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  • Better Conservatives Needed

    The Left is winning the big health care policy victories with the help of rank and file GOP members and their feckless Republican Leadership in Congress.

    The latest example is the enactment of H.R.6331, The Medicare Improvements for Patients and Providers Act. In spite of threatened Presidential veto, the bill passed the House this week by a lopsided 355 to 59 vote. The bill does nothing at all to reform the Medicare dinosaur, and every provision simply reinforces its worst features, bureaucratic central planning and its mind numbing price controls. Because physicians are facing a 10.6 percent Medicare payment cut under Congress’s own administrative pricing formula, the House voted to stop its own handiwork from actually taking effect (good idea), but of, course, it preserved the very administrative pricing formula that causes this annual Chinese fire drill in the House and Senate (bad idea). So, this is Victory #1 for the Left’s prized Medicare’s pricing regime. This means that Congress will continue to exercise even greater control over physicians’ livelihood next year and the year after that, when the magnitude of the congressionally ordained and scheduled payment cuts become even larger.

    Under the curious scoring for entitlement spending, this delay in the scheduled Medicare physician cuts is, of course, going to cost money. So, the congressional liberals think that the best way to offset that assumed cost is to cut $13.6 billion out of the popular and successful Medicare Advantage program over the next five years and $50 billion over the next 10 years. If you think that this is because Congressional liberals have come down with a sudden case of fiscal responsibility, you haven’t got a clue. Scott Gottlieb,M.D. a former HHS official writing in the June 24th edition of The Wall Street Journal, said it best,”Democrats hate Medicare Advantage and have been trying to cut it for quite some time, because they don’t like health care markets.” The urgency for congressional liberals and ideological opponents of health care markets is that today one out of five seniors today are choosing private health plans, exercising an unprecedented level of personal choice in a consumer driven market that is rapidly growing, especially in rural America. For congressional liberals, many of whom are wedded to a “single payer” government run health care system, its essential to cut off this initial success at the knees. The fewer private health plans in Medicare, the better. None at all would be best. Meanwhile, chalk up the bill’s Medicare Advantage provisions as Policy Victory # 2 for the Left.

    The bill also terminates new contracts, and blocks and delays competitive bidding for durable Medical equipment and supplies (scooters, wheelchairs, hospital beds and oxygen equipment,etc) in the Medicare program, a process which Congress authorized in 2003. The new competitive program, starting in 10 metropolitan areas, was supposed to go into effect on July 1, 2008. The competitive bidding for durable medical equipment and supplies would result in a 26 percent reduction in Medicare payment for these items. Competition does that sort of thing in controlling costs. But the medical suppliers complained to lawmakers about competitive bidding, and wanted it stopped before it got off the ground, and the House of Representatives, in a bipartisan spirit, complied. For good measure, the House revised the government existing fee schedule downward 9.5 percent (Doctors please take note) in order to make up for the savings that would have otherwise come by making the dreadful competition legal. Killing competition and market based pricing in Medicare and tightening up Medicare’s administrative pricing in one bill. A double play! Chalk that up as health policy Victory #3 for the Left.

    Meanwhile, the bill expands benefits and contains no serious reforms of the Medicare program. Medicare spending is up 47 percent in the last four years. That is just the beginning. The Congressional Budget Office projects that Medicare costs will rise an additional 7 percent annually over the next decade – nearly doubling in nominal dollars. Over the long-term, the combination of 77 million retiring baby boomers and rising health care costs is projected to push Medicare spending from 2.7 percent of GDP today to 9.4 percent of GDP by 2050 – which would require massive tax increases or spending cuts. Congress needs to reform the program, not just add benefits and reinforce the worst features of a broken system.

    Posted in Economics [slideshow_deploy]

    5 Responses to Better Conservatives Needed

    1. Rick Puckett, Greens says:

      I am a conservative AND DMEPOS owner. I am all for free market competition; however the CMS competitive bidding was seriously flawed in that those who didn't win contracts (lowest bids) were shut out completely from offering goods/services. Thousands of small-medium sized DMEPOS businesses faced being shut down, therefore ELIMINATING the very competition that is the foundation of Free Market Enterprise. In Dallas Texas alone, 27 DMEPOS were going to have to cease operations. How can this be good? No, even though I am a Reagan Conservative, CMS competitive bidding program was shaping up to be a disaster!

    2. Harry in Chicago says:

      So Rick, the U.S.taxpayers should continue to pay higher prices so DMEPOS won't be shut down? That's a little selfish isn't it? Besides, if you believe in free market principles, then these businesses you claim would cease to exist should go out of business and rightfully so. A free market will eliminate any company or business that cannot offer goods and services at affordable prices. I don't think a government bailout, because that is essentially what it is, is much of a solution.

    3. Harry in Chicago says:

      One more thing Rick, read the title of the article again and then your comments.

    4. Marie in San Francis says:

      Harry, you completely missed Rick's point. He did not say that he thinks taxpayers should continue to pay higher prices. In fact he said the opposite. He said that the competitive bidding is flawed in that DMEPOS who bid the "LOWEST BIDS" were shut out completely from offering goods/services.

      I am not against lowering prices to save taxpayers money. I think it's needed. What I and Rick are against is shutting out DMEPOS who are willing to provide services at the new lower prices. How does that help competition? It doesn't. In fact is reduces service because winning bidders have less incentive to give quality service if they know that beneficiary choices are limited to only winning bidders.

    5. Terrance, Richmond, says:

      Ok Marie, lets go over this one more time, because Harry's got it right. Rick said, "I am all for free market competition; however the CMS competitive bidding was seriously flawed in that those who didn’t win contracts (lowest bids) were shut out completely from offering goods/services." Now this is worded a little poorly, but I'm sure that if we think about it, we understand that the bidding process is like Golf. Low score wins. What Rick is complaining about is that companies like his, who were unable to make the lowest bids, and thus win contracts, were shut out completely. I'm unsure how the Medicare process was supposed to work, but the bid process for Virginia government projects resulted in an understood first call list made up of the companies that were consistently able to offer the lowest bids on projects. In practice, if a company came in high several times, the folks responsible for making the decisions stopped considering them at all. This is not a bad thing. Free Market, supply side economics is about making sure that we have free competition and diversity in the marketplace, but the Government should not be propping up an uncompetitive company in the name of diversity.

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