Fact of the Day

From former Obama budget director Peter Orszag:

Social Security is not the key fiscal problem facing the nation. Payments to its beneficiaries amount to 5 percent of the economy now; by 2050, they’re projected to rise to about 6 percent. Over the same period, federal health care costs will increase six times as much.

Orszag goes on to explain that Social Security does face a long-term deficit that should be addressed. But as the debate about balancing the budget rages away in the coming weeks, remember how central health care costs are to that problem. And that’s still true even if you’re optimistic about the Affordable Care Act’s cost impact.

Look at the NYT‘s nifty interactive budget-balancing game, for instance: Its’ top top 20-year cost saver entails limiting Medicare to a growth rate of just one percent above GDP growth, which would cut the deficit by a projected $562 billion. Raising the Social Security retirement age to 70 ($247 billion) doesn’t even get you half that. Even extending the Bush tax cuts for both upper- and middle-income earners only gets you $367 billion. You’ve got to control health care costs.

Update: Felix Salmon has some good context:

You can win the game without clicking on that [Medicare] box — I managed to do it — but of course the game becomes much harder if you deny yourself that easy and fanciful trick. But it is fanciful: there’s simply no credible way to enact that kind of hard cap on Medicare expenditures, in a world where the over-65 population is growing fast as the Baby Boomers retire, where that generation is also living longer than ever, and where end-of-life healthcare is becoming increasingly expensive across the board.

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  • Ivy_B

    And let’s remember they are the private system health care costs. If there had been a truly honest debate, we might have explored why we pay so much more than other industrialized countries for markedly worse results. Stuart posted the numbers often enough here, but they were rarely seen elsewhere.

    Nipping at benefits for the less fortunate won’t do it either.

    Richard Cohen mentioned this in a column last week – after it’s too late.

    The United States spends upward of 17 percent of its gross domestic product on health care. European nations spend about 8 percent – and their citizens are actually healthier. Republicans oppose Obamacare. Fine. But where is their plan? Not the lauded status quo. As we can see, that’s a terminal disease.

    http://www.washingtonpost.com/wp-dyn/content/article/2010/11/08/AR2010110804894.html

  • gysgt213

    Michael Crowley-You write this like the words have never been utter before. Of course this is grown up saying it right. A member of the inside the beltway elite . Some one you can respect and not some DFH Cheeto eating blogger on the professional left. Good lord.

  • newfreedomblog

    The REAL “Fact of the Day”
    .
    As long as you are a long time contributor to the Demwitted Party, you get an exemption. As this goes on and on, Americans understand how badly the ObambiCare has screwed us all.
    .

  • square1

    I’ve said it before and I will say it again. Anyone who claims that Social Security is a problem is a liar or a moron.

    The federal government has borrowed from the SS trust fund for decades. Now it needs to be paid back. Politicians obviously don’t like that they have to give up their slush fund, but why that is the problem of beneficiaries is utterly beyond me.

    If, after paying back SS, our budget shortfall is too great then raise taxes on the wealthy, capital gains earners, and corporations. This is not rocket science.

    BTW, yes, Medicare is the scariest legitimate budget expense going forward. Having said that, it is instructive to note that those now calling for “pain” and “tough choices” are, by and large, those who have stood in the way of legitimate health care reform that would have “bent the health care curve.”

  • http://derekg.wordpress.com/ Derek

    “You’ve got to control health care costs.”

    That statement adds about as much to real policy as saying “we all need to get along.” Someone should form the “Stating the Obvious Party.”

    As someone already noted above single-payer systems, which have been in existence since the 1800s now, reduce costs by about 50%.

  • grape_crush

    Okay, since almost everyone agrees that there’s a need to get a handle on medical costs, how do we go about doing it:

    1) Reduce the Medicare benefit, or

    2) Enact medical care/supply price controls, or

    3) Some combination of the above? (add others I’ve missed, please)

    Decide what’s in line with this nation’s priorities (hint: it’s not deficits or taxes) and make it happen.

    Yeah, yeah…it’s not that easy, even ‘tho it should be.

