Silver linings
There’s no reasonable defense of the substance of the debt deal on even vaguely liberal, let alone progressive, grounds. (The extent to which the Democrats were stuck with that substance because of a combination of procedural perversity and GOP lunacy, as opposed to their own ideological bad intentions and political incompetence, is a separate topic).
A couple of notes:
(1) The claim that the deal doesn’t cut Medicare benefits gets those who make it an F in Econ 101. Cutting reimbursements to providers is a functional cut in benefits.
(2) It’s unfortunate that the increasingly desperate struggle to protect the most prominent features of what remains of the social safety net obscures the fact of how deep these budget cuts are in terms of the rest of the government’s functions. As Dean Baker points out, if you make the reasonable assumption that the cuts going forward will mostly exempt entitlement programs, the military, and unemployment insurance, that means that something close to a third of the rest of the federal budget is going to get cut. It would be nice to fantasize that this consists mostly of subsidies to Archer Daniels Midland and bridges to nowhere, but in point of fact the rest of the budget consists of essentially everything the federal government does that doesn’t involve direct transfer payments or killing foreigners. Given that we’re not living in 1890 any more that’s actually quite a few things that are pretty important: education, science, environmental protection, infrastructure, health and safety, the entire federal legal system, and so on.
Now on the bright side:
(1) There seems to have been a big shift in the mainstream political discourse toward the idea that the Pentagon’s budget shouldn’t continue to grow at 9% per year, as it has over the last decade. Even a lot of right wingers are making noises about cutting military spending, although who knows how long that will last the next time somebody with an Arab name kills a white person. In any case, we’re at least at a point where Bill Kristol and John Bolton are beginning to worry that we may no longer be quite as eager to invade whatever country annoys them next week.
(2) The complete ideological incoherence of the Tea Party wing of the GOP, i.e., we need a balanced budget amendment but don’t touch our Social Security or Medicare, has had no apparent effect on its political salience. I’m growing more optimistic that Bachmann has a real shot at the nomination, and that Obama will face an opponent whose platform consists of demanding extremely unpopular cuts in government spending while launching investigations into exactly what the queers are doing to the soil.
What the queers are doing to the soil.
Some of the neighbors say Paul Campos smokes crack, but I don’t believe it.
It does need the video.
Tell me this doesn’t look like the cover of a DM album titled “Bachmann.”
I miss them.
He was a daredevil! Just like his old man.
Nice Dead Milkmen reference. Very nice.
A modest proposal:
Unless I’m mistaken, state income taxes can be deducted from one’s federal income tax up to a certain point. Since the Feds will no longer be funding a great many things that the states rely on, maybe it’s time that state legislators appealed directly to their constituents and negotiated a raise in state income taxes (or establishment of state income taxes in the first place) with the accompanying decline in one’s 1040 payment. That way, the people of Iows (for example) can make maintenance of their roads a priority (for example) and not have to get the money from the DOT. They also will not have to shell out for road work for the state of Indiana(for example) who refuse to fund their own road repairs.
Obviously needs work, but decentralization of some functions could work, and could conceivably be sold to the electorate.
Unless I’m mistaken, state income taxes can be deducted from one’s federal income tax up to a certain point.
Income, sales, and property taxes are all deductible, if ( a big if) you itemize deductions. So this idea makes taxes a bit more regressive, as the poor don’t itemize.
If you think Hoosiers are ever going to pay for something they can get the feds to do for them, you’re crazy. I think most Hoosiers are still convinced they pay more than they get back from the federal government.
Here in Washington, the first step would be to get a state income tax at all.
Funny, because there’s a lot of folks in Oregon who think we need to adopt Washington’s tax code. Ummmm…sales tax.
Why is it a “reasonable assumption” that the cuts will “mostly exempt the military?”
The last time we wound down for a global military confrontation, we cut just Pentagon spending – not including CIA, DoE, and other “defense” sources – by over 30% in real dollars. This happened under mainly Republican Congresses still in the thrall of Ronald Reagan.
I basically agree with 99% of this, but this still makes no sense to me:
“The claim that the deal doesn’t cut Medicare benefits gets those who make it an F in Econ 101. Cutting reimbursements to providers is a functional cut in benefits.”
