Saturday, September 12, 2009

How To Slash Medicare Spending

It's tempting to assume Obama negotiated himself into a corner in which little actual reform was possible and is left with a modest expansion of the existing system and slowly-phased in reforms, all of which will still pass because it would be "obscene" to vote against it.

But suppose "fixing" the system was never the goal? Suppose you're Pete Peterson, and you've spent your career trying to slash America's "entitlement" programs, and you figured out a way to make drastic cuts in Medicare under the guise of "health care reform."

In that hypothetical, your major goal would be to extract hundreds of billions of dollars from the Medicare payment system, and then build in a politically shielded mechanism to extract hundreds of billions more if the initial cuts didn't sufficiently reduce Medicare's hit on the budget.

You'd have to package this carefully, because if you simply announced you wanted to slash Medicare by perhaps a trillion dollars or more over the next decade or so, you'd get slaughtered by AARP and earn the wrath of liberal Democrats and particularly seniors, the majority of whom tend to vote Democratic, or at least they used to.

So you'd talk about eliminating "waste, fraud and abuse" in the system. Few would believe there's much hope in that, so you'd add the idea of changing the provider payment incentives to get equal or better care by changing how providers practice medicine. You'd talk about "bending the cost curve" and warn folks that unless we did something dramatic, the Medicare deficits would overwhelm the federal budget and dominate the GDP.

Read it all at Firedog Lake

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