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 Medicare (Dis-)AdvantagePosted on Mar 3, 2009By Marie Cocco Good riddance to Medicare Advantage disadvantage. President Barack Obama’s bid to reduce the taxpayer-funded slush fund that flows to the managed-care insurance industry through Medicare is an emphatic, if overdue, effort to turn Washington around. So be ready for insurance-industry propaganda masquerading as concern for the elderly—and know that the facts belie the industry’s fantasies. For years, public and private studies of Medicare HMOs—euphemistically called “Medicare Advantage”—have shown that the program run by the insurance industry costs the government more per patient than the very same patient would have cost to treat under traditional Medicare. The most recent analysis by the nonpartisan Medicare Payment Advisory Commission puts the overpayment at 14 percent per enrollee, a surcharge that taxpayers pay for those Medicare beneficiaries who now get their coverage through private, managed-care plans (more than a fifth of the people in the overall program). “This added cost contributes to the worsening long-range financial sustainability of the Medicare program,” the commission says. The White House proposes to curtail this excess by tightening the bidding process through which the industry must compete for contracts. According to administration estimates, the savings would be $176.6 billion over the next decade. You would think that private industry would welcome the competition—fair bidding for government contracts is not an exotic idea, after all. But predictably, the insurance industry has resorted to scare tactics. Benefits would be cut! Patients would be harmed! Those who choose to get Medicare through private insurance plans would bear the brunt of cost reductions that are necessary to save Medicare as a whole! Advertisement Remember when HMOs were the next big thing in health care? Managed care was offered as an antidote to the Clinton administration’s attempt at broad health care overhaul. It was to be a magic elixir that cured just about everything that ailed the health care industry. Patients would have a limited choice of doctors and hospitals, but in exchange they were supposed to get more coordinated care that helped them stay healthier and avoid costly illnesses and procedures. In Medicare, the savings were to be poured into extra benefits—notably prescription drug coverage, at a time when there was no drug plan in traditional Medicare. Those who paid for the insurance—Medicare, for example, or private employers—would reap great savings, and the nation’s overall health expenditures would begin to decline. What happened on the way to this utopia? The insurance industry figured out pretty quickly that it was easy to make a buck by managing price, not care. “What happened in the late 1990s is that patients perceived that managed care plans were in business to keep them from seeing doctors, as opposed to helping them get the right care,” says Stuart Guterman, a Medicare expert at the nonpartisan Commonwealth Fund. Soon came the invention of “drive-by deliveries” that pushed women and their newborns out of hospitals within 24 hours, and “drive-by mastectomies” that sent cancer patients home to care for their own surgical wounds. “The concept has gotten kind of contaminated,” Guterman says. The backlash was political, with Congress passing legislation to end the worst abuses, and practical: In 1996, according to the Kaiser Family Foundation, 31 percent of workers covered by employer plans were in HMOs. By 2008, the proportion had dropped to 20 percent. The vast majority of workers covered by an employer-based health plan now choose more-flexible preferred-provider networks. The Medicare Advantage experiment is not without usefulness. But profit-making enterprises are motivated by money, not altruism. Whenever the private insurance industry says it can do something better than public insurance, be wary: Routing government money through private industry so that it eventually gets to the intended beneficiaries is often inefficient. Obama also plans to end the circuitous route that student loans now make from government coffers through private lenders and then, finally, to students. Direct government loans to students, studies have shown, cost taxpayers less. This country needs to manage health care better, by reordering the system in a way that rewards prevention and cuts down our reliance on costly procedures. This was supposed to be what managed care achieved. The greatest lesson of Medicare managed care isn’t that we shouldn’t manage care. It’s that the management must be done for public benefit, not private gain. Elsewhere: . CommentsAre you a Truthdig member yet? Login now, or register with Truthdig. Add Your Comment
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By wildflower, March 6 at 6:43 pm #
Well, KDelphi, I give Baucus an “F” in arithmetic:
“We need to come up with a uniquely American solution,” adding, “I think we’d be spending capital inefficiently to pursue single payer.
http://www.californiahealthline.org/Articles/2009/3/4/Baucus-To-Introduce-Comprehensive-Health-Reform-Legislation.aspx
Report thisBy KDelphi, March 6 at 2:46 pm #
Thanks for links, wildflower…all you say is true, and, they count on people who are sick or disabled being unable to do much about it.