  • newfreedomblog

    The priority of Obama-Pelosi-Reid Care, aka Affordable Care Act of 2010 was and will always be about deals.
    .
    One of the latest deals is the exemption of various groups, as well as a myriad of other companies and groups who will be afforded early retirement benefits.
    .
    From the Louisiana Purchase to the Cornhusker kickback, now we have the let’s screw America deal.
    .
    http://www.healthcare.gov/news/factsheets/early_retiree_reinsurance_program.html
    .
    ObamaCare is not about saving any money. It is however, everything to do with saving SEIU and other various Unions.

  • Michael Crowley

    No, I really wasn’t implying that, nor do I think I’m the first to say it.

  • diecash1

    4) Change Medicare from a fee-for-service plan to an HMO-style plan focused on overall wellness and results.
    ..
    Fee for service is an abysmal waste of money as many layers of fees are added on by healthcare providers while often providing little benefit to the patient.

  • freeinpa

    “Social Security is not the key fiscal problem facing the nation. Payments to its beneficiaries amount to 5 percent of the economy now; by 2050, they’re projected to rise to about 6 percent. Over the same period, federal health care costs will increase six times as much”
    .
    Before you it send this is more of an artifact than fact. Check the history of Social security “facts” and haow wrong they have been.

  • freeinpa

    What about all those promises we received and conservatives were called liars for pointing them out?

    You can. keep you doctor if you like them.
    You can keep your insurance if you like them
    Medical costs will come down
    Deficits will fall.

    .
    All of these repeated and supported by the left and yet you prattle on……

  • gysgt213

    Single payer and negotiated drug prices.

  • diecash1

    and yet you prattle on……

    Good description of what you do here……prattle on vacuously and, often hatefully, while demonstrating your complete and utter lack of integrity. You are impossible to take seriously.

  • http://derekg.wordpress.com/ Derek

    Drug prices are controlled in single payer systems through policies like bulk purchasing as well.

  • shepherdwong

    But it is fanciful: there’s simply no credible way to enact that kind of hard cap on Medicare expenditures, in a world where the over-65 population is growing fast as the Baby Boomers retire, where that generation is also living longer than ever, and where end-of-life healthcare is becoming increasingly expensive across the board.
    .
    “[H]ard cap” notwithstanding, the point is we pay twice as much as every other industrialized country for the same medical care. The fact that there’s no credible way to reduce health care cost inflation has more to do with industry’s stranglehold on government policy-making, i.e., government’s ability to negotiate fee for service, that on aging Baby Boomers.

  • freeinpa

    “Good description of what you do here……prattle on vacuously and, often hatefully, while demonstrating your complete and utter lack of integrity. You are impossible to take seriously.”
    .

    Another fine example of liberals ignoring their own moral bankruptcy while attacking someone else but avoiding what a destructive hateful bankrupt activity liberalism is.
    .

    I don’t expect liberals to take me or any conservative seriously. That is exactly why Repubs, Dems and Independents fled Obama and the extreme nonsense you propose. Arrogance wrapped in stupidity. I care less if the small minority of loud extreme folks listen. Your 15 minutes of fame is over!

  • earljr1

    Notice how the liberals have ignored this posting, newfreedom, because the facts are simply irrefutable. 111 exemptions so far, with how many yet to come? It could easily be in the thousands. As we continue peeling back the layers of Obamacare, the stench is becoming unbearable. Remember, Pelosi said it “had to pass before you could find out what was in it”…well, we are certainly becoming enlightened, are we not? The bill is even worse than we anticipated and the American public (especially our seniors) are in for some very unpleasant surprises.

  • grape_crush

    I don’t expect liberals to take me or any conservative seriously.
    .
    No, Freeper. Just you.
    .
    Leaving yet?

  • stuartzechman

    Speaking of facts, earljr1, have you ever heard of the “Resource-Based Relative Value Scale?”
    .
    Do you, by any chance, happen to use the Current Procedural Terminology (CPT) code in your practice when you bill?

  • apr2563

    http://www.huffingtonpost.com/2010/11/15/office-congressional-ethics-republican-chopping-block_n_783811.html
    More Rep hypocrisy regarding health care earmarks. Of course, it is Ensign.

