Jumping in to the Entitlements Pool with Both Feet

[Kulaf]

http://www.cnn.com/2011/POLITICS/04/02/ ... tml?hpt=T2

Well it's a start to the Medicare reform we all hoped we would see before. Will be nice to see some specifics when it comes out. Also some specifics on the Corporate Tax changes would be nice.

[Ddrak]

Specifics will be interesting. What bothers me is transferring the cost from public to private really won't change anything unless there's significant cost savings somewhere. The "best" it will achieve is killing off a bunch of old folk who can't afford health care.

To really be effective you need a few things:

i) Eliminate the link between employers and insurers. It's artificial and the market forces involved guarantee a worse consumer outcome. Individuals need to source insurance directly.
ii) Fix the cost of malpractice insurance but NOT by limiting claim amounts (which again runs counter to consumer interests). Best plan here is to change the way punitive damages are paid out to remove the "jackpot" nature of malpractice claims.
iii) Fix spiraling drug costs. The only rational way I can thing of helping here is the single-payer model where critical drugs are subsidized by the government, but that has other problems.

I'm willing to bet the GOP plan covers none of those and instead focuses on the cost instead of the people.

Dd

[Embar Angylwrath]

Once Americans wake up to the fact that all government spending is discretionary (with the exception of spending to repay interest on national debt), we may finally be able to have an adult conversation about this. Until then, Democrats will position themselves that Medicare/Medicaid/Welfare/Wealth redistributions are almost Constitutional rights, and Reps will do the same for defense spending.

You know what I think really freaks out the so-called government leaders about a government shutdown? Most Americans may not notice and finally realize how little the federal government actually does for most Americans.

To make a play on an old saying.. what if the US threw a shutdown and nobody came?

[Ddrak]

Well, Ryan's plan is pretty underwhelming to me. Seems like a step completely in the wrong direction. He's trading government deficit for personal bankruptcies, which won't make the nation any better.

Nice commentary by PRWatch: http://www.prwatch.org/node/10550

Here's the fundamental problem:

Hospitals are required to treat sick people in emergency rooms. Emergency room treatment costs significantly more than a regular doctor's visit for the same problem, which costs significantly more than preventative steps a GP may take.

Moving the spiraling costs of health care out of the government and into the private sector straight away passes the costs plus a bit extra for profits on to the policyholders of the particular policies in question. For Medicare-substitute policies that means you have a bunch of elderly folks that are certain to have expensive treatments eating the entire cost spiral. That means Medicare-substitute policies are going to be god-awful expensive and the only rational avenue is for people to abandon insurance for the emergency room.

Now, the cost gets dumped on the hospitals, which have to treat but can't recover costs. That puts pressure on the hospital system and ultimately either feeds back into even higher health care costs for those who CAN pay, or bankrupts the hospitals which the government will eventually have to bail out.

So, net effect is taxpayers end up paying for Medicare anyway, just through their own health care costs or through government bailouts. The only difference is the extra profits being paid to the insurance companies.

I still maintain the only viable solution to health care is to have the government fund basic/required treatments at a proscribed cost and permit insurers to sell policies direct to the public that add extras on that basic level.

Dd

[Kulaf]

Nice commentary? Did you link the wrong article? That read like tin foil hat anaysis......with no actual analysis. For a site that claims to "report on spin and disinformation", that was a lot of spin and not a lot of information.

[Kulaf]

CBO analysis:

http://health.newamerica.net/sites/newa ... Budget.pdf

With a followup:

http://www.cbo.gov/ftpdocs/121xx/doc121 ... r_Ryan.pdf

[Ddrak]

The CBO analysis actually makes my statement somewhat conservative, so I'm glad you introduced it. Interesting tidbits (all emphasis mine):

The proposal specifies a path for all other spending (excluding interest) that would cause such spending to decline sharply as a share of GDP—from 12 percent in 2010 to 6 percent in 2022 and 3½ percent by 2050; the proposal does not specify the changes to government programs that might be made in order to produce that path.

So, the GOP wants to cull 75% of spending without actually knowing how. In the software business that's called "vaporware". How can anyone rationally get behind a proposal that simply waves a magic wand to make the cuts necessary? I can guarantee that it will *never* happen.

Several changes would be made to laws governing medical malpractice, including putting in place limits on noneconomic and punitive damages.

So the GOP wants to make it possible for hospitals to run risk analysis and perform cheaper and dodgier procedures if the cost comes under the punitive limits? They also want to limit the payouts for things you can't easily trace to a wage? "Oh, yeah, we melted his face off but he doesn't need that to hold a job, so limit the payment". Sorry, but both of those are flat out stupid. You can't allow private organizations to know the maximum damages will be because it goes straight from avoiding harm at all costs to a risk management equation.

CBO estimated that, in 2030, a typical 65-year-old would pay 68 percent of the benchmark under the proposal, compared with 25 percent under the extended-baseline scenario and 30 percent under the alternative fiscal scenario.

So you're more than doubling the health care costs for retirees? Yeah, that won't have any effect on bankruptcy or abuse of emergency rooms. Remember, the CBO analysis only looks at direct effects and not follow-on effects through society.


As best I can see, Ryan's proposal is a bunch of imaginary cuts that force seniors into bankruptcy while enriching insurers in order to balance the budget.

Dd

[Kulaf]

The President's speech was good and I agree with most of it. What really scored points with me was this:

Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have the obligation to prove that we can afford our commitments. If we believe that government can make a difference in people’s lives, we have the obligation to prove that it works – by making government smarter, leaner and more effective.

That is all I have ever asked of government. If you want to intrude into my life.....or ask me for money to pay for some program......you have the duty to do it in a cost effective manner.

