Tuesday, August 28, 2012

The Medicare Debate, Part I

Turn on your TV and I bet you'll hear one of the Presidential candidates claim that if we elect the other guy, Medicare patients are bound to suffer. You'll hear Romney allege that Obama took $700 billion out of Medicare to pay for Obamacare.

It's true: Obamacare comes with a $716 billion reduction in government's Medicare expenditures over the next 10 years. The majority of these cuts will reduce how much doctors and insurance companies will be reimbursed for the care that they provide/fund.

But there's a perception out there that since these cuts are made to providers, they won't affect patients. A recent Reuters article "Top Six Myths about Medicare" says that the cuts to providers are "mostly meaningless to patients." In National Journal's "10 Things You Need To Know About The Medicare Debate", Thing #1 reads: "President Obama's cuts to Medicare do not affect any benefits." And a Washington Post analysis says "there's one area these cuts don't touch: Medicare benefits."

One of the most important medical benefits people have is the ability to be seen by a doctor when in need. Arbitrarily cutting pay for doctors could certainly impact this benefit.

If a doctor's pay per patient is reduced, he'd need to cram in more patients per day in order to earn as much as before. This trend would leave fewer available doctors for people with urgent medical needs. Some doctors would look to avoid Medicare patients altogether. A 2010 American Medical Association survey of doctors attests to this.

The broader issue here is the unwillingness of some to consider or even acknowledge the existence of unintended consequences of government intervention. And if we can disagree about the effects of this one small aspect of Obamacare, imagine what other unforeseen consequences lie within its 2,700 pages.

In my next post I'll analyze Paul Ryan's proposal for Medicare. I skimmed it the other day and it's more complicated than either side would have you believe.
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