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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (25939)	12/25/2009 6:43:16 PM
From: puborectalis	1 Recommendation Read Replies (4) \| Respond to of 71463

"The most important source of revenue is a 40 percent excise tax on insurance plans costing more than $8500 a year for an individual. This tax represents the partial fulfillment of a longtime goal of both the right and the left. Employer-sponsored health insurance is tax-deductible, while wages are, of course, taxed. This means an additional dollar of health care benefits costs less than an additional dollar in wages—an anomaly that has contributed to runaway health care costs. Taxing high cost plans, which do not produce better health outcomes, will give employers a strong incentive to shop for cheaper plans. Either way, the government would collect revenue—either directly through the excise tax, or (better still) indirectly when employees start getting less compensation in the form of tax-free health care, and more in the form of taxable wages. According to the Congressional Budget Office, the Senate bill would reduce the deficit by more than one hundred billion dollars over the next decade. Some critics have asserted that the savings are an illusion produced by phasing in the higher taxes more quickly than the benefits, but this is incorrect. At no point do the costs exceed the savings. Indeed, the savings accelerate more quickly over the long run—CBO calculates that reform will save on the order of a trillion dollars in its second ten years. But many health care economists believe reform could save far more money that that. These hopes rest upon the final component of the bill, a series of legislative experiments large and small intended to help transform health care. Small pockets of high-quality, low-cost care, like the Mayo Clinic, exist throughout the country, but most doctors and hospitals have not embraced the methods that produce this efficiency. Health reform contains a number of pilot programs to encourage more efficient care—such as penalizing hospitals with high infection rates, an easily-preventable failure that causes 20,000 deaths a year, or various provisions to reimburse Medicare providers based on results rather than the number of procedures used. Numerous other experiments abound in the bill. The Medicare advisory commission holds the greatest potential to drive transformation of the system. Medicare has an advisory panel to proffer suggestions about more effective methods of delivering care. Say, research shows that $100,000 Medical Device X provides just as good results as $200,000 Medical Device Y. Right now, the commission will urge Medicare to only reimburse for the use of Device X, but the makers of Device Y will just go to Congress, campaign contribution in hand, and persuade them to ignore the advice. The Senate bill gives the commission far stronger powers. In any year when Medicare costs rise above a certain rate, the commission’s recommendations go to Congress for an up-or-down vote as a package. In its official budget estimates, CBO credits these experiments with virtually no budget savings. This is because the budget scorekeeper, understandably, tries to use hard data and relies upon proven success in figuring out how much money a given reform will save. There’s no way to tell which of the transformative experiments will actually take hold or what sort of effect they may have. Probably some, even many, will fail. But the bill’s potential for overhauling American medicine, while impossible to quantify, offers one of its strongest selling points. The sum total effect of this legislation is fairly simple. It would redirect a large chunk of the money sloshing around the health care system away from ineffective treatments and toward providing care for the uninsured. On top of that, it would prod the system, in dozens of ways large and small, to adopt cutting edge methods. It is not the kind of plan liberals would create if they could design it from scratch. Rather, it is a centrist compromise of the best variety, combining the ideas of the now nearly-extinct moderate wing of the Republican Party with the smartest bipartisan technocratic reforms. " -Jonathan Chait is a senior editor at The New Republic and a former assistant editor of The American Prospect. He also writes a periodic column in the Los Angeles Times.