“Promoting Untrue Choice”: Paul Ryan’s Health Care Proposal Would Shrink The Medicare Doctor Pool
The federal budget proposed by Representative Paul Ryan, the Republican vice-presidential nominee, extols the benefits of “promoting true choice” for Medicare beneficiaries.
In truth, though, the Ryan plan would substantially reduce choice for many people on Medicare — by cutting them off from their current doctors.
Doctors see Medicare patients, despite the relatively low payments they receive for doing so, partly because Medicare represents such a large share of the health-care market.
If a substantial number of beneficiaries moved out of Medicare and into private plans, as Ryan proposes, doctors would have much less incentive to see Medicare patients. And the elderly who want to remain in traditional Medicare would risk being stranded.
The evidence suggests that, in time, this problem could well affect a large share of Medicare beneficiaries. To put that evidence in context, though, it helps to first review the history of the Ryan plan.
The proposal has changed since it was presented in 2011. In the original version, traditional Medicare was eventually to be replaced in its entirety by private plans. The Congressional Budget Office found that this shift would raise health-care costs drastically because the private plans wouldn’t be large enough to enjoy Medicare’s leverage in negotiating prices with hospitals and other large providers. The savings that private plans could achieve because beneficiaries would share more of the costs, and therefore economize more, would be more than offset by that loss of leverage — and by the private plans’ higher overhead and need to turn a profit.
Ryan Revision
In response to the devastating CBO report, Ryan revised his proposal. Under Ryan 2.0, private plans would co-exist with traditional Medicare. (The CBO hasn’t fully evaluated the revised plan yet.)
Many supporters argue that the new plan can’t be as big a problem as the old one, since beneficiaries could always choose to remain in traditional Medicare. In health care, however, choice isn’t always innocuous — and can sometimes be harmful.
I have previously described two downsides to expanding private plans in Medicare. First, it would undercut Medicare’s ability to help move the payment system away from fee-for- service reimbursement and toward payments based on value, because no private plan is large enough to accomplish that shift by itself. Second, the mechanism for adjusting premiums to even out the health risks of individual beneficiaries is far from perfect, so plans can easily game the system, raising total costs. In effect, the plans would end up being overpaid.
The reduced choice of doctors for those who remain in traditional Medicare is a third adverse consequence of moving beneficiaries out of the program.
Currently, Medicare beneficiaries almost universally enjoy excellent access to doctors. And the great majority of beneficiaries never have to wait long for a routine appointment, the Medicare Payment Advisory Commission has found. Roughly 90 percent of doctors accept new Medicare patients.
Doctors provide this access even though they are reimbursed by Medicare at rates that are only about 80 percent of commercial rates — partly because Medicare is such a large share of the market. Which brings us to the concern about the Ryan plan.
Medicare Doctors
How important is Medicare’s market share in influencing physician participation? The evidence is limited, but the best study to date suggests it is significant. In the 1990s, Peter Damiano, Elizabeth Momany, Jean Willard and Gerald Jogerst, all associated with the University of Iowa, surveyed Iowa physicians and examined variation among counties. They found that for each percentage-point increase in the share of Medicare beneficiaries in a county’s population, doctors were 16 percent more likely to accept patients on Medicare. The only other study I know of on this topic, an unpublished analysis by Matthew Eisenberg of Carnegie Mellon University, also found an effect from Medicare’s market share, albeit one that was substantially smaller than the one Damiano and his colleagues found.
About 10 percent of the U.S. population is now enrolled in traditional Medicare, and an additional 5 percent has private Medicare plans. Let’s assume, for the sake of argument, that the Ryan plan would cause another 5 percent of the population to shift, and to be conservative let’s cut in half the Damiano estimate of the impact from that reduction in Medicare’s market share. Then the chance that a doctor is willing to see traditional Medicare patients would be expected to decline by a whopping 40 percent. The share of doctors accepting Medicare would fall from about 90 percent to 54 percent.
