Fiscal Blindness (Guest Voice)
Fiscal Blindness
by Robert A. Levine. M.D.
Washington legislators have been afflicted with a new and terrible disease, fiscal blindness, which has spread throughout the city in epidemic proportions. In addition, Senators and members of Congress are disseminating the illness around the United States when they hold meetings in their home districts. Ideologic rigidity is a predisposing factor for the disease. The symptoms include an unwillingness to face economic reality and agree to obvious measures that will put the nation back on a sound financial footing. The disease was responsible for the recent downgrade in America’s credit rating by Standard and Poors, the agency believing that the illness would prevent officeholders from enacting a satisfactory plan to bring the national debt under control.
The agreement by the House and Senate to raise the debt ceiling and cut almost a trillion dollars from discretionary spending over the next ten years did not address the major cause of the nation’s financial woes- the accelerating costs of the entitlement programs, Medicare, Medicaid and Social Security. Politicians do not want to antagonize citizens likely to utilize Social Security in the near future, nor the special interests that provide medical care under the current system. But spending on these programs must be constrained or their soaring costs will at some point bankrupt the country.
Growing Medicare and Medicaid expenditures need to be dealt with as a part of overall health care reform. Unfortunately, the Affordable Health Care Act which passed in 2010 will not do an adequate job of reducing costs. Currently, over 17% of the nation’s GDP goes for health care, $2.7 trillion annually. Government spending on Medicare in 2011 is projected to be $568 billion, with Medicaid at $428 billion, according to the Centers for Medicare and Medicaid Services. By 2020, the total cost of health care in the US is estimated to exceed $4.6 trillion, with Medicare at $922 billion and Medicaid at $908 billion.
The Congressional Budget Office three years ago reported that approximately 30% of health care expenditures were going for unnecessary care. That would be over $800 billion in 2011. Studies have also estimated that 15% to 25% of health care spending goes for administration and overhead. At 15%, that comes to about $400 billion. Thus, we have $1.2 trillion allocated for health care this year that is not being used for patient care. And as health care spending increases over the next decade, so will the amount required for administration, overhead and unnecessary care. To bring health care costs under control, it is evident what must be done. Unnecessary care, administration and overhead must be cut dramatically.
The ways Social Security could be fixed are well known to most politicians. Raising the future retirement age, increasing the amount of income subject to the Social Security tax, means testing for Social Security recipients and changing the formula for cost of living increases are all considerations. In all likelihood, a combination of some of these actions will be required for the long term stabilization of the program.
Members of the House and Senate are aware of the path that must be taken to lower the nation’s budget deficits and start attacking the national debt by modifying the entitlement programs. Fiscal blindness can be cured if ideology is put aside to get the job done. Politicians have to place the interests of the country before those of their party, crafting laws based on reality instead of distorted partisan perceptions.
A VietNam vet and a Columbia history major who became a medical doctor, Bob Levine has watched the evolution of American politics over the past 40 years with increasing alarm. He knows he’s not alone. Partisan grid-lock, massive cash contributions and even more massive expenditures on lobbyists have undermined real democracy, and there is more than just a whiff of corruption emanating from Washington. If the nation is to overcome lockstep partisanship, restore growth to the economy and bring its debt under control, Levine argues that it will require a strong centrist third party to bring about the necessary reforms. Levine’s previous book, Shock Therapy For the American Health Care System took a realist approach to health care from a physician’s informed point of view; Resurrecting Democracy takes a similar pragmatic approach, putting aside ideology and taking a hard look at facts on the ground. In his latest book, Levine shines a light that cuts through the miasma of party propaganda and reactionary thinking, and reveals a new path for American politics. This post is cross posted from his blog.
17 Responses to “Fiscal Blindness (Guest Voice)”
I’d love to see a strong centrist third party, meaning one that wasn’t infected by hyper-partisanship, but how exactly can that happen? IRV would help, but not sure how that could happen either. One thing for sure, something needs to happen if this country is going to regain it’s health, and it had better be soon.
Heal thyself Doctor.
No “modifying entitlement programs” for the poor. Because it means “cut”, NOT modify. No Raising the retirement ceiling, because people already work WAY to late in life.
Stick to sutures “doc”. Everybody knows the Tea Party nearly destroyed us with their arrogant and ignorant intransigence that most certainly DID cause the S&P down grade. Democrats had nothing to do with it. This whole debt debacle and economic down turn is wholly owned by the Republican Party and has little to do with the Democrat party or President Obama what-so-ever.
Doctors are supposed to be able to complete research. How about getting off your propaganda predisposition, in other words off you butt, and, study something relevant like ECONOMICS! At least scratch the surface please. Doubt that it will take much more.
Note to Note: I’ve watched politics for forty years also and it is people like you whom rely on their off brand training & education laurels in order to play political expert.
Yeah PHD…Pile it Higher and Deeper!
