Medicare


Hewitt Lecture: "The Future of Medicare and Medicaid"

Last month I had the honor of participating in a discussion with former CMS administrator Dr. Donald Berwick as part of the Pioneer Institute’s annual Hewitt Lecture Program. The video of my remarks is below, and Dr. Berwick’s remarks and the discussion between us (moderated by former CMS administrator Tom Scully) are available on video here.



posted by James C. Capretta | 12:13 pm
Tags: Medicare, Medicaid
File As: Health Care

Exposing the Medicare Double Count

Charles Blahous and I have a new column in the Wall Street Journal on how Obamacare tries to double-count certain revenue to twist its budget figures:

One of the enduring mysteries of President Obama's health law is how its spending constraints and payroll tax hikes on high earners can be used to shore up Medicare finances and at the same time pay for a massive new entitlement program. Isn't this double counting?

The short answer is: Yes, it is. You can't spend the same money twice. And so, thanks to the new health law, federal deficits and debt will be hundreds of billions of dollars higher in the next decade alone....

You can read the rest of our explanation of the Obama administration’s fiscal obfuscation here.

posted by James C. Capretta | 3:05 pm
Tags: Obamacare, Medicare, double-count
File As: Health Care

The Medicare Trustees’ Report and the $8.1 Trillion Double Count

I have a new post up at the Weekly Standard blog on the recently released 2012 Medicare and Social Security trustees’ reports:

The other important story with respect to Medicare’s finances isn’t covered at all in the trustees’ report.... That’s the double counting of Medicare tax hikes and spending cuts in the Obamacare legislation.

Earlier this month, Chuck Blahous, one of two public trustees for the Medicare program, brought renewed attention to this subject when he released a paper documenting the double count and quantifying its impact on the federal budget. According to Blahous, when cost estimates are adjusted to remove the effects of double counted Medicare “savings” provisions, Obamacare increases the deficit by as much as $530 billion over ten years....

You can read the rest of post here, and see the trustees’ reports here and here.

posted by James C. Capretta | 11:15 am
Tags: Medicare, double-count, Medicare Trustees
File As: Health Care

Discussing Medicare

Yesterday, I had the pleasure of participating in a forum at the American Enterprise Institute entitled “The Future of Medicare: A Reality Check.” The session focused on the 2012 Medicare Trustees’ Report and began with a presentation from Richard Foster, the Chief Actuary of the Medicare program. I was joined on the panel by Norm Ornstein of AEI, Bob Reischauer of the Urban Institute, Gail Wilensky of Project Hope, and Wendell Primus, who is a senior advisor to House Minority Leader Nancy Pelosi. (The event video can be found here).

I focused my comments on what I called the $8.1 trillion Medicare double count in Obamacare (the subject of my most recent blog post).  My remarks precipitated a mini-debate with Wendell Primus over the issue; in the video linked above, that part of the session begins at about the fifty-minute mark.

Our panel was preceded by remarks from Senators Tom Coburn and Richard Burr on their Medicare reform legislation.

posted by James C. Capretta | 5:33 pm
Tags: Medicare, double-count, Medicare Trustees, Richard Foster, Robert Resichauer, Wendell Primus
File As: Health Care

The Case for Reforming Medicare with Premium Support

Over at economics21, I have a new paper on how Medicare can be reformed with a concept known as “premium support”:

To see the value of premium support as a reform concept, it is necessary to understand how Medicare works today, and especially the role that Medicare plays in today’s inefficient arrangements for delivering health care services.... The primary problem is that health care in this country is highly fragmented and uncoordinated. In the main, physicians, hospitals, clinics, labs, and pharmacies are autonomous, financially independent units. They bill separately for the services they render to patients, with very little need to coordinate with anyone else in the system. The result is an incredible level of duplication and waste, overemphasis on procedure-based medicine, as well as burdensome paperwork, excessive bureaucracy, and a lack of accountability for the all-too-frequent cases of low quality care....

Premium support provides a ... vision for how to bring about “delivery system reform.” Instead of relying on the government’s capacity to re-engineer how doctors and hospitals are organized and provide care, premium support relies on a decentralized process of consumer choice and vigorous price and quality competition among the plans providing coverage as well as among those providing services directly to patients. The idea is to give the program’s participants strong financial incentives to gravitate toward arrangements that can deliver high quality care at the lowest possible premium.

You can read the full paper here.

posted by James C. Capretta | 11:11 am
Tags: Medicare, premium support
File As: Health Care

The Case for Competition in Medicare — A New Backgrounder

I have a new background report available at the Heritage Foundation on why Medicare reform should be market-based:

Recently, proposals have been advanced that would bring market discipline to Medicare by converting the program into fixed premium assistance instead of an open-ended, defined-benefit entitlement. These reforms are designed to harness the power of competition to increase efficiency in the Medicare program.