Since single-payer systems work by paying lower reimbursements to providers, if you actually take this seriously isn’t single payer itself just a giant cut to beneficiaries?
A cut to providers within an already existing single payer system is also a cut to beneficiaries. Enormous savings in health care costs would be realized by moving to a single payer system, which the US doesn’t have outside of Medicare.
Let’s walk this through:
A health center is getting paid $2000 for a certain procedure by health insurance companies. A single-payer system is introduced and that rate is cut to $1600. This is not a cut to beneficiaries.
A health center is getting paid $2000 per procedure by a single payer system. The government cuts that payment to $1600. This is a cut to beneficiaries.
Would you care to explain further?
I’d rather see if you can figure this out all by yourself.
Unless you’re of the view that single payer only achieves savings by cutting out private profit, he’s right, it’s a distinction without a difference without knowing the specifics of the cuts.
Be careful. One of your commenters hates it when people write in a condescending manner.
(Naw, just kidding. You won’t hear a word.)
@ Paul.
I do think Paul is often condescending. I’ve said so in the threads where he is at his worst, the infamous BMI threads.
And I only call you out on topics where you are at your worst. But you go into aggressive-condescending mode at the touch of a hat, so that means I say so more often.
And now you are making the thread about how people treat you. Again.
You have written far more about me on this thread than I have.
Please stop that, and talk about the issues. It degrades the quality of the discussion when you do this.
Do not degrade the thread further by responding with another meta comment about me. Let’s just let it go.
You have written far more about me on this thread than I have.
Bullshit. I have not, and you are simply being narcissistic, again. You want threads to not be about you? Don’t make them about you.
Ever notice nobody every says that a thread is all about Doc A, or Walt, or hv, or me, or pretty much any regular except for you and Brad Potts?
Keep projecting.
I know you feel that way.
Read the comments, and count.
BTW, there is no part, no subthread, of this thread that is about me, except this one where you just had to make your meta remark.
Everything else on the thread, except what appears after your comment, is a substantive and interesting discussion of the issue of Medicare payments.
This is, actually, one of the most interesting and substantive discussions we’ve had in while here. Except this part, where you’re talking about me and your old gripes and, until the end of this comment, I’m replying to you.
And now I’m going to let you get in the last word, and hope that you’ll stop.
Well, not just private profit, but also the costs involved in the duplication of various administrative tasks.
I’ll admit that health care economics is not my area of expertise, and I don’t really know off the top of my head if health care is one of those industries that enjoys economies of scale … but from a cursory glance it looks like it might be.
Dodge.
Because now, the health-care center has the option of moving out of the “single payer” system, and dealing only with other payers.
I would not characterize Medicare as being truly single-payer. I would call it a whomping big, not-for-profit insurance network. And if it is the stingiest network, even if it is whomping big, there comes a tipping point where dealing with other networks, however smaller they may be, is more profitable.
An option they will avail themselves of if the higher rates they can bill makes up for the lower volume of procedures.
Whether and how much this would happen is a function of the specifics of individual cuts, not a hard-and-fast rule. There’s a reason why the field of economics goes beyond the broad generalizations in the first chapter of Econ 101. Details matter.
There’s a reason why the field of economics goes beyond the broad generalizations in the first chapter of Econ 101.
That’s fair, and I don’t disagree.
The first instance is a cut to beneficiaries, as the health center is likely to refuse to accept that single-payer system. One sees this in the UK, for example.
However, you’re missing the entire point of the single-payer system and what’s happened with Medicare. The private insurer tells all of the health center in the area that what they will get paid for procedure X is $2000; what they actually give the health center is considerably less than that, because they charge for their administrative overhead (which Medicare does not); additionally, the private insurer has layers of lawyers and administrators making sure that they pay not a cent more than they can get away with (including shirking their legal obligations) and very expensive executives. Finally, the private insurer can kick loose insured people who have already paid on numerous grounds (the famous “preexisting conditions” dodge), while medicare must take all comers. Meanwhile, Medicare was previously famous for paying reliably–not generously, but reliably. That is no longer true in these budget-cutting times.
If you have a true single-payer system, where exactly do providers go if they won’t accept clients of the only insurer in the game?
Outside the system.
