Thursday, July 26, 2012

Newt Gingrich's To Save America 8: Medicare

In my latest reading of To Save America: Stopping Obama's Secular-Socialist Machine, Newt Gingrich talks about Medicare.  He laments that a lot of money on Medicare is wasted on account of such things as Medicare fraud, lack of coordination, paperwork, etc.  Earlier in the book, on page 210, Newt says that the American health care system does not focus enough on incentivizing quality care, and he states that "we need a reimbursement model that takes into account the quality of the care delivered, not simply that it was delivered."  My impression is that Newt dislikes the fact that the reimbursement system pays for a bunch of treatments and doctor's visits, without really caring if those things are making people better.

Newt says that President Barack Obama acknowledges that there are "hundreds of billions of dollars in waste and fraud" in the American health care system (Obama's words on page 218).  Newt does not believe, however, that President Obama has done enough to tackle the problem.

At the same time, on page 94, Newt criticizes Obamacare for cutting Medicare by half a trillion dollars to "pay for other aspects of the reform plan, like government subsidies and Medicaid expansion."  He says that, according to the Centers for Medicare and Medicaid Services, these cuts include "home health ($39 billion); hospitals ($131 billion); skilled nursing facilities ($22 billion); and Medicare Advantage benefits ($101 billion)."  Newt also states that the Mayo Clinic announced that "its Arizona facilities would stop seeing Medicare beneficiaries because the federal government does not pay the clinic enough to even cover its costs."

How do defenders of President Obama (or fact-checkers, or whatever) respond to these sorts of criticisms?  This article states the following (and remember that "ACA" stands for the Affordable Care Act, meaning Obamacare):

"So does it 'cut' Medicare by $500 billion?  Medicare spending will continue to grow, according to the Centers for Medicare and Medicaid Services (CMS), but ACA will slow that growth. According to a report from the Kaiser Family Health Foundation  over the next 10 years, the federal government will devote about $500 billion less to Medicare than it would have without ACA.  CMS and the Kaiser Family Foundation tell ABC News that there will be no benefit cuts to Medicare.  They say instead of Medicare’s being cut, there will be much more spending at the end of a 10-year window, but it does slow the rate of that growth...CMS says—and Kaiser agrees—that spending will be reduced by getting rid of fraud and ending overpayments to private insurance companies. It sends a message to those insurance companies: Operate more efficiently.  And instead of cuts, the CMS says they will be able to fund new benefits, including free preventive care and broader prescription coverage, including closing the 'doughnut hole' affecting seniors."

According to this article, the Centers for Medicare and Medicaid Services----the same group that Newt cites as an authority----states the Obamacare slows down the rate of Medicare's growth, and that the savings (if you will) come from tackling fraud and overpayment to insurance companies rather than from cutting benefits to seniors.  Moreover, the CMS says that new benefits are included, such as preventative care and "broader prescription coverage" (the article's words).  Newt himself is an advocate of preventative care and Medicare covering prescription drugs because those prevent emergencies that cost the health care system a lot of money.  Is Obamacare already doing (or will it do) things that Newt thinks the government should be doing?

I think a good question is this: How can we get rid of unnecessary reimbursements, without also killing a lot of necessary reimbursements?  Newt says that the government should be more conscious about tackling Medicare fraud.  Remember the episode of The West Wing in which Democratic candidate for President Matthew Santos (played by Jimmy Smits) lauded Medicare for not having that big of a bureaucracy?  Newt addresses this argument (though he doesn't mention Santos) on page 220:

"So Medicaid has nearly three times the improper payment rate of all government.  That is one reason the Left can tout low administrative costs for Medicare and Medicaid: they simply write checks without effective oversight.  They pay more in fraud than they gain in lean administration."

I'll stop here.  By the way, check out this article on what the Obama Administration is doing about Medicare fraud.

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