To be even more conservative, let’s average the reduced Damiano estimate (already been cut in half and applied only to today’s market share rather than the higher one that will exist in the future when more people are on Medicare) with the Eisenberg estimate. Still, about 20 percent of doctors would be expected to stop accepting Medicare patients.
Supporters of the Ryan approach might argue that fewer people would shift into the private plans, so the impact would not be that great. After all, the existing Medicare program already offers Medicare Advantage plans, so perhaps anyone who wants private insurance already has it. But then, what is the point of Ryan’s Medicare reform?
Another defense might be that the government could simply raise doctor-reimbursement rates to encourage providers to continue treating a shrinking population of traditional Medicare patients. And that’s true. However, Ryan has not included the extra cost in his budget.
So, which is it, Mr. Ryan? Will your plan cause Medicare beneficiaries to lose access to their doctors, or are your budget numbers too rosy because you haven’t counted the extra payments needed to keep doctors in the program?
By: Peter Orszag, Council on Foreign Policy, Business Insider, September 24, 2012
“The Wrong Right Move”: Terrible News For Mitt Romney
Republican presidential candidate Mitt Romney campaigns at D’Evelyn High School in Denver, Colorado over the weekend.
Once it became clear that President Obama received a significant bounce from the Democratic National Convention, the next question was whether this bounce would translate to an enduring advantage for his campaign.
On Friday, polls from National Journal and Reason magazine gave Obama a seven-point lead over Mitt Romney, 50–43 and 52–45, respectively. Saturday was a quiet day for national polling, but Sunday saw the release of two tracking polls by Rasmussen and Gallup. Rasmussen was unchanged from the last few days; Romney and Obama remain tied with 46 percent support, though Obama’s job approval has ticked down: 48 percent approve, 50 percent disapprove.
Obama began last week in a similar position with Gallup, but both his approval—and performance against Romney—improved in yesterday’s tracking poll. He now earns 48 percent support to Romney’s 46 percent, and has a job approval rating of 51 percent, with 43 percent disapproval. This morning, a set of national polls from Zogby and Politico/George Washington University show Obama with a decisive lead in the race. The Politico poll finds Obama leading Romney by 3 points among likely voters, 50 percent to 47 percent, while Zogby has Obama up 8, 49 percent to 41 percent.
These results should be considered with polls released last week—from NBC News and the Pew Research Center—that show Obama above 50 percent against Mitt Romney. Relative to his post-convention bounce, Obama’s position has declined, but overall, he’s unquestionably stronger than he was before the conventions. Here is a chart to illustrate the general change over the last three weeks.
As you can see, Obama’s position has sloped downwards since the beginning of last week, but Romney’s has also declined, leaving them in the same rough position.
If there’s an upside for Romney, it’s that Gallup and Rasmussen show a neck-and-neck race. But that’s the extent of the positive news for the former Massachusetts governor. Indeed, if we move our attention to state-level polling, the picture looks even worse for the Republican nominee. In the most critical state for Romney, Florida, his position has deteriorated. Public Policy Polling gives Obama a four-point lead in Florida, while Mason-Dixon puts him ahead by 1 percent. If you’re unwilling to put Florida in the “leans Obama” column—on account of Romney’s one-point lead in Friday’s Purple Strategies survey—then the most you can say is that Florida is a toss-up that tilts in Obama’s favor.
There’s no way in which this isn’t terrible news for Romney. Without Florida’s 29 electoral votes, there is no way for him to reach 270 without winning two states from the “leans Obama” column, like Wisconsin and Michigan. At most, he gets 256 electoral votes—and that’s if he wins every other swing state on the map.
Here’s where Romney stands: He consistently trails Obama, hasn’t held a lead in national polls, and is nearly five points way from the 50-percent mark in most polling averages. His support is collapsing among core demographics like older voters, and he has lost his advantage on the economy. Doubling-down on conservative positions might build enthusiasm among his base, but it won’t help him catch up with Obama; both sides are winning the vast majority of their respective partisans and partisan leaners.