Where is this “outside of the system?” If coverage is universal, everyone is inside the system. I guess there could be something of a market doing concierge work for people who can pay out of pocket above what the insurer covers, but it probably can’t be a very large market.
It is nonetheless a market. Again, look at the UK.
If postal service is universal, how could FedEx exist?
Because FedEx does some things the postal service doesn’t do, or doesn’t do as well. But in so much as the package delivery industry in the U.S. seems to function pretty well, I don’t really get what the point of this is supposed to be.
The point is that private enterprise will provide services unless specifically prevented from doing so. “Outside the system” is just that: take you cash and see someone who will accept it so that you don’t have to wait in line. In the UK, which has the NHS, there are private docs and even private hospitals that have opted out of the NHS system. Unless you force providers to participate, some will opt out.
This is too broad a generalization. Does the first dollar in every rate-reduction for every procedure result in less care?
As always in these “You need to take Econ 101″ arguments – and believe me, you see them a lot when you read libertarian web sites for years – the issue not whether one understand the Demand Curve, but the complicating factors that make the broad rule that everyone understands already more applicable and less applicable in different circumstances.
Are doctors’ offices going to leave their examination rooms empty rather than accept lower payments? At the first dollar in cuts? For every different billing code? Of course not.
Tarzan swear he not write this way to make point.
First, what you don’t seem to get is that margins in health care at the primary-care level are very, very thin. My clinic loses money reliably; it is one of the reasons that the corporation that owns it and my hospital can claim to be a non-profit. In a typical low-end primary-care practice, half of the patients are money-losers. They cost more to care for than they bring in, once you factor in personnel costs (’cause those insurers aren’t going to bill themselves), insurance (‘cuz everybody gets sued eventually), tax and licensing (‘cuz we gotta be on file with the city, the county, the state, the feds, and two or three non-governmental agencies) and the amount of time it takes to care for them.
Large, well-financed tertiary-care hospitals can wring out quite a bit of profit from Medicare–because they can bill for complicated procedures, which pay well. That’s not the bulk of the care delivered, though.
Doctors’ offices are already closing due to freezes in reimbursements. Patients are already being turned away. It’s not like this is a state secret.
“My clinic…”
Ah, well there we have it.
“My clinic” meaning the one at which I work; you may have noticed the reference to the corporation that owns it and employs me. See, we take care of poor kids, most of whom are on MediCal, our state’s version of Medicaid, and more than a few of them are undocumented, so they are entirely uninsured.
But yeah, what an asshole I am for not turning a profit on that patient population.
Please stop with the “You don’t seem to understand” talk. It degrades the quality of the discussion.
See, there you go: that’s the type of useful, fine-grained detail that is helpful in discussing these matters. Primary care reimbursements rates are not a good place to look for savings, because the thin margins make it likely that continuing to provide treatment for lower payments will be uneconomical.
Fine.
Aha! Look at that! And if reimbursements were reduced to the particular clinic you have in mind by, say, 3%, what do you think they would do? Would that work the same way as making the same % cut to the clinic you work in?
Or is talking about “cuts” as some undifferentiated blob a bad idea?
When you have specific cuts in mind, bring cuts to the table. Otherwise, politics tends to favor the well-connected, and the tertiary-care centers don’t suffer the cuts; the primary-care providers do.
Talking cuts before the plans have been written almost always results in primary-care cuts.
Fortunately, we have people who do that sort of thing for us. MPAC, for instance.
Your trust in them is sadly misplaced, I fear. Further, I doubt that they have a set of cuts and a plan ready to go to suit the Boehner budget. The cuts were pushed through and accepted without a plan being in place. This is akin to being pushed out of an airplane with a large roll of nylon fabric, a sewing needle, and a spool of cord with the expectation that you will fabricate a parachute before you hit the ground.
Here’s a thought, in light of that sad situation: perhaps repeatedly sending the message “All provider cuts are the same and will have the same effect, so it doesn’t really matter what the details are” is not the most strategically brilliant move for someone in your position to make, then.
I would only say that cuts to medicare can could probably create some pretty disturbing and inefficient disparities and disruptions in medical care. If there becomes a sizeable disconnect between employer or subsidized individual plans and medicare, then the margins of medicare acceptance could shift quite a bit.
