Why The Reimbursement Fight Matters

Paul Krugman says the Democrats' success in pushing a bill that would redirect funds from the Medicare Advantage program (which provides generous subsidies to insurance companies) into higher reimbursement rates for doctors shows that progressives have a winning political strategy that could turn into universal health care next year. Jonathan Cohn agrees also citing the importance of measures that aim to cleave the doctor lobby away from the insurance insurance.

But on the other hand, Cohn cautions "In the long run, no health care reform can succeed without doing something about cost and quality--which will mean changing the way we pay for medical care and, in some cases, paying doctors less." Realistically, I think this means that even if progressives in some sense "win" a big health care fight next year, it's still going to leave us with a system that leaves a lot to be desired.

Comments

Sadly, I think we will see a proliferation of low cost health services provided by non-doctors. Nurses and assorted "technicians" will do the work with one doctor guiding the ship but not really seeing patients for routine things at all.

Anyone care to trace the evolution of doctors pay over the years, adjusted for inflation?

Posted by freddiemac | July 11, 2008 10:04 AM

Let's remember - restoring the cuts in Medicare will have absolutely no effect on health outcomes in America. As Matthew has repeatedly shown us, there is no relationship between spending on Medicare and health outcomes.

All this was was a giveaway by Congress to Big Doctor, paid for by a cut to Big Insurance.

Now, we know that the Democrats are all in favor of gigantic givaways to powerful lobbies (as are Republicans, of course). But let's not pretend that this has anything at all to do with health. It doesn't.

Posted by Al | July 11, 2008 10:07 AM

Realistically, I think this means that even if progressives in some sense "win" a big health care fight next year, it's still going to leave us with a system that leaves a lot to be desired.

This is trivially true. Of course we're not going to enter into health and wellness utopia in late 2009.

The question is, what precisely do you think will be lacking, and why do you emphasize this over and over in health care posts? For me, center-left healthcare reform will massively extend the reach of affordable care to lower-income Americans. That's where the moral fight is - everyone ought to have health care coverage. This will bring us much, much closer to that goal.

There are a bunch of other problems, too, and they'll be dealt with more or less effectively. But that's not the central issue, not the one with the great moral weight. So I don't focus on those problems quite as much.

Posted by DivGuy | July 11, 2008 10:10 AM

BTW - I don't see how capitulating to Big Doctor (as the Democrats do here) is going to make it more likely that we'll have a system in the future that will be "paying doctors less" (as Cohn writes).

Let's remember that Matthew thinks that dealing with the health care problem in this country is going to have to involve "crushing of the doctor's lobby". How does this capitulation to the Big Doctor lobby by the Democrats move us toward that goal?

Posted by Al | July 11, 2008 10:13 AM

Congress hard at work on Medicare issues (note the bipartisan nature of the effort):

http://www.nytimes.com/2008/06/25/business/25leonhardt.html?ref=business

Posted by kafka | July 11, 2008 10:17 AM

The best line of that Krugman column was an oldie but a goody,

David Brooks is off today.

Posted by crack | July 11, 2008 10:20 AM

The re-imbursement fight matters for military retirees and active duty military families, too, as doctors are reimbursed in the Tricare system at the same rate as they are reimbursed by Medicare.

Why do the Republicans hate military retirees, disabled vets and active duty family members so much?

Posted by calipygian | July 11, 2008 10:37 AM

The re-imbursement fight matters for military retirees and active duty military families, too, as doctors are reimbursed in the Tricare system at the same rate as they are reimbursed by Medicare.

Why do the Republicans hate military retirees, disabled vets and active duty family members so much?

Posted by calipygian | July 11, 2008 10:41 AM

The re-imbursement fight matters for military retirees and active duty military families, too, as doctors are reimbursed in the Tricare system at the same rate as they are reimbursed by Medicare.

Why do the Republicans hate military retirees, disabled vets and active duty family members so much?

Posted by calipygian | July 11, 2008 10:43 AM

the Democrats' success in pushing a bill

Actually the reason why this bill will matter is the political theatre and spin of it, which (at least on NPR, has been very tilted to the GOP). The bill was pretty quickly spun as a good thing (of course, I imagine many conservatives now will use that spin as "evidence" of how liberally biased are NPR, et al.). And then the spin was pretty much "the Democratic controlled Congress can't even pass a health care bill that ensures doctors will get paid so poor people and the elderly can get medical care -- why do the Democrats not care about poor people and the elderly?".

Once the bill was passed, how did NPR frame it? Why "GOP Senators enable health care bill to be passed", of course.

