who's the boss? (photo: talkradionews)

John McCain has now signed on for Mitch McConnell’s debt limit plan. I don’t think there’s much doubt that the votes are there in the Senate – even over 60 if someone like Jim DeMint or Rand Paul filibusters – to pass the bill. The House is another matter, as Eric Cantor has gone rogue and is making his leadership play by creating wild demands that nobody will accept. Ultimately, the President still wants a bipartisan deal, but I still think it’s a good bet that the bomb gets defused, one way or another.


That’s a good thing, because the kinds of policies that both the Republicans and the White House are throwing out for ways to decrease health spending are really just cost shifts. The Affordable Care Act at least went after Medicare Advantage overpayments and took a chunk from provider reimbursements, not enough to change access for seniors. But this set of deals just forces states and individuals to pay more for health care.

House Majority Leader Eric Cantor (R., Va.) this week presented a list of proposed cuts to the White House as part of the broader negotiations to reach a deficit-cutting deal. The cuts include lower federal payments to hospitals with many poor patients and to state Medicaid programs, new patient copayments for clinical lab work, and reduced payments to nursing homes and rural hospitals. The cuts would come on top of about $500 billion in cuts to Medicare payments made to allow passage of the 2009 health care bill […]

“Some of these ideas have been bouncing around Washington for some time, but nothing that I see would be confused with reforming Medicare,” said Gail Wilensky, former head of Medicare under the first President Bush and now a senior fellow at the medical-education and humanitarian group Project Hope […]

Many of the latest proposal’s salient items appear to put financial pressure on others besides the federal government without actually restraining the escalating cost of medical care. For instance, up to $53 billion in savings over 10 years would come from cutting seniors’ ability to buy extra Medicare supplemental insurance, or Medigap. Seniors would simply have higher out-of-pocket medical costs, said Robert Laszewski, a Medicare consultant to insurers and medical providers.

Another idea would save $14 billion to $26 billion by having the government cut back on reimbursing unpaid debts. That would ultimately just shift the burden to hospitals, medical experts said.

The worst cost-shift is the proposal for a blended rate for Medicaid and CHIP, which means less money trickling down to the states from the federal government. They would be on their own to make up the difference, and they’d be barred from taxing providers for it. As a result, they’ll either lower reimbursement or pass the costs onto the poor people who use the services.

The overall cost of health care is the problem. That’s part a problem of provider payments, how much Americans pay for medical care compared to the rest of the world. And it’s mostly a structural problem, with profit-maximizing insurance companies unable to do the job of keeping down costs the way a single-payer system can. Unless you’re willing to deal with the structure, ultimately it will be next to impossible to find the kind of savings to equalize spending on health care in the US with the rest of the industrialized world. We’re not driving without a map, here. We know what works from the standpoint of both coverage and cost.

It’s difficult to see how these kinds of cost shifts go through right now, at least the ones that hit public hospitals. You have organizations from AARP to a business front group for the hospital industry fighting against these cuts. And you have the safety valve provided by McConnell. But it’s useful to look at these policies, because they’ll be taken off the shelf again sooner or later. And they get at the fundamental contradictions in health reforms that fails to restructure the industry-friendly setup we now see in this country.

David Dayen

David Dayen