Of course, I think this gets into something similar to the Laffer curve argument, where in the abstract the idea is likely true, but no one really has any sort of clue where the optimal level is or whether we are anywhere near it. Its just an argument in support of another, related opinion.
I also want to see the rectification of the concern for this medicare cost control and likely shortages caused by single-payer cost controls.
That’s me
not sure that statement is true
certainly it has been studied
Brown, C. (1988) ‘Will the 1988 income tax cuts either increase work incentives or raise more revenue?’, Fiscal Studies 9.
Lindsey, L.B. (1987) ‘Individual taxpayer response to tax cuts: 1982 1984’, Journal of Public Economics 33.
Stuart, C.E. (1981) ‘Swedish tax rates, labour supply and tax revenues’, Journal of Political Economy 89.
and several more recent ones.
DeLong.
Uh huh. And magic unicorns.
Because dammit, we’re Americans, we’re exceptional, and we can fuck up something every other industrialized nation can pull off!
Just because single payer systems are far cheaper and produce better results doesn’t mean they’re superior to our “system.” I’m sure David M. Nieporent can explain why.
Since single-payer systems work by paying lower reimbursements to providers,
Insurance company profits and overheads are not “providers.”
That said, there is some actual squeezing of providers in single-payer. Hence the largely apocryphal stories of Canadians seeking non-critical care in the US.
Well yes and no. Obviously single payer skims off the private inefficiency, but is also uses it’s market share to pay lower reimbursement rates and so on. And I’m not arguing against it by any means, I just find the comparison pretty silly.
Oh, there are indeed Canadians seeking non-critical care in the US; I’ve treated some. There are also at least as many US citizens seeking care (critical and otherwise) in Canada. See, getting an appointment with a dermatologist to have that wart looked at in Calgary will take some time, while you could get it done in a jiffy here–provided you’re paying cash or very well-insured. Contrariwise, getting authorization from a US insurer to have even routine stuff done takes a great deal of time and effort. The US system works very well if you are wealthy; the Canadian system works very well if you are willing to put up with having your non-emergent problem temporarily sidetracked.
There are also at least as many US citizens seeking care (critical and otherwise) in Canada.
I know. I have a friend who emigrated to Scotland, and flies his upstate New York father over for dental care.
Even Sarah Palin sees the wisdom of going to Canada.
That’s not how single-payer systems work, Mr. Jackson. They work by removing layers of executives and administrators, not providers. Once you make a big chunk of the billing department unnecessary, you realize savings. Once you show CFOs with seven-figure salaries the door, you realize savings.
Seriously? You actually believe that? Really?
Seriously? You actually believe that single payer systems don’t have lower administrative costs? You actually believe that? Really?
No, I do believe they have lower administrative costs. But that’s far from the only thing that makes them cheaper, and it’s really not even the primary factor. I was responding to the implied argument that this is the ONLY way they reduce costs.
Actually, Mr. Jackson, as far as I know, lower administrative costs are the primary reason that single-payer systems are cheaper. If you have some evidence to the contrary, please share.
http://tinyurl.com/3dolfds
In other words, you got nothin’. Meanwhile, I looked at a few of the things that your Google search turned up, and found this:
By having one organization handle all of the bureaucracy and all of the administration of the health care system (mostly consisting of paperwork and payments) paper-pushing greatly decreases in frequency and cost. More of each of our dollars that go toward health care would actually be used to care for people’s health, instead of going toward managers and forms. Single-payer eliminates the bulk of paperwork duplication, and in the process, could potentially save hundreds of BILLIONS (that’s 100,000 million) of dollars. As it is right now, American businesses are at an economic disadvantage, because their health costs are so much higher than in other countries. The Canadian branches of Ford, GM, and Daimler-Chrysler all publicly support Canada’s health care system, because it saves them an enormous amount of money, compared to their counterparts in the US.
Well no, in other words it isn’t my job to do research for you.
And your post is a red herring, since I never said single-payer didn’t do any of that. It does, and it also uses it’s dominant market share (and legal authority, at that) to set lower payment rates for providers than private insurance can. Ideally, it also uses its resource advantage to engage in more comparative effectiveness research to avoid wasting money on non cost effective treatments. All of which represent cost savings through paying providers less that don’t significantly impact beneficiaries.