[Ddrak]

I think it would be reasonable to require a cost/benefit study on any proposed government program of more than $100m.

Dd

[Torakus]

I think it would be reasonable to require a cost/benefit study on any proposed government program of more than $100m.

Dd

Most already do. All DoD programs do.

Tora

[Ddrak]

I should have said "publicly available", I guess? DoD measurements would have to be a bit... interesting... in benefits too wouldn't they?

Dd

[Torakus]

I should have said "publicly available", I guess? DoD measurements would have to be a bit... interesting... in benefits too wouldn't they?

Dd

For the most part they are not classified, but aren't publicly available without a non-disclosure agreement. I guess it depends on what you mean by interesting and benefits. While DoD tries to follow best practices from industry when doing cost/benefit analyses (or more appropriately cost-performance trade-offs), sometimes the accepted industry values and definitions don't really translate.

Tora

[Embar Angylwrath]

I think I've posted this before, but if not, here you go.

http://www.nytimes.com/interactive/2010 ... aphic.html

http://www.usdebtclock.org/

The budget can be balanced without raising taxes. Moving the SS and Medicaid eligibility ages forward to 70 and reducing troops in Iraq/Afghanistan make up the lion's share of the budget savings. No taxes need to be raised. At all. Even if the US seized the entire assets of every millionaire and billionaire (assets.. not just wages... everything they own). and sold them, it wouldn't even cover this years deficit spending. Not to mention all that debt we're racking up (currently over 14 trillion... we have to pay that back).

The US needs to shave about 1 trillion a year off the federal budget AND acheive zero deficit spending. We could then make some headway on repaying all that debt.

[Ddrak]

Like I said before, changing health entitlements carries with it second order effects that I've yet to see catered for (either in monetary or political terms). The biggest savings in raising SS/Medicaid to 70 is you'll end up with half the recipients dying before getting any benefits, which seems like a fairly odd policy to adopt for programs that are supposed to help everyone.

The debt clock is most interesting on the national comparison page. China, India and Saudi Arabia fare astonishingly well.

Dd

[Embar Angylwrath]

Half of all recipients dying before getting benefits? Stat please. Last I heard was that almost 80% of all 20-year olds will live to age 70 (in the US). And the numbers of people dying between 65 and 70 aren't much differrent.

[Kulaf]

Like I said before, changing health entitlements carries with it second order effects that I've yet to see catered for (either in monetary or political terms). The biggest savings in raising SS/Medicaid to 70 is you'll end up with half the recipients dying before getting any benefits, which seems like a fairly odd policy to adopt for programs that are supposed to help everyone.

The debt clock is most interesting on the national comparison page. China, India and Saudi Arabia fare astonishingly well.

Dd

http://www.ssa.gov/history/lifeexpect.html

As you can see, in 1940 of those adult men reaching the age of 21, 54% of them lived to age 65 and began receiving benefits. As of 1990, 72% of adult men survive to age 65. Also those reaching age 65 are living 3 years longer on average than they did in 1940. Expectancy for women is even greater with an increase from 61% to 84%, and an increase of 5 years to total life expectancy.

Something has to give. If you have more people reaching the retirement age, and living longer......you have to make some kind of adjustment to offest the additional costs of the system. You either raise the withholding rate (which is already astronomical compared to when the plan was introduced), or you withhold benefits until a more appropriate age.

[Embar Angylwrath]

Adjust for ethnicity, (sorry, blacks and native American Indians just don't live as long as whites, hispanics and asians, for a number of reasons), and the average mortaility date gets pushed even farther.

http://www.news.harvard.edu/gazette/200 ... tancy.html

Of note, besides violent death, nutritional-based morbidity (cholesterol, late-onset diabetes, alchohol) are the leading casues of mortality in blacks and American Indians. And you wonder why Partha advocates for junk food as a viable source of nutrition...

Those that eat right, live right (exercise), live longer. Those that don't... don't. No getting around that.

Life expectency has been creeping up over the last 100 years, with the exceptions of Russia and a bunch of at-war north African nations, and the occasional other nation at war. The US is no different. We aren't far off the life expectancy of Japan or some of the Icelandic nations (and if we had less violent deaths, we'd probably be spot on with them). People are more functional into their older ages than ever before. If older people are changing, why is it so difficult to revist and change entitlement programs that support them?

[Kulaf]

There is a high correlation between income and eating habits. If we want people to eat better, we need to offer the opportunity to them to do so.

[Ddrak]

Half of all recipients dying before getting benefits? Stat please. Last I heard was that almost 80% of all 20-year olds will live to age 70 (in the US). And the numbers of people dying between 65 and 70 aren't much differrent.

You're sort of right (the number is much higher than 50%). I stand corrected.

http://www.ssa.gov/oact/STATS/table4c6.html

71.5% of males and 81.5% of females live to 70. Given only 1% of the population dies by 20, it's closer to 75%, not 80% living to 70 as a total.

The difference is paying out 13 years of SS (on average) vs paying out 18 years.

and if we had less violent deaths, we'd probably be spot on with them

Rubbish. Violent deaths are a minute component of deaths. If you took them out you'd be 4.25 years behind instead of 4.3 years. You might edge out Cuba though.

If older people are changing, why is it so difficult to revist and change entitlement programs that support them?

How many of the people are not dying because of the existence of the government support? Are you suggesting that old people living longer is a bad thing, so you should remove one of the things that helps them live longer?

Dd

[Minute]

There is a high correlation between income and eating habits. If we want people to eat better, we need to offer the opportunity to them to do so.

This, lots of this.