Vermont Medicaid Hospital Taxes - FY 2012 Budget

"The Association does not oppose the fee bill (H.436). As you know, the fee bill contains, among other things, the hospital provider tax. The House Ways and Means committee supported the Administration’s recommendation to increase the hospital provider tax to the greatest extent possible. The $17.4 million proposed tax increase for SFY 2012 brings the total tax paid by hospitals to $111.5 million. These tax revenues, when matched with federal Medicaid funds, generate more than $230 million – $48 million more than the state eventually pays hospitals and employed physicians to care for Medicaid patients."
--Quote from open letter to Vermont Legislators on H.202 from M. Beatrice Grause, RN, JD

President and CEO,Vermont Association of Hospital and Health Systems

I'm no expert on Medicaid and health care funding, but let me be sure I have this right. Hospitals will be taxed more to help balance Vermont's FY2012 budget. This will mean that additional Federal Medicaid dollars will flow into the state to help pay hospitals for services to Medicaid patients. Meanwhile, our Federal government now borrows  about 42 cents of every dollar it spends, including Medicaid dollars flowing to the states.

So, if all states do what seems to be a cool deal to get more Federal dollars from Medicaid, the Feds are required to borrow more to pay for the additional Medicaid support. It seems to me this tactic will drive up Federal Medicaid spending and more deficit spending/borrowing, some of which apparently will flow back to hospitals, at least in Vermont.

This seems to me a scheme to 'rob Peter (Federal budget in dire deficit mode) to pay Paul (Vermont's hospitals)' and exemplifies one of the problems with our present U.S. health care system. I remain unconvinced that ObamaCare or ShummyCare will solve this problem.

Granted, this is fundamentally a national issue that requires deep restructuring of entitlement programs. But Congress seems to have little stomach for that. Despite the rhetoric, we have yet to see any real action from Republicans or Democrats to reduce deficits.

Meanwhile, states will continue to milk 'the system' for their own benefit. In Vermont's case, the budget will be balanced partially via increased federal deficit spending, not unlike the use of ARRA funds in the previous two budgets.

We Have No Choice But to Ration Health Care

Why We Must Ration Health Care - NYTimes.com:

After reading the first few paragraphs of this piece, I was convinced that Singer is absolutely correct that health care rationing MUST be part of the equation in revamping our U.S. health care system. I have believed this from the onset of the debate a few years ago. Those who don't believe that rationing is essential are in denial.

Those who contend that 'health care is a basic human right' are obliged to answer the question: how much care and at what cost?

We should demand that our politicians talk about this reality. If they avoid it, they are disingenuous or dishonest or both. We simply cannot afford to treat every person for every possible condition with all possible means.

Of course, the devil is in the details. But without a discussion of rationing in the U.S. before we commit to an enormous change in the system, we will have done ourselves a terrible disservice. Without cost controls, including rationing of services and care, not just in the hard cases that Singer uses as examples, but more generally, we will have built a system doomed to fail.

We should demand that our politicians, particularly those supporting single-payer health care to explain their position on rationing. In addition, we should ask them to explain to us how the proposal now in Congress deals with rationing.

TeamObama and others have a basic responsibility, as does the media, to put this subject on the table now.

Kudos to the times for giving the issue 'front and center' treatment.

"The case for explicit health care rationing in the United States starts with the difficulty of thinking of any other way in which we can continue to provide adequate health care to people on Medicaid and Medicare, let alone extend coverage to those who do not now have it. Health-insurance premiums have more than doubled in a decade, rising four times faster than wages. In May, Medicare’s trustees warned that the program’s biggest fund is heading for insolvency in just eight years. Health care now absorbs about one dollar in every six the nation spends, a figure that far exceeds the share spent by any other nation. According to the Congressional Budget Office, it is on track to double by 2035."

"Rationing health care means getting value for the billions we are spending by setting limits on which treatments should be paid for from the public purse. If we ration we won’t be writing blank checks to pharmaceutical companies for their patented drugs, nor paying for whatever procedures doctors choose to recommend. When public funds subsidize health care or provide it directly, it is crazy not to try to get value for money. The debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable. Then we can ask, What is the best way to do it?"

Is the U.S. Going Broke? - Forbes.com

Ahem, may I have a moment of your time Senator Obama and Senator McCain? I really would like your proposed solutions to the terrible problem outlined in this article from Forbes (click on the link below). Or would you prefer to tell me the sky isn't falling? Or is it more fun to talk about lipstick and pigs?

• How will you pay for the massive energy transformations you both promise?
• What will you do to control the costs and pay for Medicare and Medicaid?
• You are apparently not willing to bail out any more investment banks... because the Feds don't have the money?

 

Just one quote to entice you to read the full column:

"The real liability facing our government is $70 trillion. This represents the present value difference between all the government's projected future spending obligations and all its projected future tax receipts. This fiscal gap takes into account Uncle Sam's need to service official debt--outstanding U.S. government bonds. But it also recognizes all our government's unofficial debts, including its obligation to the soon-to-be-retired baby boomers to pay their Social Security and Medicare benefits.

