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Medicare for All – A Cautionary Tale

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by

sherlockj
in ,

The Business of Healthcare

by James C. Sherlock

For those of you who think “Medicare for All” would be a good thing, I offer a cautionary tale from Becker’s Hospital CFO Report titled Hospitals barred from suing over $840M pay cut.

A group of more than 680 hospitals can’t revive a lawsuit saying they lost $840 million in payments because of adjustments made by federal regulators to make up for a Medicare shortfall, according to Bloomberg Law.

On Feb. 9, the U.S. Court of Appeals for the District of Columbia held that federal law bars the hospitals’ lawsuit. At issue was whether HHS unlawfully extended a program to make up an $11 billion Medicare shortfall.

Medicare was facing an $11 billion shortfall in 2013, and Congress gave HHS a mission to recoup the funds by the end of fiscal year 2017. To recoup the payments, HHS said it would gradually reduce the base rate paid for inpatient care. Though hospitals initially expected to face a net reduction of 3.2 percent in 2017, HHS announced a 3.9 percent reduction — 0.7 percent more than planned — after reviewing the 2017 budget.

HHS allowed the 0.7 percent reduction in Medicare reimbursement to continue into fiscal year 2018. By carrying over the cut into 2018, HHS exceeded its statutory authority and cost hospitals $840 million in lost payments, the hospitals argued.

The district court dismissed the case for a lack of jurisdiction, and the hospitals filed an appeal.

The appellate court held Feb. 9 that a section of the TMA, Abstinence Education, and QI Programs Extension Act expressly prohibits judicial review of adjustments to Medicare pay to hospitals.

“We do not doubt that the hospitals felt a ‘significant financial impact’ from the -0.7% adjustment,” the appellate court said. “But such matters are not ours to resolve. Instead our limited role is to read and apply the law th[at] policymakers have ordained, and here our task is clear.”

My experience with hospitals in Virginia suggests that many have by their actions richly earned Medicare for All. But enacting that as public policy has its issues, not the least of which is the restricted elasticity of the public purse.

If the Left plans no restrictions on the total costs of their ideal healthcare program, they should say so. If they know of any government that does not have budgetary limits on its “free” healthcare system, they should point it out.

So, two straightforward questions for the left:

  • Is there to be a limitless budget for Medicare for All?
  • If not, who will determine who misses the cut?

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52 responses to “Medicare for All – A Cautionary Tale”

  1. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I am not going to take the bait and jump down this rabbit hole, because I do not have enough expertise to negotiate the fall. I do, however, want to point out that this post seems to assume that the current system, i.e. not Medicare for all, has a limitless budget. It does not have such a budget and there are gatekeepers that determine who misses the cut. Those gatekeepers are called insurance companies. For paying for medical costs, it is a matter of picking your poison.

    1. sherlockj Avatar
      sherlockj

      You either misread what I said or I did not clearly state it. I agree that legacy Medicare has a budget. I am posing that as a cautionary tale for those who propose Medicare for All as a panacea.

  2. Acbar Avatar
    Acbar

    JS, a couple of things you say are shorthand for a long discussion. First, you say: “I [you] agree that legacy Medicare has a budget. I am posing that as a cautionary tale for those who propose Medicare for All as a panacea.” We agree completely that Medicare pricing needs radical reform. When someone says “Medicare for all” I hope to hell they don’t expect to simply add more people under that abysmal system. BUT: if they really mean “universal health care with a government-run option” I have a different analysis. The shame of our present system is that it is terribly inefficient and expensive, certainly as compared with other comparable nations, yet we have too many people with no access to health care through it; their only recourse is through public health clinics or emergency rooms. My objection to “Medicare for All” is to the Medicare part, not the All part.

    Second: you say, “Federal contributions are not capped, however, to Medicaid in the 50 states and D.C. because they set payments, not the federal government. Medicaid would disappear under single payer, though single payer may require state contributions.” This underscores the Byzantine and needlessly-complex federal payment and provider-compensation scheme that is Medicare/Medicaid today. And yes, the States do fix Medicaid compensation according to different standards further complicating the resulting patchwork. And that doesn’t even get into the question of of our moribund State-run public health networks, plus the federal FDA and CDC, which in some form pre-existed the 1960s federal initiatives. Plainly the events of the past year have demonstrated the need for a revival of our public health system and for better integration with Medicare/Medicaid (or whatever we end up calling it).

