Saturday, September 29, 2012

Changes to Medicare

The PPACA creates new medical practice arrangements medical homes, accountable care organizations and bundled payments.  Bundled payments are also known as capitation.  Doctors are paid fixed sums of money to care for patients. Under these measures, providers are deliberately given a strong financial incentive to self-ration the services they provide. Since doctors get a fixed sum for providing services, the more money they spend on patient care, the less cash left over to flow to their bottom line.
More than 60 percent of doctors are now employees of hospitals and health systems. The new trend. 
Almost two-thirds who signed employment contracts in 2009 were hired by hospitals. This includes half of all doctors leaving residency training.  The president’s plan envisions that the institutions employing doctors will implement strict guidelines to regulate the decisions that providers can make, in order to steer doctors to more “efficient” choices.
Studies show that productivity declines as doctors enter into these staff-model arrangements. Would a salaried worker work harder than a single practitioner who is responsible for their own livelihood?  Why would the new model introduce genuine innovations in how care is delivered that change how it actually improves quality while lowering costs?  The Doc doesn't care as they become salaried workers. 
Most of the enduring innovation in how care is delivered came from start-up companies that pioneered successful new concepts that in time became mainstream.
The final tool that the president implements is an explicit cap on the amount that Medicare spending can grow each year. Obama says that Medicare’s rate of growth can’t exceed 0.5 percent of the rate of growth of gross domestic product. So if GDP grows at 2 percent, Medicare spending can’t rise by more than 2.5 percent. 
The PPACA transfers 700 billion over 10 years to Obamacare to assist in paying for Obamacare.  In it's place a 15 person panel is appointed to cut costs in Medicare.  The taxes cannot be raised to the people receiving Medicare.  The cuts will come from providers, doctors, hospitals.  How many will want to take medicare patients at a reduced cost?  What happens to the cost of the PPACA after the first 10 years?  The cost of 70 billion a year will be borne by the taxpayer.

So Obamacare is saving Medicare.  With the issues above, how does that happen? 

We have 2 physicians in the family, both successful practices.  Both are selling their practice and exiting healthcare.

9 comments:

  1. So basically, a doctor may skip a test you needed to pad his bottom line. rationing sucks and this is just the start of it. There will be shortages of treatments, of doctors everything.

    Shortages are created when you put in artificial price controls. implicit or explicit.

    Those 45 and over will suffer the most.

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    1. "Shortages are created when you put in artificial price controls. implicit or explicit. "

      If you aren't designing haunted houses at this time of year Live, you have truly missed your calling.

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    2. Go study price controls in history.It's a fact.

      You can start with this published paper from the CATO institute.

      http://www.cato.org/pubs/regulation/regv24n1/morton.pdf

      how about something more current like price controls limiting the availability of cancer drugs?

      http://reason.com/blog/2011/08/08/government-price-controls-prod

      Maybe an article from the New York times will help convince you.

      http://www.nytimes.com/2012/04/21/world/americas/venezuela-faces-shortages-in-grocery-staples.html?_r=0


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  2. get healthy and stay healthy. that's my best recommendation. But even the healthiest old farts breakdown.

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  3. I have a feeling that you will still be able to buy the level of care that you feel is necessary even as the level of care for the average citizen drops. We may have the medical diagnostic machine like the one in the film Idiocracy where you put a probe up your ass and one in your mouth and it will diagnose your condition and dispense your medicine. We will have to come up with something like that to automate things and move people through.

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  4. "Doctors are paid fixed sums of money to care for patients. Under these measures, providers are deliberately given a strong financial incentive to self-ration the services they provide."

    Sigh, here we go again. Can anyone here tell me how this is somehow new and different from what was happening before Obamacare? Can someone tell me how this wasn't exactly the setup that already existed with doctors who work for an HMO who are dictated to see a certain level of patient's per day? Medicare has been doing this for quite some time and ironically, it was meant to be more of a market driven solution wherein doctors and hospitals had an incentive to deliver more cost efficient care. As with anything involving the market, however, the predictable result was that service was cut rather then improved.

    Why is it freaking impossible for anyone right of center on this board to look at what occurred before some law was implemented? Ah, but of course, it may have already existed, but that damn Obama made something that was working perfectly fine a horrible new monster.

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    1. Max, The doctors are becoming employees of the hospitals. Sigh, that's different. The hospitals are buying practices, the insurance companies are buying hospitals. Not all doctors work for the Kaisers of the world. Until recently they worked in their own practice.

      I guess as the election draws near the people left of center become more left more angry as the potential for change really draws near and may become a reality. Then again maybe we can have 4 more years of divisive government led by the divider in chief.

      Explain to me how Obamacare is a solution to the alleged broken healthcare system. Explain how half of the people that will be newly insured and will end up on Medicaid will be better than what they have today as doctors are refusing medicaid patients.

      By the way get ready for more cuts in service as they discover, shizam, there are not enough doctors to go around and not enough money to pay for it. But we can always tax those rich bastards, tax the hell out of the oil companies and crucify the drug companies and put them in there place once and for all. We will all then be truly equal with shitty healthcare for all except the rich who will go where it takes to get their healthcare needs addressed. But then again the government can always revoke their passports and let them suffer like the masses.

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    2. Max,

      Outside of a sense of professionalism or wanting to do what's right, there is a motivational difference between working for a salary and working on one's own. It's not the same profession, but my spouse is self-employed and (usually) additional hours spent for more clients, or on the same clients on hourly-rate work, results in more income. Doctors who have their own practices, while I'm sure they are motivated to see patients for the obviously right reasons, would be willing to see more on a weekly basis because that should result in additional revenue. Seems reasonable, as doctors are human beings also, yes? The same reason lawyers, engineers, accountants and other professionals like increases in billable hours.

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    3. Jean....I truly think think that Max does not understand the motivation of a self employed person,nor little of Human nature.
      Appears to have Left hand over his eyes.

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