Jeff G So realistically, the unchecked growth in entitlement spending is CAUSING AUSTERITY on the remainder of government, which is already shrinking in response to the crowd-out caused by Medicare and interest payments. So by "protecting" entitlements, Dems are guaranteeing that the remainder of govt will continue to be eviscerated as interest payments and entitlement growth make it prohibitive to fund the operations of govt (see CNN link above). If you read the LibT talking points closely, you'll see that they're actually counting on it.
Jeff G The reality is, the rapid *growth* of entitlement spending, just because it comes out of govt, doesn't mean it's stimulating the economy, or helping lower income people. In fact the rapid growth in healthcare spending is not even providing the same marginal/commensurate benefits to seniors. There was a time when progressives cared that the U.S. has the most expensive and inefficient healthcare system in the world, in addition to lacking universal coverage. The amount of waste in healthcare has not gone away and is only growing. As it turns out, all those issuing clarion calls to "protect" Medicare are essentially unwitting dupes of the medical industry complex, which absorbs most of this so-called "stimulus" (certainly they're very grateful). http://www.washingtonpost.com/opinions/matt-miller-the-real-medicare-villain/2012/08/24/bb18f572-ede8-11e1-b0eb-dac6b50187ad_story.html http://money.cnn.com/2011/01/21/news/economy/spending_taxes_debt/index.htm
Jeff G "the emphasis on major cuts to entitlements now demanded by Republicans continues despite a preponderance of evidence that austerity has worsened the recession." It's become clear that the LibT's now far outnumber any centrist perspectives, whether GOP or Dem, in most of the threads below and on PM in general. However, in seeing Dems debate "austerity" against the libertarian perspective which seeks to eradicate most (or all) of govt, there's an important point that gets lost in the mix. Especially as one who is involved in the day-to-day operations of govt, I think the quote above needs important response that needs to be transmitted to the Dems, and that is: Stop. Stop trying to "help" by "protecting" spending on entitlements, which supposedly "stimulate" the economy... you're only shooting yourself in the foot. The fact is, whatever portion of the federal budget that may actually stimulate or invest in economic growth is being crushed by the rampant growth of entitlements.
Jeff G John, I agree with that sentiment - that govt has "screwed up" and needs to reign in spending growth while taking in higher revenues until the mess is mopped up. As one who's working in govt, it's also reasonable to accept hiring/pay freezes during that time - however it's worth pointing out that federal workforce is not a driver of increases in spending, at least not on the non-military/discretionary side. It's reasonable as a matter of principle (e.g. 'shared sacrifice'), less in terms of financial math. But the quick win for everyone should be to agree to entitlement reform such that govt spending does not grow faster than GDP growth as it does currently - ideally it's more in line with inflation. This doesn't require libertarians, republicans or dems to agree on the total size of govt, just on its rate of growth.
Jeff G This is why the innovation in healthcare practice must be matched by a high level of research on the relative effectiveness of new and novel healthcare procedures. Insofar as third party payers -- Medicare and private insurers -- are going to be engaged in establishing the parameters that define value in healthcare and using this information to inform purchasing decisions, there needs to be a larger role for comparative effectiveness research. This is akin to a Consumer Reports function for the healthcare industry, coupled with a Kelly Blue Book -like entity. So this is the other piece of the puzzle in addition to HSAs... which I also described in my slide deck.
Jeff G John, I'm not sure I understand as you describe it "account pooling" or the involvement of banks. Health insurance, in particular is a very distinct product that banks don't have the inclination or capacity to provide -- more risk pooling than account pooling (this implies the insurer takes on a certain level of risk that it agrees to manage, in return for the right to take a profit -- a different business model than what I can infer from "account" pooling). "Each bank would set a limit which would trigger oversight to make sure that the costs are valid, that they are treated effectively." This is a service that those "highly paid" insurance agents are equipped to provide. The practice of healthcare is replete with a tremendous amount of innovation, research, clinical guidelines, and overall rapid change. Nothing is static in terms of what gets deemed "effective" or "valid."
Jeff G John, "obamacare" also mandates posting of prices by hospitals (presumably one of the provisions that would have been retained had the law been scuttled...). Btw HSAs coupled with high-deductible plans have gained market share rapidly over the past 2-3 years. As I mentioned, for older/sicker populations, they're not as much a magic bullet; as sicker consumers hit their deductibles they are still going to be engaging with third party payers, whether public or private. So the insurance industry will more closely resemble insurance (i.e. covering catastrophic costs), but that's not the same thing as saying it'll go away.
