Do Obamacare's defenders hate seniors or doctors (or both)?

New York Magazine writer Jonathan Chait recently responded to my extended piece in The American and subsequent suggestion that he and other progressives such as Rachel Maddow and Rick Ungar apologize to Senator Jeff Sessions for ridiculing the Senator's claims that Obamacare will add $6.2 trillion to the nation's debt.

Not surprisingly, Mr. Chait was unapologetic-doubling down on his assertions that current law projections made by official government agencies (CBO, Medicare Trustees and Treasury Department) provide a more realistic/accurate of our fiscal future than do current policy projections (i.e., the alternative fiscal scenario GAO released earlier this month).

He also dodged the central point of my analysis, which is that there's a boatload of reasons to believe that the alternative fiscal scenario is closer to the reality that will play out on the ground-especially in light of the growing gridlock we've observed in the nation's capital in recent years-than is the baseline scenario favored by Obamacare enthusiasts (since the latter shows the health care law making a minuscule dent in the deficit over the long run).

As my article pointed out, current law requires:

  • Medicare to slash physician fees by 25 percent next January (under the Balanced Budget Act of 1997).
  • Additional (Obamacare-required) cuts to physician fees so severe that by 2030, Medicare will be paying doctors 60 percent less than private health insurance plans (and nearly one-third less than Medicaid pays!).
  • Obamacare-mandated reductions in payments to hospitals so drastic that hospital prices for both Medicare and Medicaid will be around half those paid by private health insurers by the year 2040.
  • Eventually, payment reductions to hospitals will mean they are paid 61 percent less by Medicare and Medicaid than by private health insurers; physicians eventually will be paid 74 percent less under Medicare than private insurance.

I offered readers a few more factoids to help them work through the probable impact of such devastating cuts:

Well, the Medicare actuary projects 15 percent of Part A providers (e.g., hospitals and other institutional providers) will have negative margins by the year 2019 and 40 percent will be in the red by the year 2050. That is, they will be at risk of insolvency. Historically, doctor fees in Medicaid have been far below those of Medicare (28 percent below Medicare rates in 2008). Not surprisingly, nearly one-third (31 percent) of physicians refuse to accept any new Medicaid patients versus 17 percent for Medicare ...

Such cuts portend huge problems in access for Medicare and Medicaid patients, either because providers will refuse to treat them or because facilities will literally have been driven to bankruptcy ... Ever since 2003, Congress has elected to postpone the required cuts in Medicare physician fees that are legally required by the Balanced Budget Act of 1997 (BBA), so the alternative fiscal scenario assumes this pattern would continue.

Do the health care law's advocates dispute the accuracy of the Medicare actuary's predictions of how its specific cost control provisions will play out? Do they disagree with my assessment of the likely adverse effects on access to care? If so, the burden of proof is to explain why.

Sadly, in lieu of a useful evidence-based critique, Mr. Chait instead offers a very disappointing ad hominem/red herring/straw man (take your pick) retort:

This is a widely circulated Republican talking point - Congress passed these huge Medicare cuts in 1997 that saved money on paper, but they couldn't make them stick, ergo, all Medicare spending cuts are phony. It's wrong in all kinds of ways, as Paul Van de Water has comprehensively explained. First, Congress has passed Medicare cuts many, many times, and they have stuck. Second, the 1997 law enacted all kinds of other cuts that also weren't repealed. Third, the cuts that were repealed happened for a reason - they ended up cutting way, way deeper than Congress ever expected. The actual law cut spending as much as expected. It was the extra, unanticipated savings that have been repealed.

Of course, I never argued that "all Medicare spending cuts are phony." I merely argued that when cuts might otherwise have severe impacts on access to care, Congress finds a way to avoid them. The historical record clearly demonstrates this. Indeed, the Van de Water article Mr. Chait refers his readers to contains this quote from the Medicare Payment Advisory Commission in support of averting the severe cuts in doctor pay required by BBA: "Such reductions in physician payment rates, if they take place, would threaten beneficiaries' access to physician services" (emphasis added).

I concur with Mr. Chait that current law projections show a very slight improvement in the deficit picture if and only if these draconian cuts in provider pay are not overridden by Congress. In that case, we will see unprecedented levels of fiscal distress-including bankruptcies-among Medicare's institutional providers accompanied by unprecedented numbers of Medicare beneficiaries facing substantial barriers to accessing to care.

Is this truly the path Obamacare defenders want us to head down? If so, could just one of those enthusiasts please explain in black and white exactly why providers are undeserving of their current levels of payment under Medicare and/or why Medicare beneficiaries are undeserving of their current levels of access to care? Mr. Chait's rebuttal falls short of the mark. If progressives truly are interested in evidenced-based policy arguments and not just scoring cheap debating points, this is a golden opportunity to make their case.

 

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About the Author

 

Christopher J.
Conover

  • Christopher J. Conover is a Research Scholar in the Center for Health Policy & Inequalities Research at Duke University, an adjunct scholar at AEI, and a Mercatus-affiliated senior scholar. He has taught in the Terry Sanford Institute of Public Policy, the Duke School of Medicine and the Fuqua School of Business at Duke. His research interests are in the area of health regulation and state health policy, with a focus on issues related to health care for the medically indigent (including the uninsured), and estimating the magnitude of the social burden of illness. He is the recent author of The American Health Economy Illustrated and is a Forbes contributor at The Health Policy Skeptic.


    Follow Chris Conover on Twitter.

  • Phone: (919)428.4676
    Email: chris.conover@duke.edu

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