If you think private insurers can’t set the lowest rates (or simply refuse to pay) you haven’t studied much about private insurers. Sicko dealt with this problem, in part: private insurers also have market clout, and can lower reimbursement unless the federal or state government stops them from doing so–which doesn’t happen often.
As far as “comparative effectiveness research” (what we docs reflexively call “evidence-based medicine”), everybody’s into that, most especially private insurers. Kaiser is probably the largest producer and consumer of said research. remember: everybody’s trying to squeeze more out of the system, not just the feds.
If private insurers can set lower rates, why don’t they? The less they pay to providers the more they keep in profit.
They do.
Don’t providers actually get paid less in single-payer systems? That’s certainly my impression.
Nope. I work with Canadian dos who do what I do and get paid more. I’ve worked with vacationing Brits who get paid the same.
doesn’t it depend on whether you’re a specialist or a general practitioner though?
My understanding was that family docs and general practitioners in Canada, the UK and the US are all pretty similarly paid, while the specialists in the US make a lot more money than their counterparts in other countries. Is this claim accurate?
That’s my understanding. Generalists like myself are lowest-rung in the US, and get paid accordingly. The spread between generalists and speicalists narrows considerably in single-payer systems. This has a number of salutary effects, including keeping down the number of unnecessary procedures–because the high-tech, tertiary-care stuff is not favored as strongly as it is in the US.
Now I recognize the problem of bloated overhead and marketing schemes in private health insurance markets, but how can you pay attention to anything related to military spending, current US gov’t health care spending, or this whole debt-ceiling kurfluffle makes you so sure that the state administration of health care would be so much leaner, especially long term?
Because both Medcare and the Veterans’ Administration heathcare system maintain administrative overhead of less than five percent, while outfits like Humana run well above fifteen percent.
The private sector has already shown itself to be wasteful and bloated.
Where have I heard this argument before?
If we cut subsidies for oil companies, it will just mean consumers pay more. Every penny, no matter how the cuts work, will be passed on.
Pat pat pat, yoo need to take Ekon 101.
Except oil is subject to supply and demand in a normal, albeit very inelastic, market, while health care really does not work that way. You look for cheap gas. You do not look around for cheap appendectomies.
Pat pat pat, you need to think about markets and consumption in an non-condescending way.
Reimbursements to providers have nothing to do with consumer behavior. This is a good point for a lot of arguments about health care spending, but it really doesn’t have anything to do with what a clinic would do if it can bill a procedure at $1100 instead of $1200.
Pat pat pat, perhaps the best way to keep condescension out of this discussion would be to avoid the “Econ 101″ cliche. I’m not the one condescending to anyone.
Perhaps Joe can imagine what he’d say if a Republican President had presided over such cuts to providers. If he considers that thought experiment, I’m sure he’ll be able to see what’s wrong with them fairly quickly.
Easy: let’s see the details.
I am probably the person on this board whose opinion varies the least on policy proposals depending on which party makes them.
No, that would be soullite. Whatever happens, he’s against it.
According to OMB, Medicare “improper payments” were $47.9 billion in 2010, but some of these payments later turned out to be valid.
Would an investment in the Medicare Fraud Task Force that was estimated to net out as a $25 billion annual cost savings be “a functional cut in benefits,” or did I fail Econ 101?
but some of these payments later turned out to be valid
Meanwhile, the docs and the clinics and the hospitals that provided the care that was initially judged fraudulent had to give the feds back the money. That’s money that goes to rent, and utilities, and staff. You get the idea. Those docs, and those clinics, had to do things like fire staffmembers, cut hours, and turn away patients. Yeah, that’s a functional cut in benefits right there.
So your argument is that government run insurance plans trying to make sure they aren’t defrauded is cumbersome on providers and beneficiaries, so we should…what? Get rid of the government insurance? Not concern ourselves with providers committing insurance fraud? I’m not getting what this has to do with anything.
So, therefore, the doctor writes, there should be no effort made to reduce fraudulent billing.
The existence of regulatory and compliance burdens is not a reason to do nothing about fraud. Not in the health care industry, not in any industry.