    1. sherlockj Avatar
      sherlockj

      The complexities of shifting from the current system to single payer evade even summarization, much less detailed analysis. “Government option” is shorthand for single payer. Those in the political class have admitted that.

      Single payer, because of the regulations that will flow, is shorthand for government health system. The politicians won’t admit that, because no one will force them to respond to the question.

      It is absolutely OK to be for any of that, but the costs of all sorts of the transition to and operation of such a system defy assessment not only here, but in government studies. Congress will “have to pass the bill to see what is in it”. As will we all.

  3. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I am not going to take the bait and jump down this rabbit hole, because I do not have enough expertise to negotiate the fall. I do, however, want to point out that this post seems to assume that the current system, i.e. not Medicare for all, has a limitless budget. It does not have such a budget and there are gatekeepers that determine who misses the cut. Those gatekeepers are called insurance companies. For paying for medical costs, it is a matter of picking your poison.

    1. sherlockj Avatar
      sherlockj

      You either misread what I said or I did not clearly state it. I agree that legacy Medicare has a budget. I am posing that as a cautionary tale for those who propose Medicare for All as a panacea.

    2. sherlockj Avatar
      sherlockj

      Federal contributions are not capped, however, to Medicaid in the 50 states and D.C. because they set payments, not the federal government. Medicaid would disappear under single payer, though single payer may require state contributions

  4. Nancy_Naive Avatar
    Nancy_Naive

    I gotta figure at the worst, we could all just use the military medical system. Just nationalize and turn it all over to the DoD.

    Maybe we could start with an increase in the minimum wage.

    1. TooManyTaxes Avatar
      TooManyTaxes

      I don’t have Medicare Part B even though my wife and I are both over 65. It’s a better deal financially to stay under the federal employees health system and pay its premiums than to go to Part B and pay its premiums. There a millions of other people 65 and older who don’t chose Medicare Part B. Why should we be forced to move to a lower-quality, higher cost health care system just to please some ideologues?

      The CBO just found that a phase-in of a$15 minimum wage would cost 1.4 million people their jobs. How is that a good plan?

      1. Nancy_Naive Avatar
        Nancy_Naive

        All things are relative. But in 1966 a, oh say, UVa graduate might have fulfilled an NROTC obligation and as a newly frocked ENSIGN would have been paid $321/month.

        At that same time, the lowest paid employee at the MacDAC plant assembling the A6 or F4 the ENSIGN would fly in Vietnam would have received the Federal minimum wage of $1.15/hour.

        Today, that ENSIGN would receive $3,280/month. That aircraft worker gets $7.35/hour. That’s a factor of 10, and a factor of 6.39.

        Go figure.

        1. Matt Adams Avatar
          Matt Adams

          “Today, that ENSIGN would receive $3,280/month. That aircraft worker gets $7.35/hour. That’s a factor of 10, and a factor of 6.39.”

          Military members don’t work straight 8’s you can’t make those comparisons. They also don’t just work 5 days a week.

          You’re also comparing someone who is required to hold a college degree with someone who isn’t.

          1. sherlockj Avatar
            sherlockj

            Other than that and the danger thing Nancy was right on point.

          2. Matt Adams Avatar
            Matt Adams

            How was he on point, he was comparing someone working at a minimum wage job (typically zero skills) with someone who had a college degree.

            Furthermore, MacDonald Douglas closed shop in 1997. There is also the uncomfortable fact that most jobs at NG and B are unionized, so they aren’t making mim wage. They are most likely marking more than the Ensign.

          3. sherlockj Avatar
            sherlockj

            I was just kidding.

          4. Matt Adams Avatar
            Matt Adams

            “sherlockj | February 11, 2021 at 12:24 pm |
            I was just kidding.”

            I must apologize for not seeing the sarcasm, mea culpa.

          5. Nancy_Naive Avatar
            Nancy_Naive

            Pick another GS then. Pay rates are online from past years.

            And for the danger thing, death rates in the defense industries during WWII were pretty damned high.

          6. sherlockj Avatar
            sherlockj

            WWII?

          7. Matt Adams Avatar
            Matt Adams

            “Nancy_Naive | February 11, 2021 at 1:23 pm |
            Pick another GS then. Pay rates are online from past years.

            And for the danger thing, death rates in the defense industries during WWII were pretty damned high.”

            I too don’t see how you’ve now switched from Vietnam era to WWII.