The passage of the bill is important, though, because, in spite of how its passage was framed, the GOP is going to run against the "do nothing Democratic Congress" -- so when bills don't pass, it helps the GOP (which gives the GOP no incentive not to quietly keep bills from passing the Senate). That's why passage of this bill matters -- every bill passed is one less political argument to be made by the GOP about the Dems. not being able to run government well.

Posted by DAS | July 11, 2008 10:49 AM

But ... that's sort of okay. As I'm sure you read in Sick, the original medicare and medicaid contained huge loopholes that funded a tremendous expansion of hospitals. Over time, those loopholes were closed as cost pressures rose. In theory the same would happen this time around.

Posted by Nicholas Beaudrot | July 11, 2008 10:50 AM

Cohn claims: "In the long run, no health care reform can succeed without doing something about cost and quality--which will mean changing the way we pay for medical care and, in some cases, paying doctors less. (Believe it or not, sometimes the insurers are the good guys and the physicians are the bad guys.)"

It is true that any major change in which we manage health care expenditures is likely to create some redistribution of income between doctors. But I don't see much reason to believe the total income of doctors will have to be reduced, particularly if we can reduce a lot of the costs going to administration, insurance marketing, and so on.

Posted by DTM | July 11, 2008 10:55 AM

Realistically, I think this means that even if progressives in some sense "win" a big health care fight next year, it's still going to leave us with a system that leaves a lot to be desired.

No question. But dealing with cost and quality is complicated, and will necessarily (I suspect) take time. Universality, on the other hand, is conceptually pretty simple, and basically involves some version of the government getting out its check book. I say we should push to achieve true universality by any means necessary at the earliest possible moment. The cost and quality issues will have to be dealt with. And they will be, eventually.

Posted by Jasper | July 11, 2008 11:31 AM

reducing administration cost will only give doctors a blank check. some day liberals will realize how evil doctors and the ama are.

Posted by thehova | July 11, 2008 11:34 AM

Why do the Republicans hate military retirees, disabled vets and active duty family members so much? - calipygian

As I pointed out our "liberal" media has managed to make it seem like Democrats were sitting on this bill and the Republicans pushed it through. Of course, if the media were "fair and balanced" rather than "liberal" it wouldn't have been biased in favor of this "big gummint bill" in the first place.

Posted by DAS | July 11, 2008 11:49 AM

Attached is another take on this issue from a practicing physician who has some first hand knowledge of the situation, unlike asshole fucktard Al.

http://scienceblogs.com/denialism/2008/07/medicare_cutsa_bad_thing.php#more

Posted by SLC | July 11, 2008 12:01 PM

"reducing administration cost will only give doctors a blank check."

Not by a long shot are all administrative costs in the current system associated with monitoring doctors.

Posted by DTN | July 11, 2008 12:10 PM

Attached is another take on this issue from a practicing physician who has some first hand knowledge of the situation, unlike asshole fucktard Al.

Let's see, on the one hand (SLC's) there is a link to speculation and conjecture about what some doctors may in the future do, and on the other hand (mine and Matthew's) there is scientific evidence that there is no relationship between Medicare spending and health outcomes. Which to choose, which to choose? Um, I'll go with the scientific evidence instead of the speculation and conjecture!

Posted by Al | July 11, 2008 12:28 PM

Re: Sadly, I think we will see a proliferation of low cost health services provided by non-doctors.

And this is problem how?

An as another poster said, the prize here is universal healthcare. If we can get to that, I will accept the other problems that might come with it. No country has *perfect* healthcare. But going broke because you get sick, or being denied care because of your finances, should not be part of our reality.

Posted by JonF | July 12, 2008 8:27 AM

WTF? Wow the doctors lobby is so powerful that they actually blocked a 10% paycut. Color me not impressed. Its not like they've been getting double digit raises every year.

The problem is volume of services, not cost per procedure. Reimbursement to doctors accounts for 20% of total healthcare costs, but that includes overhead. When you take out overhead and look at just doctors incomes, it accounts for only 10%.

That means you could cut doctors incomes by 50%, and total healthcare savings would only be 5%. We need to look in another direction.

The way to bring down costs is to 1) take out the middle man (insurance) which provides absolutely no value to the system; 2) pay docs on a flat salary so they are not incentivized to drive up volume costs.

My model is 130k for primary care docs and 200k for specialists. Thats almost exactly what docs in UK and Canada make.

Using a flat salary is the ONLY way to control healthcare costs on the provider side. 10% cuts here and there will do nothing but drive up volume overall so that you actually end up paying MORE money overall.

We need to incentivize doctors to work LESS, not more. A flat salary system will do just that and its a two for one prize because not only will overall payments to doctors decrease, but overhead will fall drastically as you dont need bureaucrats to make sure that doctors arent driving up demand.

Posted by joeblow | July 12, 2008 1:43 PM