That is why it is so painful to hear neo-libreals (who are suppoed to “feel yur pain”) come out so strongly against single payer.
I expect it from neo-conservatives.
If Congress goes with the Massachusetts plan, it will cost too much, and neo-cons will take back the Congress in 2010, and cancel “the plan” because “it didnt work and we told you so, its too expensive”.
B-b-b-ut, Merck(a)‘s unique! It sure as hell is…
Report thisBy wildflower, March 6 at 1:41 pm #
Re KDelphi
Kevin Drum mentions Tumulty and identifies a critical health care issue on his site “Screwing the Poor” that no one has really discussed:
“There are lots of things to hate about our current medical system. . .This is mine: the fact that the system massively overcharges you if you’re uninsured, and they do it just because they can. If you’re uninsured, you’ve got no leverage, no alternatives, no nothing. So you get screwed”
http://www.motherjones.com/kevin-drum
Report thisBy KDelphi, March 6 at 1:15 pm #
Thanks, wildflower—I’ve been keeping up with that. I would try to do something here in the city, but, I am moving right now. I call DC almost every day on this one. BaucASS’ secretary probably hates me by now. (Use Credo long distance—you get free speech call to DC—no I dont work for them. I also dont work for AT&T, which Congress obviously does)
Here is why, turning to Senator BaucASS for “death care industry” “reform” is a waste of time—-which is a waste of lives. They let ONE dr from PNHP attend, as well as Rep Conyers. But, the tone towards them was disrespectful and dismissive. Go to hell, Dems. Merck(a) is not ready? What bullshit.
$1m, he’s not gonna give that up for 2010.I love Ted Kennedy , but I really wish he would get with the program! “Uniquely American (or Merckan?) solution”? Why?? HOw are we so different from Europeans or Canadians? The “go west young man ” bullshit, is really just TOO much!!!
From PNHP
Kaiser Family Foundation
March 3, 2009
Health Care Reform Newsmaker Series: Sen. Max Baucus (D-MT)
Q&A
KAREN TUMULTY: Karen Tumulty from Time Magazine. What about, I mean, the concepts that are in a number of plans including yours – would allow people to buy into a Medicare program or a Medicare-like program? You say nothing is off the table, I mean, where does single payer fit in to all of this?
SEN. MAX BAUCUS (D-MT): I think single pay – Merck is not ready for single pay. I mean, America. We are a bit different than people in other countries. We are not Europe. We are not Canada. We are America. It is “go west, young man.” It is entrepreneurialism. It is creativity. It is innovation and so forth. And I think we have come up with a uniquely American solution which is a combination of public and private, because we are America. I think that we would be spending capital inefficiently by trying to pursue a single pay system when we have another pathway to meet the health care reform available to us.
I think it should be about choice, flexibility in our reform package, and I think this country does not want single pay. This is not a single pay country. Some suggest it, but I don’t think it’s there. I think we could make better use of our time trying to enact meaningful comprehensive reform basically along the lines of the white paper which is very similar to what President Obama is suggesting. It is somewhat similar to the Massachusetts plan, and that, I think, is a better use of our time.
We hear you loud and clear BaucASS. No Freudian slip here. Merck is not ready.
Report thisBy wildflower, March 5 at 2:55 pm #
RE MRP: “On the flip side I have also read disturbing articles regarding the government creating overseers that will dictate to the doctors what medical procedures will be allowed based on age.”
