Topic: Cato Publications

Medicare Politics Will Sink Quality Efforts

As David Hyman explains in Medicare Meets Mephistopheles (book forum today), Medicare’s already-high tax burden is set to explode when the baby boomers begin to retire in 2011. Yet for all that money, the quality of care that Medicare delivers is downright mediocre.

Some members of Congress, led by Senate Finance Committee chairman Chuck Grassley (R-IA), are using the threat of a cut in Medicare payments to force physicians to accept tying those payments to government-defined quality measures.

Physicians, led by the American Medical Association, are essentially responding, Ditch the planned pay cut – then we’ll talk.”

Who’s right? Whose approach will get seniors and taxpayers the most value for their Medicare dollars? No one really knows, and thus all the political wrangling.

But one thing can be known: the approach that Congress chooses will be determined by raw political power – not by what provides the greatest value. For example, if the physicians get their way, every bit of quality improvement will cost taxpayers more money, because the AMA won’t even support pay cuts for lousy doctors.

As I explain in a recent paper, that is exactly why we don’t want Congress itself in the business of measuring and rewarding health care quality. That task is better left to a competitive market process. Congress should confine “pay-for-performance” to private Medicare plans, and encourage greater enrollment in private plans by giving seniors risk-adjusted vouchers rather than a defined benefit.

Help Wanted: New Medicare Administrator

Dr. Mark McClellan recently announced his intention to resign from the position of administrator of the Center for Medicare and Medicaid Services (CMS). 

Finding a replacement shouldn’t be hard.  The job description is simple.  The next Medicare administrator must run a sprawling program that buys health care for approximately 42 million Americans in every state of the union, and he must simultaneously:

  1. Spend less money on health care (to keep Congress and the Administration from calling for your head);
  2. Spend more money on health care (for example by averting the 5 percent cut in physician payments scheduled to take effect next year) to keep providers from calling from your head - and seniors from doing so once they can’t find a doctor to treat them;
  3. Using modest carrots and no sticks, dramatically improve the mediocre quality of care currently being delivered to Medicare beneficiaries - but don’t interfere with the way in which providers deliver health care, particularly if a low-quality provider has the ear of a congressman or employs lots of people in a swing district;
  4. Buy lots of pharmaceuticals for seniors - but don’t pay too much (because Congress and the Administration will have your head) or too little (or the pharmaceutical companies will stop developing innovative products);
  5. Using inadequate and outdated information, set the price that Medicare will pay for every single good and service that beneficiaries need in every county in the United States;
  6. Assure Congress that you are protecting the program from fraud and abuse, even though your own fraud control personnel have doubts about whether they have the tools to do so, and the program is routinely labeled as being at “high risk” for fraud;    
  7. Prepare Medicare for the impending tidal wave of baby boomers, who will stop paying into the system and will start expecting benefits in 2011; 
  8. Keep a straight face while you explain that Medicare will be there for future generations, even though your trustees have determined that putting just one part of the program in actuarial balance for the next 75 years will require an “immediate 121% increase in the tax rate or an immediate 51%reduction in expenditures;”
  9. Surrender your every waking hour to the thankless task of bailing out a sinking ship while being forced to cheer on the efforts of your bosses (in the Administration and Congress) to drill more and bigger holes in the bottom; and finally 
  10. Walk on water in your (non-existent) free time. 

The last item on the list is obviously a stretch, but the next administrator of CMS will face all of the other challenges. 

How did the Medicare program – born of such high hopes and good intentions – end up in this mess?  What can we do to address these problems? 

For some answers to these questions, along with a satirical perspective on the Medicare program, attend the book forum for Medicare Meets Mephistopheles at the Cato Institute on September 21, 2006.  Sign up here.

Klein on Medicare Meets Mephistopheles

No one is going to accuse the American Prospect’s Ezra Klein of being a libertarian.  (Oh, wait.  I think I did once.) 

Which makes it all the more impressive that he was able to say such kind things about the Cato Institute’s latest health policy book, Medicare Meets Mephistopheles:

[T]he book is actually quite good. I’d happily recommend it to anyone with a basic grasp on health care and a desire to learn a bit more about Medicare. Hyman is a felicitous and fun writer, and he conveys an impressive amount of history and data in as accessible and absorbable a manner as one could hope. I know how tricky it is to make health care a quick and gripping read, and I tip my hat to anyone who is capable of enriching the debate and educating readers by doing so.

Full disclosure: Klein was less enamored with Hyman’s analysis and recommendations.  (Readers can find those comments in Klein’s post over at Tapped.)  Hopefully, Klein will raise his concerns at the Medicare Meets Mephistopheles book forum this Thursday.

Against Equity and Good Conscience, Indeed

Medicare watchers know that the federal government recently – and improperly – sent checks to 230,000 seniors. The checks were supposed to reimburse certain seniors for premiums paid under the new Medicare prescription drug benefit (Part D). But seniors who were not supposed to receive any money at all instead got checks worth an average of $215 – for a total of almost $50 million in erroneous payments.

The feds tried to get seniors to return the money – that is, until the Center for Medicare Advocacy, Inc. filed suit to stop them. In fact, the Center even argued that even though seniors were not entitled to the money, they should get to keep it:

In certain circumstances a beneficiary may be entitled to a waiver of the overpaid refund. Waiver of the overpayment may be available to a beneficiary who was without fault in causing the overpayment and where repayment would be against equity and good conscience.

(Bold and italics in original.)

So not only may seniors pressure Congress to grant them windfalls that they don’t really deserve (e.g., Part D), but according to the Center for Medicare Advocacy, a senior should also get to keep even unlegislated transfers from younger Americans if the senior feels that returning the windfall “would be against equity and good conscience.”

But this is par for the course with Medicare. For more examples of Medicare madness, attend or watch online this Thursday’s book forum for Medicare Meets Mephistopheles, a new book by Cato adjunct scholar David Hyman.

Medicare, Only More Fun

On Thursday, Cato will host a book forum for Medicare Meets Mephistopheles, a new book by Cato adjunct scholar David Hyman. Medicare Meets Mephistopheles takes a satirical look at the crown jewel of President Lyndon Johnson’s Great Society.

Hyman is a rising star in the field of health law and policy. A lawyer and a doctor, he is professor of law and medicine at the University of Illinois Urbana-Champaign. In 2004, he was the lead author of Improving Health Care: A Dose of Competition, the first joint report by the Federal Trade Commission and the Department of Justice. This year, he guest-edited an issue of the Journal of Health Policy, Politics and Law devoted to that report. Prof. Hyman also has a habit of quoting Austin Powers in his law review articles.

Ted Marmor, one of Medicare’s leading advocates, will comment, as will Robin Wilson, a visiting professor of law at Washington & Lee University.

The forum will be held at noon this Thursday at the Cato Institute, and will be followed by a luncheon. Other details, including how to preregister, are available here.