  • apr2563

    Yes earljr what Stuart said.
    By the way, I worked with a brokerage and was a facilitator for patients looking for payment of their benefits. Can you list some of those CPT codes and their meaning?

  • stuartzechman

    Germany, France and Japan are highly populated, rich-as-hell OECD countries that don’t have single-payer.
    .
    They also provide as good, sometimes better health care at about half the price as we pay in the US.
    .
    We don’t have to do single-payer, we just have to stop doing the thing that’s driving up prices.
    .
    Ever heard of the “Resource-Based Relative Value Scale?”

    http://en.wikipedia.org/wiki/Resource-Based_Relative_Value_Scale
    .
    Resource-Based Relative Value Scale
    (RBRVS) is a schema used to determine how much money medical providers should be paid. It is currently used by Medicare in the United States and by nearly all Health maintenance organizations (HMOs).
    .
    RBRVS assigns procedures performed by a physician or other medical provider a relative value which is adjusted by geographic region (so a procedure performed in Manhattan is worth more than a procedure performed in El Paso). This value is then multiplied by a fixed conversion factor, which changes annually, to determine the amount of payment.

    Change the Resource-Based Relative Value Scale, and you change US health care prices.
    .
    Unfortunately, we don’t know exactly how the pricing scheme works:

    * Paying based on effort rather than effect skews incentives, leading to overuse of complicated procedures without consideration for outcomes.[3] Contrast with evidence-based medicine (EBM), which is based on outcomes.
    .
    According to this critique, RBRVS misaligns incentives: because the medical value to the patient of a service is not included in how much is paid for the service, there is no financial incentive to help the patient, nor to minimize costs. Rather, payment is partly based on difficulty of the service (the “physician work” component), and thus a profit-maximizing physician is incentivized to provide maximally complicated services, with no consideration for effectiveness.
    .
    * The regulatory committee (RUC) is largely privately run, an example of regulatory capture.[3]
    .
    * The regulatory committee (RUC) is secretive, with the meetings being closed to the public and uninvited observers.[3][4]
    .
    * The data are effectively copyrighted by the AMA, but its use is required by statute.
    .
    Although the RBRVS system is mandated by the Centers for Medicare and Medicaid Services (CMS) and the data for it appears in the Federal Register, the American Medical Association (AMA) maintains that their copyright of the CPT [Current Procedural Terminology code] allows them to charge a license fee to anyone who wishes to associate RVU values with CPT codes. The AMA receives approximately $70 million annually from these fees, making them reluctant to allow the free distribution of tools and data that might help physicians calculate their fees accurately and fairly.

    This is apparently the dark, corrupt underworld of provider price inflation, the “complexity” that’s just too complex for the political press corps to report, and for the American news consumer (who’s being ripped off) to understand.
    .
    This is where one procedure, which was $100, became divided into 20 component procedures, which then became $2000.
    .
    This is where prescription drugs stopped being Canadian priced, and started being over-priced.
    .
    This is where hospitals started charging $130 per Tylenol pill, just because they were a hospital.
    .
    This is where we’re being ripped off.
    .
    We already have price controls in the US, it’s just that nobody really knows how they happen every year, or why they set prices as high as they do, or who is even doing the setting.
    .
    We don’t (necessarily) need single-payer here in the US, we need other countries’ b>Resource-Based Relative Value Scale, and then we’ll have the same prices they have, and our people will be able to afford medicine again.
    .
    Don’t take my word for it…go ahead, click the link to Wikipedia, look at what it says, and then think about it.

  • stuartzechman

    Thanks so much for responding to commentary, Michael Crowley, it’s always appreciated.

  • piper1

    Paging Pretend Dr. Earl Jr: any response, “doc?”

  • ohiolibb

    Those facts are so pesky, aren’t they?