While I’ve a read a great number of complaints about “private insurance overseers” dictating to doctors about treatments, I’ve never read anything that even remotely resembles the situation that you described in regard to Medicare. Even if it there has been some discussion about the situation you describe, however, wouldn’t to be more appropriate to just correct the matter rather than to use it as an excuse to continue supporting a for-profit system that many people in America cannot afford:
“According to the U.S. Census, 47 million Americans don’t have health insurance. In a 2005 article in the NEW YORKER, Malcolm Gladwell enummerated some of the consequences of being uninsured:
The leading cause of personal bankruptcy in the United States is unpaid medical bills. Half of the uninsured owe money to hospitals, and a third are being pursued by collection agencies. Children without health insurance are less likely to receive medical attention for serious injuries, for recurrent ear infections, or for asthma. Lung-cancer patients without insurance are less likely to receive surgery, chemotherapy, or radiation treatment. Heart-attack victims without health insurance are less likely to receive angioplasty. People with pneumonia who don’t have health insurance are less likely to receive X rays or consultations. The death rate in any given year for someone without health insurance is twenty-five per cent higher than for someone with insurance. Because the uninsured are sicker than the rest of us, they can’t get better jobs, and because they can’t get better jobs they can’t afford health insurance, and because they can’t afford health insurance they get even sicker.”
http://www.pbs.org/moyers/journal/05092008/profile.html
Report thisBy MRP, March 4 at 6:17 pm #
(Unregistered commenter)
Marie, your last sentence says it all and I agree with your view.
On the flip side I have also read disturbing articles regarding the government creating overseers that will dictate to the doctors what medical procedures will be allowed based on age. Other countries already do or have tried this.
In other words if an elderly citizen wants to be treated for some disease Medicare/Government might determine that due to the persons age they would not be allowed treatment under the Medicare plan. If the oversight board does not see a bang for the buck so to speak you won’t get your treatment. So those that currently get treated for macular degeneration, for example, might not get treatment until they lose sight of one eye, that was one example given in the article. Or for an elderly person with cancer they might not be given treatment options because of their age. I do agree that people need to come to terms with growing older and trying to prolong the inevitable. I do think we try to “preserve” our elderly in the poorest of conditions (nursing homes) more for our benefit than theirs. But I also hate to think that I will not be given a chance for a treatment because I am too old. Maybe that is the sad fact of life. And who has the right to say that based on your age you are not a candidate for treatment. Some 90 year old folks have more drive and are more active than many 40 year olds I know.
Report thisNothing comes without strings, I just have to wonder what strings a National health plan will have attached.
By Outraged, March 4 at 2:32 pm #
Re: kdephi
There is now a petition from PDA to ask Obama to give Rep. Conyers a seat at the table. Sign this one folks!
The letter:
Recent polling indicates a super-majority of Americans want a national healthcare system. Both you and your Secretary of Health and Human Services have publicly stated support for single-payer healthcare, yet at your healthcare reform meeting on March 5, not one single-payer advocate has been invited to the table.
Single-payer healthcare is the solution to what ails us.
I welcomed your promise to clean-up Washington. The healthcare corporations have made billions of dollars for their CEOs and stockholders at the expense of ordinary working Americans for years, and they have used that money to make generous contributions to candidates and office-holders. Are you afraid of them while you have the majority of Americans covering your back?
You have a strong ally in Rep. John Conyers, the leading proponent of single-payer healthcare in Congress. Please invite him to attend the March 5 meeting.
http://capwiz.com/pdamerica/issues/alert/?alertid=12829556&PROCESS=Take+Action
Report thisBy KDelphi, March 4 at 1:21 pm #
outraged—thanks for all the good links! (there are peitions to sign and letters/calls to be made at many of them—if you care about these issues, peeps, please go! thanks!)
BTW—can anyone tell me what the hell the difference is, when Pres. Obama and Sen Baucus dont allow even one advocate of single payer to attend the session, and, the Bush Adminis. not allowing the environmental groups in on our energy policy meetings?