Start thinking Nationalized Medicine like the rest of the Modern World!
Anyone who denies Medicare as it is will fail (and Social Security), too, is dishonest or incompetent, and is part of the problem.*
The question is not if, but when and how to solve the problems.
We competent, dishonest, principled adults still hope to begin.
We also know that Europe’s entitlements are even more of a problem, are even more unsustainable, and that Europe faces worse demographic and economic (and political) strife, even if fools and troublemakers still say that Europe is our model.
* That’s also true in general for government spending and what is expected of government as a substitute for what’s private, including one’s own parents, family, and souls.
I liked that. Stuck it where the sticking had to go.
[cackle, cackle]
Allen, ol’ buddy, ol’ pal, I have more unpleasant facts for you. Oh, one good one: Medicare can be preserved. But it either won’t be universal, but be Medicaid for all instead. Or it will still be universal, but might be means-tested as follows: Catastrophic care only (what real insurance is about) for everyone who can make a comfortable living, and increasing provision of additional medical services for those who can’t.
Don’t forget that graph I’ve posted. You believe it’ll be at worst like the left side of the graph, (incomes increasing left to right on both sides) with the horizontal axis denoting all medical expenses and care being provided by Uncle Sam; the reality will be what’s on the right side of the graph; only the destitute or nearly-so (minimum Social Security payments, people making minimum wage or unemployed) will get something like comprehensive care; the horizontal axis will be catastrophic-only.
http://upload.wikimedia.org/wikipedia/commons/thumb/4/43/Hyperbola_one_over_x.svg/300px-Hyperbola_one_over_x.svg.png
More food for thought for the real world — think even if it hurts.
(It shouldn’t hurt after you think, if you view it, think, and learn.)
This proposal is horrible and will virtually guarantee that all seniors will be living off cat food by their mid-80′s. As it is, seniors have had no COLA for 2 years, while prices for gas, food, and health care are all going up.
Many of these proposals to “fix” these programs are dreamed up by the same MBA-earning, soulless suckwaffles who’ve gutted corporations, sent jobs overseas, and advocated producing products that are worthless crap.
Beancounters have ruined the country, no way are the going to save it.
We already have one of those, it’s called the Democratic Party. I would love to see a real left-wing party that could move the Overton Window back to the center.
All of the pros and cons cited above are meaningless until the political log jam is eliminated. The only possibility of this happening is thru a third party which is not beholden to all the special interests. A great solution might be to encourage Obama to join a third centrist party and bring his war chest with him. Another option might be to start from scratch with another great person using the Internet to spread the word and raise money for a campaign. If this is not done there is little hope for meaningful change in Congress
What we need are new viewpoints. I’ve thrown out proposals for fixing Medicare that would make it, and all other medical care more affordable. But the corporatist parties aren’t going to miff their donors.
One simple one would be for Medicare/Medicaid/SCHIP to bid out their services rather than letting the AMA, or some other politically controlled group, set the rates.
Spot on regarding unnecessary treatment and overhead. The simple fact that Medicare operates at an expense ratio less than a third of the average for-profit health insurer argues strongly for a “Medicare for everybody” single payer system. Sadly, that’s a political impossibility – fiscal blindness indeed!
ProfElwood, I don’t know how bidding out could be done without seriously restricting patients’ choice about which doctors they could choose.
Jhawk, the claims for lower Medicare/Medicaid overhead seem impressive until you consider the large degree to which these programs put their overhead “off their books” by simply using functions provided elsewhere in the government. For example, while a private insurer has to report as overhead the bill collectors that it employs, Medicare/Medicaid does not have to report as overhead the additional employees in the I.R.S. that do collections of Medicare/Medicaid taxes and fees. I don’t know that these government programs might not still be more efficient, I’m just saying that current claims exaggerate.
Don’t forget cost shifting by providers due to govt payments that are too low. Also note costs of more than one kind from low payment-related access problems, denial or reduction of care.
@Logan
The bid would simply determine the reimbursement rates. If the patient wanted to make up the difference, they could. There is no perfect method out there. Bidding out is the only that I can think of that would encourage lower costs. The methods chosen so far allow either the providers, or a political group to set the rates.
I’m moving to Belize.
Uh…..Pardonnez-moi mes amis….
Why does virtually every nation on this planet have Socialized Medicine and we do not?
Obviously Socialized Medicine works better, and, to the satisfaction of all other populations because NONE are trying to copy our Capitalist Medicine horror show.
Funny how Socialized Medicine is so much cheaper than Capitalist Medicine.
Why it would, seem by extension, that other areas of Government Socialization would be most applicable to this country as well.
Bingo…we have a launch.
Sub-Saharan African countries? Middle Eastern and North African countries? Other Asian countries, the “Stans” included? Really?
(not that that makes us peers of them, do don’t bother being illogical)
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