No, that is not what the doctor writes, though I have no doubt that it is what you read. What the doctor wrote is that Medicare efforts to unearth fraud have landed disproportionately on those least able to defend themselves (like law enforcement generally, but I digress), and that fraud-abatement programs can end up costing money if they’re run badly.
How about this: if you’re accused of fraud, you have to pay back the money once the investigation has been completed? Y’know, when the charges have been proved?
Sounds good to me.
That also sounds like the sort of change that could improve relations between enforcement and providers, and make the honest doctors more willing to identify the crooks.
Restore the Medicare budget and freeze further cuts, and the fraud squad won’t have such a strong incentive to squeeze people.
…and also have less of an incentive to prevent fraud from diverting funds from people who need them.
“So, therefore, the doctor writes, there should be no effort made to reduce fraudulent billing.”
Then specifically fund the fraud squad so that they have no incentive to squeeze.
Again, clumsy cutting–which is what we’ve been treated to, again and again, with no evidence that further cutting won’t be ham-handed–creates many, many more problems than it solves.
Indeed, I made precisely that recommendation earlier.
Indeed. It’s important to beat back the idea that blunt, across-the-board cuts are the only way to think about this.
I do believe we’ve reached a meeting of the minds!
1 isn’t clear to me at all, even on the basis of Econ 101. Medicare is an oligopsony buyer of health care, and health care provision in the US is pretty inefficient. You probably could cut pay to providers without cutting health care outcomes, and if anyone is in a position to do it, it’s Medicare.
I’m not saying that it will work out that way; just that there’s no way this is an F argument. I’m sure it will lead to some cut in benefits, but it’s not guaranteed to lead to a one-for-one cut in benefits, or anything close to it.
Exactly. It’s not possible to have the discussion without knowing what the cuts are. I’m sure they probably won’t be good, but just saying that cuts to providers are always cuts to beneficiaries is wrong. Which you should pretty much know based on the fact that it’s straight out of the Sean Hannity School of Economics.
The trick is that “it” is actually “they.” “Medicare reimbursements” and “cuts in Medicare reimbursements” are not some unitary blob, alike in every root and branch, to be considered without regard to details.
Making a broad generalization about what any-and-all cuts in Medicare reimbursements would or wold not do is a Hannity-ish Econ 101 conflation.
I sure hope Paul has never written anything negative about Betsy McCaughey.
I was making the former claim. The latter would be an absurd strawman argument.
I’m not trying to attribute a strawman argument to you. But if the cuts in benefits are like 0.01%, then who cares? The question is if they’re big enough to matter, and even on an Econ 101 basis it’s not clear that they will be.
In theory this is true, but in practice, given the structure of Medicare, cuts to providers that are big enough to generate the kinds of cost savings mandated in this bill are certain to have significant effects at the margin on beneficiaries, especially in terms of access.
How significant those effects will be is of course a difficult question to answer ex ante.
I shouldn’t have phrased my initial point in a way that would lead to another JFL thread-derailment though.
So then you are of the view that comparative effectiveness research is equivalent to death panels then?
No I’m of the view that this deal will result in some reduction of benefits under Medicare.
Well probably, but that’s a far sight different than your general “cuts to providers always equals cuts to beneficiaries” claim.
Cuts to providers always generate some cuts to beneficiaries. The relationship in the size of the cuts will vary a lot. I believe in this instance they will be non-trivial, which is relevant to the claim that this deal does not include cuts to beneficiaries. If the relationship is non-trivial in this instance, then the deal does include cuts to beneficiaries.
“Cuts to providers always generate some cuts to beneficiaries.”
No Mr. Hannity, they do not. Saying it over and over again will not make that any more true.
Providers internalize 100% of (non-trivial) cost increases about as often as they pass on 100% of non-trivial cost increases to beneficiaries, which is to say that neither hypothetical is at issue here.
What cost increases are we talking about here?
And I may be wrong, but I’m fairly certain most states, and certainly medicare, have regulations limiting what providers can charge above the reimbursement to in-network patients.
Meanwhile, rent, utilities, taxes, licensing, regulatory fees, personnel costs, and so on continue to go up.
Do you run a business, Mr. Jackson?
As a point of information, the Medicare provider cuts included in the trigger are capped at a 2% reduction from current rates.