  • earljr1

    Stuart, I’m not sure what your question has to do with my criticism of Obamacare, but yes, RBRVS is the physician payment schedule for Medicare and it is quite low right now and about to get worse. CPT codes are for billing insurance companies and yes, of course, every physician uses them. When we bill Medicare, we use an HCPCS code. April to satiate your curiosity, the codes vary by State, but we frequently bill 176.4 for Kaposi’s sarcoma or 473.9 for chronic lung disease. We have billing clerks who actually assign numbers depending on the procedure done for an individual patient. The physician is normally spared from this tedious task. With all of this being said, Obamacare is STILL a horrible, totally inefficient bill that will leave many incredulous at the cost….to themselves, to the nation and to our existing health care infrastructure. It needs a MAJOR overhaul to correct MANY wrongs.

  • earljr1

    April, I assume that you are on Medicare and you are barking up the wrong tree. I know that you defend ANYTHING and everything the democrats do, but you are in for some major surprises with Obamacare and you are going to be most unhappy with the results. For once, you should lay partisanship aside and look at long term ramifications. Talk to your own physician, perhaps he or she, can enlighten you. Go to Docs4PatientCare.org, for more information.

  • herby002

    4. Cut down Medicare fraud:

    “Medicare Fraud Costs Taxpayers More Than $60 Billion Each Year
    In Easy to Execute Scams, Criminals Rip-Off Taxpayers, Make Millions and Run”

    http://abcnews.go.com/Nightline/medicare-fraud-costs-taxpayers-60-billion-year/story?id=10126555

    “Efforts to Combat Health Care Fraud and Abuse”
    “Health care fraud is a national problem, prevalent in federal and state as well as private insurance programs. From our work in this area, it appears that fraud is on the rise and the criminals who perpetrate it have become more organized and sophisticated. Unfortunately, no one knows exactly how much health care fraud costs this country, but we estimate it to be in the billions of dollars each year. We are responding by coordinating anti-fraud efforts across the government, and we will establish new partnerships with the private sector as part of our approach to the problem.”

    http://www.hhs.gov/asl/testify/2010/03/t20100304a.html

    “AARP News You Can Use: Urge Congress to stop Medicare fraud”
    “The new health care law passed last spring adds $350 million over the next 10 years to step up the fight against Medicare thieves and scammers. Fraudulent individuals and entities can use just one stolen or purchased Medicare number to bill Medicare for millions of dollars of services that were never actually performed.”

    http://www.dailyrecord.com/article/20101115/LIFEFRONT/101115058/-1/ENTFRONT/AARP+News+You+Can+Use++Urge+Congress+to+stop+Medicare+fraud

  • herby002

    earl,

    I didn’t comment because I’m confused about what the rant is about.

    What program/provision are these evil exemptions from?

    How would these companies, associations, union locals, etc. be harmed if they did not get the exemptions?

    Are any/all of them offering greater benefits than the program/provision?

    How does this exemption request process prove that the Health Care Act is bad?

    - Please answer each question, and try to resist using the usual propaganda phrases. Thank you.

  • Ivy_B

    Another physician opposed to government health care – except for his…

    A conservative Maryland physician elected to Congress on an anti-Obamacare platform surprised fellow freshmen at a Monday orientation session by demanding to know why his government-subsidized health care plan takes a month to kick in.

    Republican Andy Harris, an anesthesiologist who defeated freshman Democrat Frank Kratovil on Maryland’s Eastern Shore, reacted incredulously when informed that federal law mandated that his government-subsidized health care policy would take effect on Feb. 1 – 28 days after his Jan. 3rd swearing-in.

    “He stood up and asked the two ladies who were answering questions why it had to take so long, what he would do without 28 days of health care,” said a congressional staffer who saw the exchange. The benefits session, held behind closed doors, drew about 250 freshman members, staffers and family members to the Capitol Visitors Center auditorium late Monday morning,”

    .

    http://dyn.politico.com/printstory.cfm?uuid=529AD458-F859-AAB8-4D74EDC0FFA2DD0D

  • herby002

    Yet he’ll be first in line to cast his vote to kill “obamacare”.

  • christinewithregence

    Health care represents the main long-term challenge for the country’s budget. When we take control of our health care decisions, we can help control costs. Check out Whatstherealcost.org for explanations and ideas.

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