Given current policies, each of the 78 million boomers can expect, on average, to receive $50,000, in today's dollars, from these programs in each and every year of retirement. Multiply 78 million boomers by a $50,000 annual payment and you get close to $4 trillion per year. This helps you see why our nation's true indebtedness is so extraordinarily high."

Is the U.S. Going Broke? - Forbes.com

U.S. Financial Condition and Fiscal Future

http://www.gao.gov/cghome/d08417cg.pdf

David Walker, The Comptroller General of the United States, has developed this briefing (click the link above) about the the status of government expenditures, focusing on Social Security and health care. I suggest browsing through this 35 page .pdf for a full assessment of where we're headed if we do nothing.

He chooses not to address defense spending, probably because that's a fundamental and basic responsibility of government and does not have the built-in demographic time bomb as do the 'entitlements.'

Medicaid and Medicare are in deeper trouble than SS.

Why don't we hear about this dilemma on the campaign trail? Is it because the problem surfaces beyond the next 4-tear term?

Some excerpts below:

Current Fiscal Policy Is Unsustainable

•The “Status Quo” Is Not an Option
•We face large and growing structural deficits largely due to known demographic trends and rising health care costs
•GAO’s simulations show that balancing the budget in 2040 could require actions as large as

•Cutting total federal spending by 60 percent or

•Raising federal taxes to two times today's level

•Faster Economic Growth Can Help, but It Cannot Solve the Problem

•Closing the current long-term fiscal gap based on reasonable assumptions would require real average annual economic growth in the double-digit range every year for the next 75 years

•During the 1990s, the economy grew at an average 3.2 percent per year

•As a result, we cannot simply grow our way out of this problem. Tough choices will be required
---------------------------
Key Dates Highlight Long Term
Challenges of the Social Security System

2009 - Cash surplus begins to decline

2017 - Annual benefit costs exceed cash revenue from taxes

2027 - Trust fund ceases to grow because even taxes plus interest fall short of benefits

2041 - Trust fund exhausted

--------------------------
Key Dates Highlight Long Term
Challenges of the Medicare Program

2007 - Medicare Part A outlays exceed cash income
2007 -“Medicare funding warning” triggered
2013 - Projected date that annual “general revenue funding” for Part B will exceed 45 percent of total Medicare outlays
2019 - Part A trust fund exhausted, annual income sufficient to pay about 80% of promised Part A benefits

-------------------------
Three Key Illnesses
•Myopia
•Tunnel Vision
•Self-Centeredness
------------------------
Four National Deficits
•Budget
•Balance of Payments
•Savings
•Leadership
------------------------
Key Leadership Attributes Needed for
These Challenging and Changing Times
•Courage
•Integrity
•Creativity
•Partnership
•Stewardship

Glenn Beck - Current Events & Politics - David Walker interview about the economy

I caught only the last few minutes of this interview of David Walker this morning. David Walker, Comptroller General of the United States, earned my respect a couple of years ago when I happened to see him on C-SPAN testifying before some Congressional committee.

I don't know if he's Republican or Democrat and it doesn't matter. He speaks about the harsh fiscal realities this country faces in the next two decades brought on mostly by the out-of-control entitlement programs of Social Security and Medicare.

Take the time to read or listen to what he has to say. He talks sense from a position of long-time authority within government. (You can ignore the blather from Beck).

Unless our politicians sober up and listen to him and have the courage to act on what he recommends, they will all fall short of my reality test.

Glenn Beck - Current Events & Politics - David Walker interview about the economy

Microsoft Rolls Out Personal Health Records - New York Times

HealthVault is a Very Big Deal

This will take a little time to mature and all the privacy wonks will rant about trusting Microsoft (or any company) with important personal information, but I think momentum will build rapidly. It really is time for a rapid move to Electronic Health/Medical Records. If consumers push this option with their health care providers while Microsoft pulls the health care industry into it, we may have a very significant achievement. Meanwhile, a host of others are planning similar services. Uncharacteristically, Microsoft is first in this space. They must believe in a first mover advantage. Perhaps we are on an accelerated path where inertia will not rule.

The really big issue, though is standards. With the critical nature and broad uses of EHR, the standards issue looms very large and is not easy to resolve. Some industry and government groups are surely working on these issues, but I don't know if the process has matured. I doubt that Microsoft has a set of open standards for HealthVault.

Here's a good description of the problem from the Forbes article referenced below:

"There is no shortage of skeptics for a dozen reasons. "The concept behind it is dead on track, but it won't work very well" without a better way to integrate data from local doctors, predicts medical data guru Brent James, vice president for research at Utah's Intermountain Healthcare. The bottleneck, he says, is that there is no universal way to get blood test results, imaging scans and other basic data from thousands of local doctors and labs onto the Web.

"The intercommunications don't exist to get the data from where they now live into this central format and back out again to the physicians and nurses who would use them," James says."

