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New Krugman piece - The Medicare Miracle

TownieDeac

TownieDeac

words are futile devices
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The Medicare Miracle

So, what do you think about those Medicare numbers? What, you haven’t heard about them? Well, they haven’t been front-page news. But something remarkable has been happening on the health-spending front, and it should (but probably won’t) transform a lot of our political debate.

The story so far: We’ve all seen projections of giant federal deficits over the next few decades, and there’s a whole industry devoted to issuing dire warnings about the budget and demanding cuts in Socialsecuritymedicareandmedicaid. Policy wonks have long known, however, that there’s no such program, and that health care, rather than retirement, was driving those scary projections. Why? Because, historically, health spending has grown much faster than G.D.P., and it was assumed that this trend would continue.

But a funny thing has happened: Health spending has slowed sharply, and it’s already well below projections made just a few years ago. The falloff has been especially pronounced in Medicare, which is spending $1,000 less per beneficiary than the Congressional Budget Office projected just four years ago.

This is a really big deal, in at least three ways.

First, our supposed fiscal crisis has been postponed, perhaps indefinitely. The federal government is still running deficits, but they’re way down. True, the red ink is still likely to swell again in a few years, if only because more baby boomers will retire and start collecting benefits; but, these days, projections of federal debt as a percentage of G.D.P. show it creeping up rather than soaring. We’ll probably have to raise more revenue eventually, but the long-term fiscal gap now looks much more manageable than the deficit scolds would have you believe.

Second, the slowdown in Medicare helps refute one common explanation of the health-cost slowdown: that it’s mainly the product of a depressed economy, and that spending will surge again once the economy recovers. That could explain low private spending, but Medicare is a government program, and shouldn’t be affected by the recession. In other words, the good news on health costs is for real.

But what accounts for this good news? The third big implication of the Medicare cost miracle is that everything the usual suspects have been saying about fiscal responsibility is wrong.

For years, pundits have accused President Obama of failing to take on entitlement spending. These accusations always involved magical thinking on the politics, assuming that Mr. Obama could somehow get Republicans to negotiate in good faith if only he really wanted to. But they also implicitly dismissed as worthless all the cost-control measures included in the Affordable Care Act. Inside the Beltway, cost control apparently isn’t considered real unless it involves slashing benefits. One pundit went so far as to say, after the Obama administration rejected proposals to raise the eligibility age for Medicare, “America gets the shaft.”

It turns out, however, that raising the Medicare age would hardly save any money. Meanwhile, Medicare is spending much less than expected, and those Obamacare cost-saving measures are at least part of the story. The conventional wisdom on what is and isn’t serious is completely wrong.

While we’re on the subject of health costs, there are two other stories you should know about.

One involves the supposed savings from running Medicare through for-profit insurance companies. That’s the way the drug benefit works, and conservatives love to point out that this benefit has ended up costing much less than projected, which they claim proves that privatization is the way to go. But the budget office has a new report on this issue, and it finds that privatization had nothing to do with it. Instead, Medicare Part D is costing less than expected partly because enrollment has been low and partly because an absence of new blockbuster drugs has led to an overall slowdown in pharmaceutical spending.

The other involves the “sticker shock” that opponents of health reform have been predicting for years. Bulletin: It’s still not happening. Over all, health insurance premiums seem likely to rise only modestly next year, and they are on track to be flat or even falling in several states, including Connecticut and Arkansas.

What’s the moral here? For years, pundits and politicians have insisted that guaranteed health care is an impossible dream, even though every other advanced country has it. Covering the uninsured was supposed to be unaffordable; Medicare as we know it was supposed to be unsustainable. But it turns out that incremental steps to improve incentives and reduce costs can achieve a lot, and covering the uninsured isn’t hard at all.

When it comes to ensuring that Americans have access to health care, the message of the data is simple: Yes, we can.
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Good read. I anxiously await Fox News explaining to me how it's wrong.
 
The numbers that he uses to claim that "health spending has slowed sharply" are from 2012 looking backwards, which is all before Obamacare went into effect, so what is his point? What does that have to do with the ACA? In addition, his choice of wording is pretty dishonest, as health spending has continued to increase significantly, just at a slightly slower pace than previously (and again, before the ACA even went into effect). So we're still not actually saving any money, and in fact spending significantly more than we were before.

And again his language about Medicare spending is pretty dishonest. "The falloff has been especially pronounced in Medicare, which is spending $1,000 less per beneficiary than the Congressional Budget Office projected just four years ago." So he isn't saying that we're spending any less on Medicare, he is saying that we are spending less than the fishwrap projections that were dubious from all angles and nobody put any faith in said we should be. So the projections that everybody objected to at the time turned out in fact to be wrong and unreliable. Whoopdeedamndoo. We're still spending more than we were before with no discernable positive effects.

The article would have been much more believable had he titled it "CBO Proves Yet Again That it is Useless" as opposed to "The Medicare Miracle". But hey, the resident commie lib bit on it, so I guess it had its desired effect.
 
2&2 Slider To Leyritz said:
The numbers that he uses to claim that "health spending has slowed sharply" are from 2012 looking backwards, which is all before Obamacare went into effect, so what is his point? What does that have to do with the ACA?
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If I understand his point...that it wasn't needed. The scary predictions he speaks of were used as a justification to pass it weren't they?