In other words, unless Romney can win undecideds and convert Obama voters, he simply doesn’t have a path to the victory.
By: Jamelle Bouie, The American Prospect, September 24, 2012
“Romney’s Optimism Cure”: Are You Feeling Reassured By The Confidence Fairy?
Mitt Romney is optimistic about optimism. In fact, it’s pretty much all he’s got. And that fact should make you very pessimistic about his chances of leading an economic recovery.
As many people have noticed, Mr. Romney’s five-point “economic plan” is very nearly substance-free. It vaguely suggests that he will pursue the same goals Republicans always pursue — weaker environmental protection, lower taxes on the wealthy. But it offers neither specifics nor any indication why returning to George W. Bush’s policies would cure a slump that began on Mr. Bush’s watch.
In his Boca Raton meeting with donors, however, Mr. Romney revealed his real plan, which is to rely on magic. “My own view is,” he declared, “if we win on November 6, there will be a great deal of optimism about the future of this country. We’ll see capital come back, and we’ll see — without actually doing anything — we’ll actually get a boost in the economy.”
Are you feeling reassured?
In fairness to Mr. Romney, his assertion that electing him would spontaneously spark an economic boom is consistent with his party’s current economic dogma. Republican leaders have long insisted that the main thing holding the economy back is the “uncertainty” created by President Obama’s statements — roughly speaking, that businesspeople aren’t investing because Mr. Obama has hurt their feelings. If you believe that, it makes sense to argue that changing presidents would, all by itself, cause an economic revival.
There is, however, no evidence supporting this dogma. Our protracted economic weakness isn’t a mystery; it’s what normally happens after a major financial crisis. Furthermore, business investment has actually recovered fairly strongly since the official recession ended. What’s holding us back is mainly the continued weakness of housing combined with a vast overhang of household debt, the legacy of the Bush-era housing bubble.
By the way, in saying that our prolonged slump was predictable, I’m not saying that it was necessary. We could and should have greatly reduced the pain by combining aggressive fiscal and monetary policies with effective relief for highly indebted homeowners; the fact that we didn’t reflects a combination of timidity on the part of both the Obama administration and the Federal Reserve, and scorched-earth opposition on the part of the G.O.P.
But Mr. Romney, as I said, isn’t offering anything substantive to fight the slump, just a reprise of the usual slogans. And he has denounced the Fed’s belated effort to step up to the plate.
Back to the optimism thing: It’s true that some studies suggest a secondary role for uncertainty in depressing the economy — and conservatives have seized on these studies, claiming vindication. But if you actually look at the measures of uncertainty involved, they’ve been driven not by fear of Mr. Obama but by events like the euro crisis and the standoff over the debt ceiling. (O.K., I guess you could argue that electing Mr. Romney might encourage businesses by promising an end to Republican economic sabotage.)
You should also know that efforts to base policy on speculations about business psychology have a track record — and it’s not a good one.
Back in 2010, as European nations began implementing savage austerity programs to placate bond markets, it was common for policy makers to deny that these programs would have a depressing effect. “The idea that austerity measures could trigger stagnation is incorrect,” insisted Jean-Claude Trichet, then the president of the European Central Bank. Why? Because these measures would “increase the confidence of households, firms and investors.”
At the time I ridiculed such claims as belief in the “confidence fairy.” And sure enough, austerity programs actually led to Depression-level economic downturns across much of Europe.
Yet here comes Mitt Romney, declaring, in effect, “I am the confidence fairy!”
Is he? As it happens, Mr. Romney offered a testable proposition in his Boca remarks: “If it looks like I’m going to win, the markets will be happy. If it looks like the president’s going to win, the markets should not be terribly happy.” How’s that going? Not very well. Over the past month conventional wisdom has shifted from the view that the election could easily go either way to the view that Mr. Romney is very likely to lose; yet markets are up, not down, with major stock indexes hitting their highest levels since the economic downturn began.
It’s all kind of sad. Yet the truth is that it all fits together. Mr. Romney’s whole campaign has been based on the premise that he can become president simply by not being Barack Obama. Why shouldn’t he believe that he can fix the economy the same way?