As a point of information, the Medicare provider cuts included in the trigger are capped at a 2% reduction from current rates.
And my question from the last time you quoted this remains unanswered: if this 2% after adjusting for inflation and demographic changes, or unadjusted?
Seriously, I’m not snarking, and this is a genuine question, because adjusted or unadjusted makes a whomping big difference to the discussion.
Actually, since it’s a one-time change, I don’t think the difference is that significant. There’s no compounding.
Okay, so if funding is frozen at 98% of current levels in nominal, population-constant terms, but medical inflation is 2% annually, and growth in Medicare-eligible people is also 2%, then in 19 years, you have cut reimbursements by 50%. If both grow by 3%, it only takes 14 years to cut reimbursements by 50%. At 4% (and keep in mind that right now no baby boomers have entered the system, so we can easily have an explosive growth in population), it only takes 10 years before we have seen a 50% cut.
I’m not saying that is happening, but I’m saying it really matters whether your 2% figure is adjusted or not. And I’m still not clear whether or not it is.
Keep in mind that not adjusting for population growth is standard conservative procedure: “ZOMG! State and federal budgets have doubled since 1970! Leviathan is upon us! Socialism!!!”
I’ve seen nothing to suggest that there is a freeze included in the trigger, but a one-time year-over-year cut.
So, Brad DeLong calls out Tyler Cowen, because Cowen is discussing nominal, non-per-capita numbers here. As far as I see, Cowen is doing what many are, and DeLong is correct: that makes these numbers bullshit, and the cuts much bigger than is being admitted.
That reduction is on top of a freeze that has gone on for the last five years.
No increase for inflation plus a cut.
But hey, we’re all filthy rich, so what the hell?
Actually, you are the one talking about “we all.”
I’ll point out once again that discussing this issue without taking important difference into account is a bad idea.
Until I see cuts that are targeted only at tertiary-care centers and specialists, it would appear that I am accurate in talking about “we all”, mock-Southern as that may sound.
No, it would appear that you’re talking through your hat.
In the reality-based community, we acknowledge not knowing what we don’t know.
In the reality-based community, we acknowledge not knowing what we don’t know.
Clearly you’re not referring to yourself, as you keep talking about what the cuts are going to be without knowing the first thing about the specifics.
But do go on. I wouldn’t want to interrupt your momentum.
I’ve not written a single word about what the cuts are going to be. I’ve written quite a bit about the need to discuss what the cuts are going to be, and the need to carefully decide what the cuts are going to be…but I haven’t written a single word about what the cuts are going to be.
Me:
Doc:
Okay, dude.
No, you’ve just advocated making the cuts blindly. ‘Cause, after all, there’s lots of fraud and waste to cut, right?
I’ve done no such thing. I’ve explicitly stated exactly the opposite. Repeatedly, using many different examples.
You and your straw man have fun together. Don’t pretend what you’re writing has anything to do with what I’ve argued.
Oops.
Me:
The trick is that “it” is actually “they.” “Medicare reimbursements” and “cuts in Medicare reimbursements” are not some unitary blob, alike in every root and branch, to be considered without regard to details.
Doc:
I can see you’ve worked youself into a lather, and I’m really not interested in continuing a conversation with you when you get like this.
Go ahead and have the last word.
Actually, I’ll let you have the first word:
Overlords in white coats can threaten to go Galt all they want.
Ever-increasing Medicare payments need to be curtailed.
That’s what got this whole ball rolling. Very specific in your recommendations there.
Huh.
All this time, I’ve been using the word “specific” wrong.
Paul, with respect to the Teabaggers, there’s noise out there in the editorial pages of America that this may have been their one and last gasp, that they shot their wad because of their tantrums and the fact they nearly destroyed the national credit rating and consciousness.
2012 will not be kind to them. They won, but a Pyrrhic victory.
But its funny to read how butthurt many of them are. I think they know that they really lost.
Please be right.
And yet, if you read a lot of liberal blogs, you’ll find statements like “Teabaggers are celebrating” and “The Tea Party got what it wanted.”
Well they did, they’re just too stupid to realize it.
Teabaggers actually wanted a default, so far as I can gather. Because they’re insane.