In thinking about our health care conundrum (cost too high; quality not as good as it could be; private vs. public insurance; too many without coverage, etc.), I'm reminded of Milton Friedman's (a world-respected free market advocate and Nobel prize winning economist) answer to a question using health care in the U.S. as an example of the need for more market-based medicine.

Question: Is there an area here in the United States in which we have not been as aggressive as we should in promoting property rights and free markets?

Answer: Yes, in the field of medical care. We have a socialist-communist system of distributing medical care. Instead of letting people hire their own physicians and pay them, no one pays his or her own medical bills. Instead, there's a third party payment system. It is a communist system and it has a communist result. Despite this, we've had numerous miracles in medicine. From the discovery of penicillin, to new surgical techniques, to MRIs and CAT scans, the last 30 or 40 years have been a period of of miraculous change in medical science.

On the other hand, no one is happy: physicians don't like it; patients don't like it. Why? Because none of them are responsible for themselves. You no longer have a situation in which a patient chooses a physician, receives a service, gets charged, and pays for it. There is no direct relation between the patient and the physician. The physician is an employee of an insurance company or an employee of the government. Today a third party pays the bills. As a result no one who visits the doctor asks what the charge is going to be - somebody else is going to take care of that. The end result is third party payment and, worst of all, third party treatment.

Question: Following the recent expansion in prescription drug benefits and Medicare, what hope is there for a return to the free market in medical care?

Answer: It does seem that markets are on the defensive, but there is hope. The expansion of drug benefits was accompanied by the introduction of health savings accounts - HSAs. That's the one hopeful sign in the medical area, because it's a step in the direction of making people responsible for themselves and for their care. No one spends somebody else's money as carefully as he spends his own." *

HealthVault is a step in the direction of 'making people responsible for themselves.' I hope we can absorb this thinking, rather than trot down the gloomy path of 'socialized' medicine.


Update: 10/5/07

More here on HealthVault:

Microsoft: We’re good for your health by ZDNet's Mary Jo Foley -- Microsoft has been signaling its intentions to enter the health-records-management space for more than a year. On October 4, the company finally provided an official game plan of what it's readying on the health care software and services front.

Here is The Economist's take on the announcement.

Forbes has a piece on HealthVault, too.

*quote from Imprimis, a publication of Hillsdale College, July 2006 -Volume 35, Number 7

The Entitlements People - New York Times

Fiscal and Leadership Crises - Allies in "Mardi Gras" Thinking

David Brooks nails it. Newt Gingrich tries to add visibility to it with his American Solutions initiative, but current national leadership does nothing about the fiscal crisis facing this country. How long will we pretend that the train is still on the rails when the federal government spends without restraint on entitlements (even the word for this loaded with expectations that all this spending is necessary and right)?

"In the different reality, everybody plays by Mardi Gras rules. The norms are different, masks are worn and certain unpleasant facts fall away. Presidential candidates vow to offset the cost of health care plans through “cost savings” measures, and everybody pretends those savings are actually real. Republicans promise tax cuts and people pretend those pledges are not absurd. Democrats vow to pay for their grand spending plans by raising taxes on the rich, even though each one percent increase in the top tax rate only produces $6 billion in revenue. The Mardi Gras norms are built on a fiction — that the current budgetary path is sustainable — and once you enter that fiction, then all sorts of other fictions become necessary and trickery piles upon trickery until all the standards of behavior are turned upside down."

Select Hospitals Reap a Windfall Under Child Bill - New York Times

Select Hospitals Reap a Windfall Under Child Bill - New York Times

Pork is pork is pork. Nothing changes. Washington politicians do everything they can to send taxpayers' money home. Any large bill can provide cover for this age old reality in Congress. This is not a party thing, it's a normal way of political life in Washington. Perhaps it's what people expect. Certainly, Vermont's special interests expect largess for all sorts of projects from their two Senators and lone Representative in D.C.

The Democrats' public statements about transparency are true ("When Democrats took control of Congress, they promised to be more open and accountable, saying they would disclose the purpose of each earmark, the name of the lawmaker requesting it and the name and address of the intended recipient." "But Democrats said they had no list of the projects in the recently passed bill and no explicit criteria or standards for judging which hospitals should be reassigned to an area with higher Medicare payments.").

Their pork barrel politics is plain to see. I guess that's what they mean by transparency. The feeble arguments used by Democrat leaders are laughable:

"Nadeam Elshami, a spokesman for Speaker Nancy Pelosi, Democrat of California, said people should keep the big picture in mind."

“It’s easy to criticize individual provisions of large, complex bills,” Mr. Elshami said, but “the focus should be on the huge number of uninsured children who will be eligible for life-saving health care under our bill.”

"Representative Pete Stark, the California Democrat who is chairman of the subcommittee, acknowledged that “it’s hard to decipher” the cryptic language used in the bill to identify specific hospitals. “It’s always been thus,” Mr. Stark said in an interview. “I am at a loss to explain why.”

Granting relief to particular hospitals is sometimes a way for Congress to improve “the equity and fairness” of Medicare payments, Mr. Stark said. Under Medicare, he added, “you are basically setting prices, and the system is clumsy.”"