Agree about the CBO....useless projections most of the time.
 
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the CBO is either a complete waste or the ultimate authority, depending on what you want from the numbers
 
So you are citing CBO data to prove that the CBO is unreliable? And you're citing an incorrect prior budget from Medicare, which all opponents repeatedly say is wholly broken, to show that Medicare got something wrong? Why is their current budget any more accurate than their incorrect prior budget? That makes no sense, and is the circle that Krugman has you confined to. So the dumbasses at Medicare and the CBO have shown yet again that they can't do anything right, nothing of which has anything at all to do with the ACA. Great. Let's ask [Redacted] how we can win more basketball games while we're at it.

As to previous cites to the CBO, the general mantra was that the CBO was at least who should be providing data supporting the ACA for Obama to push it, so if they can't even do it then nobody can. It wasn't a support of the CBO, it was an argument that everyone knows the CBO is in your pocket, but even they can't support you with a straight face.
 
So 2&2.....everyone's a dumbass...cut spending and lower taxes...free market..governmant bad..fuck yeah...?"
 
TownieDeac said:
B) Things have changed significantly since 2010, including the expiration of patents on dozens of the most highly prescribed drugs, Medicare part D enrollment is down, technical changes are working, and legislative changes that affect costs but cannot be factored into models are part of the significant change. And in fact, most of the macro models have been quite accurate on an annualized basis, and only the projections have changed.
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From the paper that is cited when you link through the link you provided:

"But the most recent slowdown in spending, which began in the mid-2000s, cannot be so readily explained by legislated changes in policy."

"We suspect that, over the decade, providers may have shifted toward methods of delivering care that resulted in slower growth in the volume, intensity, and cost of the care delivered."

Their conclusions appear to be that reductions in cost which started in the mid-2000s were not due to any sort of obvious government policy change but due to improvements within the overall healthcare system itself. That means we may have seen true cost savings, assuming that the level of healthcare didn't change (which may not be the case). That suggests that free market solutions may have actually been working which is 180° from Krugman's notion that they weren't....and it really undermines his claim that it was the ACA that reduced cost increases. They were already dropping before the recession even started and well before ACA.

http://www.nytimes.com/2013/11/29/opinion/krugman-obamacares-secret-success.html

So....if costs increases have been dropping already, why is this news? What is Krugman trying to say?
 
And just for reference, here is data from the CBO link showing the reduction.....this supposed Medicare Miracle that most attribute to something fundamental changing (my guess is rise in co-pay fees played a role)

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I've read the pasted part of Krugman's article about 3 times and I still don't know what his point his. It seems like he's making one, or that he wants to make one...but he doesn't.
 
I think there major point in the article is "things aren't as bad as Paul Ryan and Rand Paul want you to believe they are". In other words, all the doom and gloom predictions of national bankruptcy and selling Mt. Rushmore to the Chinese are overblown, and the rather dramatic slowing of health care cost increases is good evidence of this.

But Krugman gonna Krugman, so he has to try and somehow give credit for this to Obama and the ACA even though there is precious little evidence to suggest that either has any responsibility for the slowdown in cost increases. By doing so, he creates his own red herring and considerably weakens the more important point he's trying to make.
 
Deacon923 said:
I think there major point in the article is "things aren't as bad as Paul Ryan and Rand Paul want you to believe they are". In other words, all the doom and gloom predictions of national bankruptcy and selling Mt. Rushmore to the Chinese are overblown, and the rather dramatic slowing of health care cost increases is good evidence of this.

But Krugman gonna Krugman, so he has to try and somehow give credit for this to Obama and the ACA even though there is precious little evidence to suggest that either has any responsibility for the slowdown in cost increases. By doing so, he creates his own red herring and considerably weakens the more important point he's trying to make.
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Yes and no. Obviously the dramatic slowing of health care costs is a good thing. But, the flip side is that he dishonestly attempts to pin that on the ACA, which it clearly has nothing to do with, when in fact the opposite might end up being true with respect to ACA and costs. Without putting words in Ryan's and Paul's mouths, I think they would argue that the ACA may end up reversing the slowing costs and driving them back in the other direction. So the doom and gloom predictions may still be applicable, it is simply too early to tell and nobody knows yet. So this article is just a hack from about every angle.
 
TownieDeac said:
My continued point has only been that the sky was never falling.
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But again, how do you draw that conclusion from that article when (a) the data he uses is pre-ACA, and (b) the CBO projections were not taken seriously by anyone at the time of the ACA? There is nothing relevant in that article post-ACA as to whether or not the sky is falling. It may not be, it may be, I don't know, but this article adds nothing useful to that debate.
 
TownieDeac said:
Only if it's likewise hackery for Ryan and Paul to be trumpeting fear from the mountaintops, though, I guess.
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I don't follow them that closely, but I don't think their message has changed from 2010, has it? They had their reasoning why the ACA blows, and they still push that same reasoning. I don't think they have deviated from that initial projection. That is completely different from Krugman trying to dishonestly assert that some new data has arisen between the implementation of the ACA and now that indicates it actually has been a success.
 
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