These reform plans have met with fierce criticism in some quarters. A primary argument of opponents is that government-led efforts will work better than competition to control costs without compromising the quality of care for patients. However, a careful review of the history of Medicare and other programs shows that this criticism is wrong. Competition can bring more discipline to the program, whereas the alternative—top-down price controls—will seriously erode the quality of care that seniors and other patients receive....

Read the whole report here (in PDF here).

posted by James C. Capretta | 4:48 pm
Tags: Medicare, markets
File As: Health Care

Tinkering With What Works in Medicare

I have a new report up at The Heritage Foundation on efforts to tinker with the Medicare Part D drug benefit program: 

Over the past several years, one small corner of America’s vast entitlement superstructure — the Medicare drug benefit — has been working well, satisfying program participants, and holding cost growth to a bare minimum. This is unheard of in the entitlement arena, where cost overruns are the norm. Naturally, encountering that kind of success, some politicians — especially those who had nothing to do with making sure it was properly designed — now want to change it....

You can read the whole article here (PDF here).

posted by James C. Capretta | 2:56 pm
Tags: Medicare, Medicare Part D
File As: Health Care

How Should Washington Control Medicare Spending?

On May 19, I participated in a public forum in Washington, D.C., sponsored by the Heritage Foundation, called “How Should Washington Control Medicare Spending?” My remarks focused on why a market-based reform of Medicare would be far superior to government-imposed cost controls. A transcript of the event is now available here, and the video is here. My slides are also available here.

posted by James C. Capretta | 1:13 pm
Tags: Medicare
File As: Health Care

Why the Still-Looming Debt Crisis is a Health Care Crisis

Yuval Levin and I have a new article up at The Weekly Standard on why the debate over spending cuts versus tax increases doesn¸’t get to the root cause of the still-looming debt crisis — namely, spiraling health-care costs:

Simply put, our coming debt crisis is a health care cost crisis. In 1971, the government spent 1 percent of GDP on Medicare and Medicaid. Four decades later, spending on these two programs has more than quintupled to 5.6 percent of GDP last year. In its latest long-term outlook document, published in June, the Congressional Budget Office projected that spending on these programs, and on the new entitlements created by Obama-care, will reach 10.4 percent of GDP by 2035 and 13 percent by 2050. In the meantime, all other government spending combined (including Social Security, defense, domestic discretionary spending, and everything other than interest on the debt) will actually decline, from 17 percent of GDP today to 14.6 percent in 2035 and 14 percent in 2050....

[President Obama’s proposed cuts to Medicare] might produce marginal savings for a time, but they would not come close to addressing the heart of the problem. They would lock in place the immensely inefficient open-ended payment structure of Medicare (which is the chief driver of health care cost inflation) and the new health care law’s architecture, with the federal government calling the shots in the health sector. Under such circumstances, cost cutting can only be achieved at the expense of quality care​ — ​and even so it rarely happens. Worse yet, such trivial steps would make real reforms less likely, by letting our leaders persuade themselves they have dealt with entitlements when in fact they would have only bought a little time.

To fix health care and the federal budget, reformers must set their sights on a much more fundamental shift, away from central planning and toward a genuine marketplace in health care ​—​ with cost-conscious consumers subjecting insurers and providers to competitive pressures.

Read the whole article here.

posted by James C. Capretta | 1:15 pm
Tags: debt, Medicare
File As: Health Care

Budget Danger Ahead

I have a new article up at National Review Online on why danger lurks for Republicans, and the nation, in the debt-ceiling showdown:

Democrats want a deal that doesn’t give an inch on what really matters to their voting base — which is the entitlement status quo....

To further that goal, the president and his allies are playing a familiar card. It’s not that they are against entitlement “reform,” they say, it’s just that they want to protect the beneficiaries from any financial sacrifice. And so we learn in recent days (see here and here) that Democrats are willing to put sizeable Medicare and Medicaid “cuts” on the table....

These kinds of changes in Medicare and Medicaid are nothing new. Various versions of them have been included in every budget deal going back 30 years, and most especially in the bipartisan deals of 1990 and 1997. They do not constitute genuine entitlement reform. They will not fix Medicare and Medicaid. And they will not solve the nation’s budget problem....

Read the whole article here.

posted by James C. Capretta | 5:09 pm
Tags: budget, debt ceiling, Medicare, Medicaid, Republicans, Democrats
File As: Health Care

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