Jeff G John, I do -- I support the use of HSAs in general, in particular as a paradigm shift for most people in the healthcare market. My slides call them out, and as I mentioned I agree with much of what your article proposed. However my slides also point out reasons why the healthcare market isn't currently primed to support people using HSAs coupled with high-deductible plans, largely due to lack of price transparency (see the articles I link from my slides from the Economist, NY Times, LA Times etc.). Another issue is that HSAs aren't necessarily the most feasible model for the Medicare population: I've seen research suggesting that HSAs won't achieve as much cost savings for the elderly, who tend to be sicker and more regular users of healthcare. So overall they're an important piece of the puzzle, more conducive policies are needed to help them grow, but they won't slay the whole dragon of medical cost inflation.
Jeff G However if you assumed my article was some rant about not cutting due to it being "mandatory" spending you've definitely mis-characterized it and probably haven't read it. I'm in favor of halting medical cost inflation in its place. Some interpret that as being in favor of "cutting" -- so be it. Though I've done my best to explain why that's not the case. http://www.policymic.com/articles/5945/30-slides-that-get-you-up-to-speed-on-u-s-health-care-policy
Jeff G In addition, it's also true what you said that conceptually, if the incentives in how Medicare purchases healthcare are adjusted properly, it's implicitly possible that we could "freeze" entitlement spending -- loosely speaking. At minimum, the growth in per capita costs should be arrested, however the aging of the baby boomer population will still drive total spending gradually higher -- just not as rapidly higher as wasteful medical cost inflation. I think the issue Jeanne was alluding to is the over-valuing of technology by Medicare, and consequently its over-payment on price.
Jeff G Wow, this thread's been going on a while! John, to clear things up, in my article I was trying to be as analytically precise as possible about drivers of *growth* in costs. Reason being, there is a lot of conventional wisdom around why HC costs are high, some true - however I was specifically trying to carve out a distinct question -- not, "Why are costs high?" but "Why are costs still growing?" I think analytically these are separate issues with different drivers. Many of the reasons you've listed are true about why costs are high, but I found it even more important to answer the question, why are per capita costs still growing? The answer entails taking a look at the incentives in the system between technology/pharma producers, hospitals, and providers. Incidentally, I agree with your insinuation far above that we shouldn't even have a category of spending called "mandatory." Every dollar of our budget should be discretionary, justified, and budgeted accordingly, including HC.
Jeff G James, it still seems you're discounting a whole field of study of which you haven't thoroughly assessed. But on a more practical level, if economics is mere voodoo, then you may unwittingly hand even more fodder to hard-core libertarians wanting to eviscerate the role of govt, given that pretty much any/every agency of government relies on legions of economists to model and inform just about any decision they make. And while the austrian-backed variety of arm-chair economists are far over-represented in online blogs like PM, fact is that major policy initiatives have been premised on mainstream economic theory (e.g. Keynesian) over most of the past century (think New Deal, etc.). So if it's mere hocus pocus then it's definitely time for the advocates of more govt/stimulus spending to pack it in and go home.
Jeff G If economics is fake or superficial, then so is the practice of psychology, demography, or many other -aphies or -ologies in the social science field. As I said, constructs have to be defended and operationalized by quantifiable variables, since measuring certain concepts isn't as amenable to measurement via meter stick, voltometers, pH meters, etc. It's worthwhile to rethink that perception of disregard of social science methods. http://www.socialresearchmethods.net/kb/measure.php http://www.socialresearchmethods.net/kb/constval.php
Jeff G As per my last comment, I definitely disagree with your assertion that economics is superficial. Social science overall tends to be a little "squishier" and constructs of measure are harder to defend -- i.e. "utility" or "happiness" (discussions of different types of "validity" in social science research crop up for this reason) This applies equally to demography, psychology, as well as econ and other social sciences. But the methods are highly similar and I had no problem making the switch from "hard" science to social science.
Jeff G I transitioned from science during undergrad (bio) to social science (econ-ish) in grad. The scientific method, econometrics, etc. all applies in much the same fashion, so there wasn't any sort of conflict between the two methodologies for me. You still need theories to explain facts and predict behaviors, test hypothesis -- both of these fields do that. And, no brainer here -- politics/ideology often taints the practice of science as well as economics. But no need to assign guilt by association with the curmudgeons who seek to manipulate either one.