But will he get a chance to put that theory to the test? At the moment, I’m not optimistic.
By: Paul Krugman, Op-Ed Columnist, The New York Times, September 23, 2012
“The Grandfather Of Obamacare”: How Mitt Romney Paid For Romneycare With Federal Help
Republican presidential candidate Mitt Romney told Univison in an interview Wednesday that he did not mind when President Obama called him the “grandfather” of Obamacare when referring to the program Romney instituted when he was governor of Massachusetts. Quite the opposite. Romney thought other states might take a page from the Massachusetts playbook.
We didn’t have to cut Medicare by $716 billion. We didn’t raise taxes on health companies by $500 billion, as the president did. We crafted a program that worked for our state. I believe the right course for health care reform is to say for each state we’re going to give you the Medicaid dollars you’ve had in the past, plus grow them by 1 percent. And you, as the states, are now going to be given targets to move people to insurance, and you craft programs that are right for your state. Some will copy what we did; others will find better ideas.
Romney is right: The state of Massachusetts did not cut Medicare to finance health care (nor could it have, as states don’t have a say in the federally financed entitlement budget). Whereas the Affordable Care Act levies a tax on insurance companies and makers of medical devices, the Massachusetts law has no similar provision.
But could a state with a capped Medicaid budget, as Romney has proposed, copy what Romney did in Massachusetts and end up with universal coverage? Romney’s own experience suggests probably not: His state a special pot of federal money, alongside a preexisting assessment on hospitals and insurers, to expand insurance coverage to 98 percent of its population.
Way back in 1985, under then-Gov. Michael Dukakis, Massachusetts set up a program called the Uncompensated Care Pool. Much like the name suggests, the pool is used to finance health care for those without insurance. Massachusetts financed the plan largely through assessments on hospitals and insurers. Under Romney’s administration In 2004, each industry paid in about $157 million to keep the pool running. That plan still operates today — under the name Health Safety Net – and covers health care needs that Massachusetts residents cannot afford.
Since the late 1990s, Massachusetts has also received additional Medicaid funds to enroll populations that other states traditionally do not cover. In 2005, when Romney was governor, the federal aid amounted to $550 million. As former Romney adviser John McDonough explains in his book “Inside Health Policy,” the funds were crucial to laying the foundation for universal health coverage. He takes us back to 2005, when the George W. Bush administration was getting ready to end that special funding arrangement:
“In Masachusetts, $350 million is a lot of money, and the news set off alarm bells. Governor Romney reached out and formed a partnership with Senator Kennedy to scheme how to keep the extra federal dollars coming. At that moment, the state’s mundane desire to retain federal dollars merged with the policy goal of universal coverage to create a new policy imperative. Romney and Kennedy proposed that Massachusetts keep receiving the extra payments and in return the state would shift the use of those dollars [to] subsidies to help lower-income individuals purchase health insurance coverage.”
Ryan Lizza recounts a similar version of events in his New Yorker article on Romneycare. That state ultimately secured three years of additional Medicaid funding, $1.05 billion, which largely financed the Massachusetts expansion. Both accounts suggest that it was a special commitment from the federal government, rather than a capped budget, that spurred Massachusetts’ success.
Since then, employers and individuals have chipped in to keep the universal coverage program afloat. The Blue Cross Blue Shield Foundation of Massachusetts saw spending by both of those groups increase in the year after Romneycare became law, which they attribute to rising medical costs and the insurance expansion.
Five years later, it’s largely federal funding that keeps Massachusetts’ universal coverage afloat. Since 2005, the state has twice renewed that federal waiver — the one Lizza and McDonough wrote about — to provide additional Medicaid dollars to the state.
The most recent renewal was last December 2011, when the state secured $26.75 billion in federal funds over the course of three years. It will, among other programs, continue to finance the universal coverage program.
