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  • Liberals’ Main Medicare Cost-Reduction Strategy Already Proves Ineffective

    Typically, demonstration programs exist to prove the effectiveness of a reform proposal before implementing it nationwide. This was apparently forgotten in the drafting of Obamacare, which relies heavily on accountable care organizations (ACOs) to curb runaway spending in Medicare and the health care system at large.

    Supporters claim ACOs, a form of managed care run by hospitals and physicians, will reduce health care spending and improve quality of care by encouraging better coordination and communication among providers. But the results of a five-year demonstration program show this won’t necessarily be the case.

    The demonstration included 10 leading health care systems, which were offered financial incentives to meet quality measures and reduce the cost of treating Medicare patients. Writing for The Washington Post, Amy Goldstein reports:

    In 2010, the final year, just four of the 10 sites, all long-established groups run by doctors, slowed their Medicare spending enough to qualify for a bonus, according to an official evaluation not yet made public. Two sites saved enough to get bonuses in all five years, the evaluation shows, but three did not succeed even once.

    Gail Wilensky, a former administrator of Medicare and Medicaid, said that as leaders in the field, the program’s participants “should have blown it out of the water.” She concludes, “If it was this tough for this group that I had just assumed would be hands-down winners, what does it say for groups that don’t have a long history of coming together?”

    Unfortunately, the authors of Obamacare didn’t wait around to see how effective ACOs would actually be before including them as a main cost-reduction strategy in their health care overhaul. According to Goldstein, “Although important details differ, the basic contours of the experiment and new ACOs are the same: Medicare shares savings with health organizations if they can treat older Americans for less money and attain specific hallmarks of quality.”

    As Congress considers spending reductions to accompany a raise in the debt ceiling, conservatives have offered proposals to transform Medicare—the main culprit behind long-term deficits—to an affordable, sustainable program. President Obama has been reluctant to offer a detailed strategy of his own, but as Goldstein points out, “Democrats counter that the 2010 health-care law contains important tools that will curb spending, citing ACOs as a prime example.”

    Even if they were effective, the Administration expects ACOs to achieve maximum savings of $960 million, barely putting a dent in Medicare’s likely $36.8 trillion in long-term unfunded promises.

    If liberals are serious about reforming Medicare to reduce the program’s cost and improve its quality, it might be time to look beyond strategies that have already proven ineffective. A good place to start would be Heritage’s “Saving the American Dream” plan.

    Posted in Obamacare [slideshow_deploy]

    3 Responses to Liberals’ Main Medicare Cost-Reduction Strategy Already Proves Ineffective

    1. Francis A. Toto San says:

      Will The Imminent Collapse Of The Mammoth Healthcare Establishment Strike A Deathblow To The Stagnating, Fragile US Economy And Trigger The Collapse Of The US Economy Fostering Yet Another Tragic, Unprecedented, Man-Made National Disaster That Ruins The Country?

      June 2nd 2011: Brian Williams, NBC Evening News

      “Good evening. A lot of people have been saying lately, this country is pulling out of economic recession, perhaps. But tonight, there is evidence to the contrary, and lots of it. Some bad set of numbers that show real trouble still ahead: housing, home prices at their lowest since 2002. There are now 2.25 million foreclosures in this country. There's jobs, unemployment is stuck at 9%. Eight million Americans are on unemployment–all those jobs gone away in the recession. And the cost of living is hitting hard: gas, food, everything is so expensive, that a lot of people, millions of Americans, are just spending to live. We want to start out by taking a big picture look before we whip around the country. Tom Costello is here with us with that, Tom: “We had such strong economics earlier in the year, that a lot of people were hoping we were beginning to see a bit of a turnaround. Things have slowed dramatically.”

      Reports Of The “Fragile” US Economy Use An Accurate Metaphor. Scientifically, The US Economy Has Reached The State Of “Unstable Equilibrium” And High Criticality. It Means That The Entire US Economy Is Now Vulnerable To The Slightest “Jolt” Or “Perturbation” That Triggers A Classic, Catastrophic Evolutionary Event And Causes The Economy To “Implode.”

      An example of unstable equilibrium in the physical world is the bicyclist who is riding at an optimum speed and therefore has high stability. A strong gust of wind comes up; but this force does not disturb his forward motion. However, as the bicyclist starts to slow down, he becomes increasingly unstable; at zero momentum he reaches maximum instability and is teetering and tottering just trying to stay upright. Now even a small gust of wind could cause him to crash. It’s the little bang, that triggers the big bang.