Jeff G James apparently you believe the field of econ has some kind of anti-liberal bent, but nothing could be further from the truth (though it may have a moderating effect on very far-left beliefs). The attitude of unwillingness to examine fields of study (while passing judgment or professing knowledge of it anyways) comes of as being anti-learning or anti-elitist -- similar to a certain prior President who didn't believe in reading newspapers. It's a dangerous approach, much as the anti-elitism of the tea party, or the anti-science crowd who doubt the "findings" of the IPCC or believe that vaccines cause autism.
Jeff G Fascinating. Apparently the author you cited as aligned himself with Thabo Mbeki on the "real" causes of AIDS. A history prof who's clearly qualified to speak on clinical issues. http://www.immunity.org.uk/images/Geshekter_UNC_Globalization%20Paper%20(2).pdf It's a good thing that people holding these ideas have pretty much been laughed out of the room when it comes to actual policy development on AIDS. I also assume they're getting pretty accustomed to being ignored, so it saves us all some effort.
Jeff G Grant. In some countries, the trick is not to be born a female. But of course, there's always the hope that education will help... maybe you should look around outside our own borders for once. http://www.who.int/gender/hiv_aids/en/
Jeff G Matthew, thanks for Reason #2 - this is the one that rings true most of all. If it really is true that Norquist's stranglehold over the GOP is coming to and end, the next big concern is, are Democrats really ready to come off the fence and do something about entitlements? This question hasn't been addressed very widely and it seems they've become rather comfortable up on their perch as the "defenders" of Medicare ever since the demise of the debt ceiling talks. Yet Medicare is helping to perpetuate the most inefficient and expensive healthcare systems in the world, while buying us no better health. Agreed to your point that reform must be done in a way that "guarantee[s] that the most vulnerable Americans aren't harmed in the process." I've outlined possible ways to do this with Medicare in my recent article. It's time to give Dems a hearty shove back to the negotiating table. http://www.policymic.com/articles/5945/30-slides-that-get-you-up-to-speed-on-u-s-health-care-policy
Jeff G I'm not sure you're really following. Medicare is "taken advantage of" because by its own rule-making it pays top dollar for high-priced new technologies and interventions of unproven value - it is formally not allowed to consider cost. Bottom line, the program needs reform but the very "guardians" of Medicare are those who consider any reform as some attempt to cut benefits when in fact the program overpays by egregious amounts. So which is it? Creating oversight, removing cronyism, abuse, and political favoritism, or protecting Medicare from "cuts"? As Matt Miller in the article cited above states: "Rightly understood, health-care entitlement reform is not, as conservatives suggest, a matter of lessening the dependency of big chunks of the population on government largesse. It’s about weaning the members of our medical-industrial complex from their entitlement to far higher payments, despite shabby results, than their counterparts abroad get."
Jeff G Incidentally I had the chance to see Hillary speak in person today... very smart, polished, intelligent, and down to earth. the world is pretty much her oyster. (I was tempted to ask, "see you in 2016?" but didn't...)
Jeff G Medicare may be more efficient administratively than private sector, but only administratively. In fact Medicare payment policy is a main driver of medical cost inflation, a point entirely missed by pundits on either the left or the right but well known among people who actually study policy (as I've outlined below). Unfortunately cries to "protect Medicare" from "cuts" only makes the left into unwitting guarantors of high profits for the medical industry (not insurers) but no commensurate improvement in health outcomes. It turns out Sarah Palin's "death panel" quip the single most effective PR campaign that device manufacturers and pharmaceutical companies could have possibly designed, and it registered most deeply into the psyche of the left. http://www.policymic.com/articles/5945/30-slides-that-get-you-up-to-speed-on-u-s-health-care-policy http://www.washingtonpost.com/opinions/matt-miller-the-real-medicare-villain/2012/08/24/bb18f572-ede8-11e1-b0eb-dac6b50187ad_story.html
Jeff G James, not all federal spending is created equal nor is equally stimulative of an equal rate of return. Further, growth rates of federal spending due to entitlements continues to outpace GDP growth and thus revenue. For this reason, resistance by the far-left to reforming entitlements will be its own undoing, depriving the govt of resources needed to meet the investment needs of the future. And the US' mammoth-sized spending on healthcare still makes it the most grossly expensive and inefficient system in the world. Excessive per-capita spending on healthcare is no less responsible in forcing austerity onto the populace than the most recalcitrant of the far right. http://money.cnn.com/2011/01/21/news/economy/spending_taxes_debt/index.htm