Today, CNN revealed:
http://money.cnn.com/2010/06/03/news..._fix/index.htmThe AMA's TV, radio and print ads slam senators for failing to pass the "doc fix" before taking their week-long break. The group has a long history of pushing to reform the formula used to calculate Medicare payments to doctors…
"Medicare payments are stuck where they were in 2001, while medical costs are up by 20% according to the government's own data," Rohack said.
The Medicare payments argument is greatly inconsistent with the larger picture associated with Medicare expenditures. If one examines Medicare enrollment and Medicare expenditures data, one finds Medicare expenditures per Medicare enrollee came to:
Moreover, in its latest Article IV consultation with the U.S., the International Monetary Fund explained:
Per capita health spending in the United States is the highest in the OECD, and is still rising. U.S. health spending represents over 15percentof GDP, compared to less than 10 percent in the G-6 group, and grew by about 5 percent a year in real terms over 2000-06 compared with 3 ½ percent in G-6. Without major reform, the Council of Economic Adviser project that health care’s share of GDP will continue to rise rapidly, reaching around 28 percent of GDP in 2030 and 34 percent in 2040 (15 percent of GDP accounted by Medicare and Medicaid). Despite the large spending, health outcomes in the United States are less favorable than in many OECD countries.
In my opinion, the issue over Medicare reimbursements is an early litmus test as to whether the special interest appetite for taxpayer financing will take precedence over fiscal discipline. If Congress appeases the AMA, it will send a dramatic signal that the very modest cost-savings measures in the recent health care law are not credible. Moreover, it will send a worrisome signal that Congress is not capable of making the even tougher decisions that will be necessary for the U.S. to return to a fiscally sustainable path. In the long-term, fiscal sustainability will depend on far-reaching health care reform that addresses that industry’s chronic excessive cost growth issue.
Although I had supported easing the transition on Medicare payments, but only if it were fully funded by offsetting spending reductions and/or tax hikes, this salvo fired by the AMA leads me to believe that in the larger interest of moving toward credible fiscal consolidation, the far better approach would be for Congress to draw the line and reject any changes to Medicare payments. Such payments per patient have exploded by more than 67% since 2001.
In the long-run, Congress will need to spend less than it would otherwise under base law. Transferring spending from one sector to another is a much weaker approach, as it indicates that Congress lacks the ability to actually rein in spending.
Unfortunately, as government has typically demonstrated a bias toward accommodation, my guess is that Congress will cave in to the AMA’s pressure. That development will likely embolden other special interest groups to seek increased taxpayer payments, even as the nation’s debt continues to climb and its long-term fiscal imbalances remain yet to be addressed.