I rarely agree with Shannon Brownlee, but she has a post over at Ezra Klein’s blog that makes a good point about Medicare Advantage and the recent veto override:
As much as it pains me to say it, President Bush may have been right to veto legislation that delayed Medicare pay cuts for doctors by cutting payments to Medicare Advantage plans …
In order to remain in good standing with her ”progressive” colleagues, Brownlee has to cover herself with a silly caveat about Bush being ”right for the wrong reasons,” but she goes on to make a more sensible point:
[Medicare Advantage] was intended to help true staff model health maintenance organizations, like Kaiser and Group Health Cooperative of Puget Sound, which deliver high quality care – and have high patient satisfaction – for lower costs.
Bingo. Medicare Advantage comes closer than any other coverage model to hitting the magic combination of quality, access, and lower costs. So, as Brownlee puts it:
Taking money away from Medicare Advantage is the wrong thing to do …
In reality, the Democrat jihad against MA has nothing to do with physician payments, insurance profits, or patients. Indeed, as I have pointed out before, cutting MA actually harms the patients they claim to represent.
They want to kill MA because its market-based model threatens the money and power they control by keeping Medicare under the absolute control of government apparatchiks.
[HT Kevin,MD]
Comments 5
Medicare Advantage, in THEORY, combines quality, cost, and access issues in a way that should lower costs. In PRACTICE, however, MA costs more than traditional fee-for-service Medicare.
Ideological arguments are interesting, but irrelevant in the face of empirical data. There may be ways to modify MA so it can truly fulfill its purpose of providing maximum value in quality, cost, and access. As currently configured, however, it doesn’t work.
Posted 14 Aug 2008 at 11:34 am ¶“MA costs more than traditional fee-for-service Medicare.”
Actually, SW, if you run the numbers on the basis of comparable benefits, and factor in the hidden admin costs of traditional Medicare, MA is the least expensive of the two.
Posted 14 Aug 2008 at 12:26 pm ¶Actually, MA may be even less expensive than Medicare fee-for-service (boy, there’s a misnomer if there ever was one.)
Traditional Medicare requires considerable cost-sharing, while cost-sharing is reduced in most MA plans. I don’t recall, but I don’t think the GAO comparisons factored in cost sharing,
Posted 14 Aug 2008 at 2:19 pm ¶I am a former employee of one of the large MA companies. MA is not for everyone, but it does offer exceptional benefits over original Medicare. Most plans have a maximum out-of-pocket, usually from $2500 to $5000 a year. Once a member spends that amount on medical, not Part D drugs, the insurance company pays 100% of their medical bills for the rest of the year. For example if the Medicare approved amount was $100,000, the patient responsibility could be $20,000 unless they purchase a Medicare Supplement, which many seniors can’t afford.
One benefit of the MA plans that will not show up right away is the free health club membership. This is something you have to see to believe. I’ve seen dramatic improvements in seniors physical and mental health. The result will be fewer medical bills down the road. Prevention is the key.
Posted 15 Aug 2008 at 9:44 am ¶MA is often a great deal for individual beneficiaries, offering an enhanced benefit package at a relatively low cost.
On the whole, however, there is no question that this program costs more (to the government and therefore the taxpayers) than the traditional fee-for-service program. Research has consistently demonstrated this, some of it dating back nearly 20 years to when private plans were first offered as an option in Medicare. Arguments about “hidden” administrative costs and cross-subsidization are just that - arguments. There has never been a rigorous study that has demonstrated that MA saves money, either in the short or long terms.
That’s not to say that MA shouldn’t be an option or that the traditional fee-for-service system is the way to go. It simply shows that MA, as currently designed, is more costly.
Posted 15 Aug 2008 at 11:56 am ¶Post a Comment