted 01 Feb 2008 at 1:24 pm ¶Or it could indicate that since medicare is so inefficiently run, it would be folly to give the government more control.
Posted 01 Feb 2008 at 1:28 pm ¶‘The answer is to privatize the whole system thus allowing the market to work.’
That’s funny - I could have sworn it was a certain D Catron who said that if you advocated abolishing Medicare you were in whack-job land, or words to that effect.
Posted 01 Feb 2008 at 3:55 pm ¶There’s a difference between “privatizing” and “abolishing.”
Posted 01 Feb 2008 at 4:20 pm ¶Marc,
Costs in the hospital are not the problem. Fortunately, the hospital has access to the free market to address cost issues, and can negotiate prices, contracts and so forth to reduce costs.
The problem is reimbursement scheme that is implemented without regard to those costs, and no mechanism for negotiating the reimbursement.
Posted 01 Feb 2008 at 4:51 pm ¶Our medicine units always work short because their budget is so tight and they never approve anyone for doubles, for instance. Why is their budget so tight? They never make money. Why don’t they ever make money? Most of the patients who are on medicine are the chronically ill elderly on Medicare. They’re really sick with a UTi or a cellulitis or a non-healing diabetic foot ulcer, but–yawn–they don’t need a heart cath or some other better-reimbursed procedure, so the nurses must work short so they don’t go too far over-budget. You can only lose so much money.
Posted 02 Feb 2008 at 3:47 am ¶BS is exactly what this piece is.
We have the worst healthcare system in th developed world. Twice the cost of others +terrible quality of care. It’s a national disaster and a national disgrace. If I were ever seriously ill, I would seek treatment somewhere else.
Maybe it should be destroyed.
Posted 04 Feb 2008 at 9:35 pm ¶mnjam, if it is so important to you , why not move to one of those wonderful progressive countries that is so much better than the US? That is what almost our ancestors did when they came here. But no, it is more convienient to destroy a system that works at least as well as any socialized system in the world. Maybe you should provide source material for you assertions. There are many for mine, including the Joint Commission, HEDIS, data from the Ambulatory Quality Alliance, etc.
Posted 05 Feb 2008 at 10:09 am ¶Post a Comment