“The milestone agreement also ensures the ongoing success of Massachusetts’ historic health care reform initiative, through which more than 98 percent of the Commonwealth’s residents, and 99.8 percent of children, have health insurance,” Massachusetts Health and Human Services Secretary JudyAnn Bixby wrote at the time. “The waiver fully funds our ongoing health care reform implementation.”
So Massachusetts used not just federal Medicaid money but federal dollars above and beyond that Medicaid money to finance their health reforms. It is difficult to see how Romney’s proposal to cut Medicaid spending and hand that reduced share over to the states would allow other states to follow Massachusetts’ example. It might not even permit Massachusetts to continue following Massachusetts’ example.
By: Sarah Kliff, The Washington Post, September 21, 2012
“Bain-Like Bonuses”: A Leveraged Romney Campaign With Nothing For The Troops
Mitt Romney’s campaign is in a bit of trouble. No, not poll numbers, or internal disputes, or the candidate himself, though those are all problems too. Rather, the Romney campaign, which outraised President Obama for four consecutive months this summer, is in money trouble. Campaign finance disclosures released yesterday show the campaign has only $35 million in the bank — a relatively low amount this close to the election — and is $15 million in debt. The campaign has been forced to scramble to find new big donors, something you don’t want to have to do this late in the game, because its other donors are maxed out.
The problem is not Romney’s fundraising abilities — he’s unquestionably adept at bringing in big checks — but rather with quirks in campaign finance law, his reliance on big donors, and perhaps some mismanagement. The loan was needed as a bridge before he could access his general election fund, which candidates can’t touch until after their nominating conventions. The low cash on hand is because much of the money he raised went to the Republican National Committee to help pay for other races and not to the Romney campaign (he redistributed the wealth, if you will). And the need for new contributors is a byproduct of relying on high-dollar donors, who max out after contributing $2,500 and thus can’t be returned to for a consistent money stream throughout the campaign like smaller donors (John McCain had the same problem in 2008).
Given all that, not to mention the other problems the campaign is facing, this is a bit unexpected. The Washington Post’s Dan Eggen:
Mitt Romney’s campaign handed out more than $200,000 in bonuses last month to senior staffers, according to new disclosure records filed Thursday. Richard Beeson, Romney’s national political director, received a $37,500 payment on Aug. 31 in addition to his salary, according to records filed with the Federal Election Commission. In addition, records show at least six other top staffers each received $25,000 bonuses on the same date: campaign manager Matt Rhoades, general counsel Kathryn Biber, policy advisor Lanhee Chen, communications director Gail Gitcho, digital director Zach Moffatt and advisor Gabriel Schoenfeld. Two other employees received $10,000 bonuses.
“Win bonuses” are pretty common on political campaigns, though President Obama’s campaign did not hand out any after its convention this year. And $200,000 isn’t a ton of money for a campaign that will spend close to a billion dollars. But one has to wonder if it’s really a good idea for a struggling campaign that’s already in debt to hand out cash to its top executives while the candidate is fighting a perception of being a corporate raider .
The comparison to Bain Capital, though imperfect, is almost too obvious to make. Bain often bought companies, leveraged them with massive debt, and then paid the executives big bonuses regardless of whether the company succeeded. Something not entirely dissimilar happened to Bain & Co., the consulting firm that Bain Capital spun off of, when Romney went to rescue it.
And while the very top echelon of his campaign got bonuses, there was nothing for the ground troops. The field staffers who work too many hours manning lonely remote offices for the reward of meager pay and doors getting slammed in their faces didn’t get a bonus. Neither did drivers or clerks or janitors or opposition researchers forced to cable news 24 hours a day.
Again, this isn’t entirely unusual for any political campaign. People sign up knowing they’ll be worked hard for no money because they believe in their candidate and maybe hope they have a shot at a job if their guy or gal wins. But one can’t help wondering if the bonus model sheds some light on Romney’s view of the world and how businesses are run. It’s the people at the top who make it happen and deserve the bonuses, not the ones down below who are actually doing the work.
By: Alex Seitz-Wald, Salon, September 21, 2012
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