From what I could tell, most of them had no idea what the debt ceiling was or what a default actually meant so increasing the debt ceiling is inherently bad. Because it has “debt” in it. And any plan that any Democrats vote for or that Obama might possibly be able to tolerate is bad. I hope you’re right that they’ve damaged themselves politically with all but the crazy/dumb but where they did win was getting people to believe that the deficit is a crisis and making everyone/everything stop for a week to focus on it. They won in terms of policy and agenda setting but may have damaged themselves in the process.
They got a BBA?
Yes, this is anecdata. Also, Medicaid is not Medicare. I get that.
But it seems there are limits to squeezing providers.
Nonsense! Fraud! Waste! Going Galt! Comparative effectiveness research! Targeted cuts!
Just don’t get into an accident in that part of new Hampshire.
Just don’t get into an accident in that part of new Hampshire.
Nashua is about as urbanized and modern as New Hampshire gets. It only gets worse as you go north.
Look at Obama’s poll numbers. Look at GDP growth over the last two years. Look at unemployment numbers. And finally, look at wage ‘growth’.
Praying for a Bachmann nomination isn’t praying for a Obama to eke out a win, it’s praying for a Bachmann presidency.
Much as I hate agreeing with soullite, I must admit that the belief that there is such a thing as a completely unelectable Republican is simply not true. In this environment, any Republican could win.
Picture, if you will, a righty blog in 2007: “Those Democrats are going to run a colered feller with a Jewish first name, a Muslim-sounding middle name, and a last name that sounds like “Osama”? We’ll just say he’s really a Muslim, wasn’t born in the USA, and is some kind of socialist, and we can’t lose!”
If 49% of the electorate correctly believes that Bachmann is batshit insane, but the other 51% vote for her because the economy sucks and they are pissed off, we’ll say hello to President Bachmann. I think there is a non-zero chance of that.
It doesn’t even need to be anywere near 51%.
In an election with strong turnout, 30% of the electorate don’t vote.
So already we’re talking just 36% of the electorate to get a majority of the popular vote.
Also: the Electorl College probably favors Republicans.
And we’ll see levels of disfranchisement far higher than in 2008 or 2004.
Actually we haven’t had a presidential election with even 60% turnout since the 1960s (2008 was the highest since then, at 56.8%).
I don’t think the optimal GOP candidate is the least crazy one though. Crazy is a big negative, no doubt, but personally I’d rather take a 15% chance of Bachmann getting elected than a 40% chance of Romney, even though I would prefer Romney to Bachmann.
My enthusiasm for Bachmann is based on a belief that her chances of election would be quite low, although a long way from zero.
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She may be crazy, but she is both organized and disciplined. She is a focused type of crazy.
I’d prefer the crazy, lazy, undisciplined, openly-grifting Palin.
She is certainly an able political strategist and campaigner. She’s demonstrated that in several elections in a non-red district.
It’s odd to see soullite as the voice of reason, but he’s got a much better grip on reality here than all of the people who think the 2010 Congressional election results were primarily about Democratic messaging.
Stopped watches, and all that.
And if 2010 was about economic fundamentals (and I agree it was), then what gives you optimism for 2012? Job growth is not keeping pace with population growth. Consensus for July is 77K added, and I’m taking the under.
Presidential year elections have a more Democratic turnout that off-year elections.
Obama, personally, himself, not the Democrats in general, has consistently out-performed where he “should” be given economic conditions.
That said, I’m less optimistic than I was in the spring. The pace of recovery has slowed since then.
This.
We should all be hoping for the least crazy GOP nominee.
I know most of the comments above are about Medicare, but any silver lining on this deal is that you can’t vote on rules in 2011 to a budget in 2021. Considering that the the biggest cuts are backloaded until then, I don’t see why any future Congress would value this anymore than the paper it is printed on.
The only thing to focus on now is the 21 billion for FY2012 and the 42 billion for FY2013 plus whatever SUPERCONGRESS wants. These are relatively small numbers in terms of the overall budget, but it basically means the federal government is firing and not hiring, and the deficit reduction effect of this is so small as to be laughable.
These truly are sociopaths from the Congress to the White House cutting off aid in the middle of a fire engulfing the country. ‘They’ll just have to learn to walk off that 3rd degree burn. Let’s go golfing!’