Republicans are getting attacked at their spring break Town Hall meetings over their plans to privatize Medicare and turn it into a voucher program. But they seem to be getting traction with one response, which reflects the political jujitsu contained in Rep. Paul Ryan’s (R-Wis.) plan. Here’s what Rep. Lou Barletta, a Republican from Pennsylvania, told the New York Times:
I am not sensing the general public is angered over Medicare reform. When I explain that people over 55 are not affected there is almost a sigh of relief.
From the start, it was obvious why Ryan included the delay in his privatization scheme. It allows Republicans, who’ve always backed privatization of Medicare, to tell current seniors — their political base — that this will not affect them. Of course, that also means that the proposed change will do nothing to solve the current decade’s budget deficit, the ostensible reason for the change. But that’s not really the goal, is it?
But let’s take a closer look at what will actually happen after 2023, and think through what it means for the generation between 45 and 65, most of whom will still be alive by 2033 when Ryan’s privatization scheme will be fully in effect. Every new senior entering Medicare after 2023 will receive a voucher to buy insurance. According to the Congressional Budget Office, that will pay for less and less of their coverage. By the time 2033 rolls around, their vouchers will cover about one-third of the cost of care.
But what will the overall Medicare-eligible population look like in 2033, when the entire 77-million strong baby boom generation will be in its golden years? According to the CMS actuary’s office, there will be 85.4 million Medicare-eligible seniors that year, up from 48.6 million today. Their projection for 2023 is about 69 million. That means roughly 16 million newly retired, active, more politically engaged seniors will be receiving sharply lower benefits and making sharply higher co-pays (call it higher taxes) to pay for health care, while about 53 million will be on the old plan that pays about 80 percent of costs. Every year after 2033, the ranks of seniors in the costly plan will grow, while there will be a declining number of seniors under the old, more financially attractive plan. Moreover, those in the old plan will be the most expensive people to take care of because they are the oldest in the cohort, thus consuming the vast majority of Medicare’s funds.
So what we will have is two groups of seniors: one younger, healthier, more politically active and making significantly higher payments for health care insurance out of pocket; and the other older, sicker, poorer and being coddled with the financially “bankrupt” older plan. This is precisely the situation that people in line for state and local government pensions face. Taxpaying private sector workers, whose employers took away their pensions years ago, resent paying higher taxes for pension benefits earned by their neighbors who went to work for government and never had their pensions taken away.
Can there be any doubt that there will be opportunistic politicians in that far away year of 2033 who will attack the “greedy geezers” in the old plan? Won’t older seniors wind up being easy scapegoats for the rising anger of those stuck in the new plan who are paying higher bills?
The politics of resentment has a long history in America. One is reminded of the retort by Guilded Age tycoon Jay Gould, who in 1896 faced a strike among his railway workers at a time of high unemployment. “I can can hire half the working class to kill the other half,” he shrugged.
I’m over 55. In theory, I don’t have to worry about Paul Ryan’s plan. But here’s my message to my cohort: We can hang together, or we can hang separately. You may think you’re safe from the effects of privatization on future seniors, but if I were you, I’d keep a wary eye out for the other half of the working class.
Hospital costs, safety data helpful but limited
The Sunlight Foundation today gave us a fascinating first peek at the hospital safety data from the Centers for Medicare and Medicaid Services, which was finally convinced to release the information after years of stonewalling by the American Hospital Association. For the first time, the public can compare less-than-stellar performance at competing local hospitals on key indicators like catheter or urinary tract infections or bed sores.
As their story points out, the data only covers about 60 percent of hospitals since many states, like Maryland, failed to cooperate with the voluntary CMS program. They also caution that any comparison of the raw numbers must take into account the numerous confounding variables that can make one hospital look more slipshod in its practices than another. Some hospitals take in many more older and poorer patients, who are more likely to have multiple chronic conditions that make them prone to complications during their hospital stays.
Yet as Arthur Levin of the Center for Medical Consumers, a New York-based advocacy group, pointed out, “I think it’s fair (to release the data) as long as everybody agrees on what the limitations are, and what the caveats are. There are those who say this data isn’t ready for prime time and public review. If we waited for perfection, we wouldn’t have anything out there.”
Speaking of limited databases, Medicare has its own website — “Hospital Compare,” which allows the public to review hospitals’ performance on key indicators of quality performance. These are indicators that clinical practice guidelines from professional medical societies suggest are more likely to lead to positive outcomes. They include such things as giving an aspirin when a heart attack patient presents at the emergency room door, or ensuring that patients receive the right antibiotic prior to surgery. Go to the website and check out the hospitals in and around your zip code. You may be surprised by the results.
Will people use these websites? The idea that “consumer-driven medicine” will drive down health care costs would seem to require this kind of information. How can you make an informed choice on how to spend your money unless you have good data on which to compare quality and cost? Yet the error-rate website set up by the Sunlight Foundation is purely about safety, which is only one variable that goes into determining the overall quality of a hospital. And while Hospital Compare does contain some pricing data, it only contains prices that CMS paid, not what the patients paid out of pocket, or, more significantly, what non-Medicare patients paid.
Here, for instance, you can see what three hospitals within 15 minutes’ drive from my home charged CMS for three different types of heart attack cases. It turns out that the one farthest from my home had the cheapest rate for one of the procedures, while all three charged about the same for the other two. If, God forbid, I find myself clutching my chest in pain tomorrow morning, and tell my wife to rush me to the hospital, am I going to tell her to go to the one that is 15 minutes away because it’s cheaper, or the one that is five minutes away?
These databases are great tools for patient advocacy groups pushing to improve local performance. They can be used by hospital administrators and physicians to spur on constant improvements at their hospitals to win a race to the top with their peers. They can also be used by accreditation agencies and regulators to measure and reward better performance. What they’re not very good for is comparison shopping by patients, who are ill-equipped to make sense of their undigested data.
Merrill Goozner is an award-winning journalist and author of “The $800 Million Pill: The Truth Behind the Cost of New Drugs” who writes regularly at Gooznews.com.