The death insurance industry will bankrupt any plans for reform…back to moving! (thank gawd!)
Report thisBy wildflower, March 3 at 11:02 pm #
Another excellent article, Marie Cocco. I’ve also heard many “Advantage” insurers don’t pay their bills, which creates another troublesome situation for patients.
If the insurers aren’t paying their network physicians, eventually the physicians are forced to drop the insurers, which means patients are forced to either find a new family physician or pay cash to maintain their current family physician.
It’s easy to understand why everyone is fed up with the “Advantage” system – except for politicians, lobbyists and insurance corporations, of course.
Report thisBy FiftyGigs, March 3 at 10:34 pm #
Outraged, that was a great comment. Thanks. I’m going to check them all out.
Report thisBy Outraged, March 3 at 9:06 pm #
Good riddance is right. There are some petitions currently available to sign regarding healthcare issues.
This from Healthcare NOT Warfare:
“As Martin Luther King Jr. observed forty years ago, “A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.” While the insurance and pharmaceutical industries post huge profits, the U.S. health care crisis grows steadily worse.”
http://pdamerica.org/articles/misc/2008-02-29-14-19-42-misc.php
This from Consumers Union of the United States:
“This week, the administration convenes a national summit on health care. The giant insurance companies would love to keep dictating our health care, deciding whether or not we get it, and how much it costs, while they rake in fat profits. But we need a plan to enforce some new rules and make sure everyone has the chance to get covered.”
https://secure.consumersunion.org/site/Advocacy?cmd=display&page=UserAction&id=2055
This from MoveOn.org:
“Fixing health care is a key part of fixing the economy.
But Congress has to act, and in the last few days, too many members of Congress have been on TV saying that we can’t afford to fix our health care system right now. On the eve of this summit, we need to let them know—we can’t afford NOT to.”
http://pol.moveon.org/thisyear/?id=15693-8549600-87SCTUx&t=3
This from Change.org:
“Senate Finance Committee Chairman Max Baucus (D-MT), who ruled single-payer “off the table” before he even started considering healthcare reform, is now pressuring the Congressional Budget Office (CBO) to favorably judge his health plan as financially sound—even though it isn’t.”
http://www.change.org/ideas/294/view_action/sen_baucus_we_need_accurate_numbers_not_creative_figuring
The California Nurses Asso. has this headline:
“First-of-Its Kind Study: Medicare for All (Single-Payer) Reform Would Be Major Stimulus for Economy with 2.6 Million New Jobs, $317 Billion in Business Revenue, $100 Billion in Wages
Establishing a national single-payer style healthcare reform system would provide a major stimulus for the U.S. economy by creating 2.6 million new jobs, and infusing $317 billion in new business and public revenues, with another $100 billion in wages into the U.S. economy, according to the findings of a groundbreaking study released today. It may be viewed at http://www.CalNurses.org.
The number of jobs created by a single-payer system, expanding and upgrading Medicare to cover everyone, parallels almost exactly the total job loss in 2008.”
http://www.calnurses.org/media-center/press-releases/2009/january/first-of-its-kind-study-medicare-for-all-single-payer-reform-would-be-major-stimulus-for-economy-with-2-6-million-new-jobs-317-billion-in-business-revenue-100-billion-in-wages.html
Additionally, this article at Alternet:
“While a Democratic polling firm has just found, as pollsters always do, dramatic public support for public health coverage, Democratic leaders on Capitol Hill appear divided, as they have always been, over whether to take a comprehensive approach to health care.”
http://www.alternet.org/healthwellness/124152/three_reasons_why_single-payer_health_care_has_become_possible/
Labor supports it:
http://www.laborforsinglepayer.org/
Speaking of Labor, I was emailed this video today regarding the Employee Free Choice Act, check it out(approx 2min):
http://www.youtube.com/watch?v=mOM0AMUqviY
Are these guys NUTS or what! It’s the same with single payer…lies, lies and more lies, along with scare tactics extraordinaire.
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