There’s plenty for everyone to not like in President Obama’s health care reform plan – the one revealed late yesterday in a conference call with his advisers and media. (Almost) Everyone will find something to object to – higher taxes, lower reimbursement, reduced profits, increased fees – the Administration found every possible way to share the pain.
The plan is projected to raise about $634 billion over the next ten years, money that will be used to expand coverage. Sounds like a lot of money – but remember we’re talking about health care – so it isn’t. More on that in a minute.
It’s a different strategy – because no one can legitimately complain they are suffering more than anyone else, the plan’s architects have leveled the playing field, spreading the burden amongst (almost) all the stakeholders. It will be tough for lobbyists to plead poverty or maltreatment – if they do their contribution to the solution will have to come out of another stakeholder’s hide.
There is one group that wasn’t directly addressed – physicians. Again, more on that in a minute…
Whether it will work to help push reform thru at long last is a very open question – but give the President credit, it is a different approach.
Here are a few of the highlights – more to follow.
– Higher taxes on those making over $250k will be a primary funding source
– As predicted, Medicare Advantage subsidies are history – providing about $175 billion (thanks Hetherjw) over a decade. These funds will contribute about a third of the dollars sought by Obama to expand coverage.
– Hospital reimbursement will be reduced, with one major bite coming from a change in reimbursement – there will be a flat fee for the initial hospitalization and 30 days of follow up care. This is response to studies that indicate 18% of Medicare patients are re-admitted within a month of the initial hospitalization.
– Wealthier seniors will pay higher premiums for Medicare coverage
– Pharma is also hit, with a higher rebate for Medicaid drugs (increased from 15.1% to 22.1%)
– and they may well be unhappy about Obama’s effort to speed approval of generics
With all that, there are a couple key issues that were not addressed in the conference call with the President’s advisers last night. And they are big ones – physician compensation and Federal negotiation with pharma for Medicare Part D drug pricing and/or rebates.
Back to the $634 billion question. As Bob Laszewski points out, the $634 billion that will be ‘raised’ by these steps will not be enough to provide universal coverage. So, where’s the rest of the cash going to come from?
Is it possible that the absence of physician reimbursement cuts from the proposal is part of an overall strategy whereby everyone else complains about docs not doing their part? Is this a calculation on the part of the Administration, who recognizes that the physician lobby is the strongest it will have to contend with? Have they deliberately set up a physicians v. everyone else ‘discussion’?
What does this mean for you?
At this point, it looks like the only ox that is not gored by the plan is owned by physicians. I wouldn’t expect that situation to remain static…
Feb
26
To think, people were concerned about the Obama strategy of “spreading the wealth.” Now, we find that the true strategy is to spread the pain.
Good to see a serious first step in the very first budget put out by this administration.
A small typo above: “As predicted, Medicare Advantage subsidies are history – providing about $175 million over a decade.”
I think you mean $175 billion, not million.
Do you want a for-profit business making decisions about your health care?
Besides the fact that our archaic system is costly and unsustainable, it does not provide the best care.
For-profit health care insurers can deny doctor recommended treatments based on their bottom line and sometimes people die.
But the CEOs still get their bonus at the end of the year.
Payment to Medicare are unfair. The cost per month for the majority of the participant is the same regardless of income (less than $85,000 individual. Current cost regardless of residency or income is $96.40 per month. If your income from Social Security is $700 per month 13.77%, If income is $2000 you are paying 4.8% If income is $7000 you pay 1.3%.
I would hapily pay the same percentage as everybody else. I would suggest that participants should be able to pay at least 2% of income.
My real disappointment is that “me too” drugs were not addressed. Imagine the HUGE savings to Health Care is ‘Me too” drugs were not approved as easily as they are by the FDA. Do we really need a “son of Prevacid”, a “third generation Prilosec” or an “extended release” Flexeril? This step would save millions upon millions for Americans.
Physicians are the boots on the ground and if you expect the 45 million that he wants to be seen put into the system and not bring the place grinding to a halt you have to pay your troops. A nationwide slowdown by physicians with simultaneous expanded coverage will kill this thing in the cradle and they know that. Grandma and Grandpa will burn Washington to the ground if they end up waiting 6 months for an appointment.
Physicians are already scheduled for a major and unsustainable Medicare payment cut in 2010. What more can they do in terms of Doc. payment cuts?? Medicare already pays less than the cost of providing care in many instances.