tag:blogger.com,1999:blog-8512362.post8648418065695627068..comments2024-03-10T13:59:19.230-04:00Comments on xpostfactoid: The bipartisan consensus on healthcare cost controlAndrew Sprunghttp://www.blogger.com/profile/17601269968798865106noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8512362.post-87988130456005642062014-06-27T18:36:05.759-04:002014-06-27T18:36:05.759-04:00Hi Andrew,
You continue to be a bright light in t...Hi Andrew,<br /><br />You continue to be a bright light in the healthcare cost trend world. I just had a fairly long twitter exchange with Larry Leavitt at Kaiser asking him whether it might not be time for Kaiser to relook at its model that says most of the current cost slowdown is due to the Recession. He agreed with me that Medicare is apparently very different, and is working to a different drummer than other healthcare costs.<br /><br />Medicare cost growth from 2010 through 2014 (8 months) has averaged 3.3%/year. With 3% average annual enrollment growth, that's about a .4% annual per enrollee cost increase. CBO's 2014-2024 Budget Outlook calls for 3% annual per enrollee cost growth. CBO's 2013 Long Term Budget Outlook uses 4-5% per enrollee cost growth after 2024. If that number has been .4% for the last five years, and stays in the 0-3% range going forward, our structural budget, long term debt/GDP and entitlement problems all go away. And I think there's a good chance this is the range we will see.<br /><br />Medicare is not influenced by the Recession, and there is no cost-shifting to the individual. There are some price control effects, as a 1.0-1.1% productivity factor is taken out of the annual price adjustment metric, but on CMS urging, CBO pulls this out after 2029, worrying that this would put too much pressure on providers.<br /><br />So what's happening in Medicare? The 2010-2014 have very little of this ACA inflation cost adjustment in it. No recession effects. No cost shifting. And only .4% 5 year average per enrollee cost growth, 4-5% below the long term average. What's up?<br /><br />Utilization is down, though I don't know yet how to document this. Providers are getting smarter and finding ways to treat patients in such a way that they need the provider system a bunch less. This is part of the movement away from FFS and part of all the provider payment method experiments. It's happening. And it will continue to happen, I am sure. And almost nobody is really looking at it.<br /><br />This is an emerging miracle that will herald a complete transformation of our budgetary picture. An amazin,g yet-to-be-told story!!Anonymoushttps://www.blogger.com/profile/14618261275644331394noreply@blogger.comtag:blogger.com,1999:blog-8512362.post-81819186412417386522014-06-27T05:28:32.959-04:002014-06-27T05:28:32.959-04:00Good summary.
The Republicans are a lost cause on ...Good summary.<br />The Republicans are a lost cause on this issue, and even the conservative Arnold Kling has written that consumer-directed cost control has never worked anywhere in the world.<br /><br />Why are the Democrats so unwilling to consider price setting?<br /><br />I do not have all the answers, but here are some thoughts:<br /><br />a. Even the Medicare Act of 1965, a liberal victory if ever there was one, did not consider price setting. In fact it allowed massive price increases.<br /><br />b. Democrats need political contributions too.<br /><br />c. The medical industry has accounted for a majority of new family wage jobs over the last 20 years. (see Michael Mandel article on this.)<br />Price setting would basically stop the job growth. (the job growth in health care has already slowed down with the baby steps of the ACA.)<br /><br />Bob Hertzhttps://www.blogger.com/profile/09536056115489355307noreply@blogger.com