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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: lorne who wrote (83007)	4/25/2010 8:44:49 PM
From: Hope Praytochange	Respond to of 224729

The Unbending Of The Cost Curve Posted 04/23/2010 07:07 PM ET Health Care: An analysis from an objective source — Medicare's actuary — says ObamaCare will increase costs and relies on projected savings that may be unrealistic. Now isn't that a surprise? The Obama administration has been trying hard to find good news in a new report by government experts on the outlook for the health care economy, now at 17% of GDP and continuing to climb. To HHS Secretary Kathleen Sebelius, the analysis confirms that "the Affordable Health Care Act will cover more Americans and strengthen Medicare by cracking down on waste, fraud and abuse." More neutral observers will notice that the administration no longer talks about "bending the cost curve" in health care. The analysis released last week by Medicare's Office of the Actuary tells why. It looks ahead 10 years and reaches two conclusions about the new health care overhaul: More people will be covered, and costs will continue to soar. The cost curve is unbending still. Chief Actuary Richard Foster pegs ObamaCare's added costs (that is, beyond what was projected without the overhaul in effect) at $311 billion over 10 years. That's just under 1% of overall expected health care spending, and administration officials are calling that sum a small price to pay for adding 34 million Americans to public or private insurance rolls. But the president had set a goal of extending coverage without adding any new cost. More to the point, the problem of runaway costs that plagued the pre-overhaul health care system has not been solved. As Foster points out, much of what ObamaCare proposes to reduce the nation's health tab, especially in Medicare, is politically unrealistic. The overhaul projects a net decrease in projected Medicare spending (more accurately, a reduction in future spending increases) of more than $400 billion. But Congress has talked this way before and has been notably timid about pulling the trigger. Under a 1997 law, for instance, a 21% cut in Medicare reimbursements to physicians was supposed to go into effect on April 1. But Congress two weeks later put the cut on hold as part of a bill to extend unemployment benefits. As usual, mobilized doctors and frightened seniors got their way. This pattern of avoiding politically difficult spending cuts has been going on pretty much since the start of Medicare. ObamaCare promises that this behavior will somehow change. That would be a miracle, and actuaries tend to stick with more mundane probabilities. And like any good actuary would be, Foster is unimpressed with the cost-reduction side of the ObamaCare equation. He says "the long-term viability of the Medicare ... reduction is doubtful." Nothing in Foster's report should come as a surprise, since it was clear from an early stage in the health care debate that the Democratic Party had one overriding goal — universal coverage or something close to it — with cost-reduction secondary. The cost-cutting promises served mainly to obscure the actual price tag of the overhaul in future taxes and deficits. They were a means to the end of extending insurance, and to that degree they worked — as politics. But as policy they are empty promises. Foster's study is further evidence of how badly ObamaCare missed the point. All along, high cost has been the fundamental problem with American health care; the lack of universal coverage was only one symptom. To put it another way, the problem of coverage would have been solved long ago, largely by the private sector, if the medical tab in the U.S. were more like that in other advanced nations. At 17% of GDP and rising, the nation's health care economy is a case study in how to structure incentives, price signals (if any) and buying power to maximize inflation. Those who receive services hardly ever pay for them directly, and prices are rarely revealed, much less advertised. Providers long ago learned the power of lobbying to keep the money rolling in and to defeat any attempts at fiscal restraint. What was billed as "reform," in other words, actually reformed nothing.