      Analogously, when a dynamic, moving system, such as a national economy, or an industry, slows down and reaches the point of unstable equilibrium, criticality, and the state of maximum instability, it is likewise teetering and sea-sawing. Now the system becomes increasingly vulnerable to a relative minor impact, such as the single negative media event that triggers a sudden and violent stock market crash.

      Other examples of this phenomenon are the avalanche and the wildfire. Preceding the avalanche, the snow builds and builds and on the surface looks calm and quiet; however there are dramatic changes in the “deep structures” of the snow mass. The physics and chemistry of the snow are changing dramatically, yet unseen. At some point, the snow mass reaches its critical threshold and becomes highly unstable, extremely vulnerable to a relatively small jolt such as a truck backfire or a shotgun blast in the near vicinity. Such a minor force triggers a sudden and violent discharge of the pent up energy. A hundred million tons of snow starts snowballing downward at 100 miles per hour.

      Similarly, in a growing forest the vegetation grows to the point were the trees choke off light to the smaller vegetation. The dying vegetation creates high levels of “fuel” and brings the entire forest to the state of unstable equilibrium. Now, a careless smoker tosses a lit cigarette that ignites a wildfire that can rage out of control and ultimately consume the entire forest leaving a wake of destruction and death.

      Finally, another classic example is the balloon that is inflated beyond its normal elastic limit and becomes rock-hard. The balloon is now extremely vulnerable to the slightest pin prick; it’s a little bang that triggers a big bank. This predicament is often described by the old saying that the “bubble burst.” Today, bubbles burst primarily because of mismanagement–a “little neglect.”

      Historically, When The US Economy Slows Down–Manifested As A Drop In The Gross Domestic Product–The Healthcare Industry Likewise Slows Down. Historically, When The US Healthcare Establishment Reached Its Catastrophic Threshold Of 4%, There Was Massive Failure And Great Upheaval. Hospitals Were Closing At An Unprecedented Rate. Business Failures Soared. This Predicament Has Been Extensively Demonstrated In The Private 27-Year R&D Program In The San Diego Region.

      In 1990, the mainspring US Physician Services Industry, posting revenues of $157.4 billion, suffered a dramatic crash that was equivalent to twenty 1929 stock market crashes. The following year, 1991, the mammoth US Hospital Services Industry likewise suffered a dramatic crash, also equivalent to twenty 1929 stock market crashes. The big crash of the hospital industry demonstrated that the revenues in hospitals are driven to a great extent by the work of doctors. It was the classic domino-effect crash.

      The US Dental Services Industry suffered its first big crash in 1985. There was a big shakeout in dentistry in 1987. This shakeout demonstrated that the dental industry had entered into the mature stage of its life cycle. The occupational community of American dentist ignored this event and did not prepare to make the mandatory breakout. It was another example of a “little neglect that breeds great mischief.”

      I n 2009, after having been in the mature stage of its life cycle for 24 years (a very long time), the stalwart US Dental Services Industry, posting revenues of $102 billion suffered its second big crash.

      This second, or “killer,” crash was equivalent to forty-three 1929 stock market crashes. This violent, sudden event plunged American dentistry into the decline-death stage of its life cycle–the Nemesis Vortex.

      It was the first primordial sign that healthcare had started to collapse based on the scientific model of how industries travel through the end stages of their life cycles: namely, erosion, dissolution, contraction, and collapse.

      In 2009, the other two major industries reached their historical 4% catastrophic threshold, demonstrated high instability, and duly became vulnerable to the same powerful catastrophic phenomena that plunged American dentistry into the decline-death stage of its life cycle. This predicament has been universally ignored–it was another example of a “little neglect.” Now time, precious time, is rapidly running out!

      Visit the Right Moves Project–it's the definitive authority on the healthcare crisis for 28 reasons. This 27-year R&D program produced the real story and the real solution to the classic, textbook problem.

      Visit http// :www.rightmovesproject.com and also: http//:dental.rightmovesproject.com.

      Because they are based on a mathematical law the claim made here are not predictions; predictions contain uncertainty.

      Francis A.Toto

      San Diego

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