            General Schedule Rates wouldn’t apply, if you want to compare someone of equal footing it would be an E-2 to someone making minimum wage. Which is still a stretch because the E-2 has at least been MOS’qed.

          8. Nancy_Naive Avatar
            Nancy_Naive

            Well, wars are dangerous, no?

            And, it’s handy. More research already done.
            https://ehistory.osu.edu/exhibitions/machinery/index

          9. Nancy_Naive Avatar
            Nancy_Naive

            Of course, you are correct about comparing more closely to minimum wage. For example, a Senator’s pay has gone up by only 5.8 which is less than the minimum wage factor… could explain a lot too.

          10. Matt Adams Avatar
            Matt Adams

            “Nancy_Naive | February 11, 2021 at 1:48 pm |
            Of course, you are correct about comparing more closely to minimum wage. For example, a Senator’s pay has gone up by only 5.8 which is less than the minimum wage factor… could explain a lot too.”

            Senator’s are overpaid but they set their own pay. You don’t like how much they make call your Senator. While they are unqualified, you’ll find most of them have post graduate degrees.

          11. Nancy_Naive Avatar
            Nancy_Naive

            But would we get quality if the factor from 1966 to now had been 10 or even 20 instead of 5.8?

          12. Matt Adams Avatar
            Matt Adams

            “Nancy_Naive | February 11, 2021 at 2:09 pm |
            But would we get quality if the factor from 1966 to now had been 10 or even 20 instead of 5.8”

            Your quality of Senator has decreased conversely with the benefits provided to them and with the invocation of the 17th Amendment.

            The Government and military don’t compensate for quality, the following the Peter Principle.

    2. Matt Adams Avatar
      Matt Adams

      “Nancy_Naive | February 10, 2021 at 3:11 pm | Reply
      I gotta figure at the worst, we could all just use the military medical system. Just nationalize and turn it all over to the DoD.

      Maybe we could start with an increase in the minimum wage.”

      TriCare is awful, if you want to educate people on how terrible the Government manages things, sure go ahead and let them have it.

      The only medicine you’re going to get is vitamin M, flexeril and water. That’s regardless of the issue, hence why there is still a cyst in my knee and the course of treatment was don’t run more than 2 miles at a time.

      1. sherlockj Avatar
        sherlockj

        TriCare management is also fully contracted out. The military doesn’t have anything to do with it except writing the checks.

        1. Matt Adams Avatar
          Matt Adams

          Well I think you and I both know how “wonderful” Military/Government contracts can be for anyone but the contractor.

          “TriCare management” is also not the application, the application of that medicine is a mixture of DOD contractors and military members.

          1. idiocracy Avatar
            idiocracy

            How about the contractor employees?

            All the bureaucracy and bull**** of working for the government, with none of the benefits or job security.

          2. Matt Adams Avatar
            Matt Adams

            “idiocracy | February 11, 2021 at 1:12 pm |
            How about the contractor employees?

            All the bureaucracy and bull**** of working for the government, with none of the benefits or job security.”

            Government contracting is a cake job, they get nice bennies.

          3. idiocracy Avatar
            idiocracy

            Hah. Last Federal contractor I worked for that offered a pension (and decent raises, not 1% per year) was EDS and it’s been years since they’ve been gone. (HP bought them out and screwed everything up complete with benefits taken away and across-the-board pay cuts).

          4. Matt Adams Avatar
            Matt Adams

            “Hah. Last Federal contractor I worked for that offered a pension (and decent raises, not 1% per year) was EDS and it’s been years since they’ve been gone. (HP bought them out and screwed everything up complete with benefits taken away and across-the-board pay cuts).”

            Booze and others pay very well and provide excellent benefits.

          5. idiocracy Avatar
            idiocracy

            The 6% 401k match that BAH offers is pretty standard in the corporate word. No pension, also pretty standard in the corporate world.

          6. Nancy_Naive Avatar
            Nancy_Naive

            “Government contracting is a cake job, they get nice bennies.”

            OTOH, I did work a contract where one day the FSO passed out stickers to tape over the name of our company on our badges with the new company’s name.

          7. Matt Adams Avatar
            Matt Adams

            “idiocracy | February 11, 2021 at 2:43 pm |
            The 6% 401k match that BAH offers is pretty standard in the corporate word. No pension, also pretty standard in the corporate world.”

            You’re going to be hard pressed to find a “pension” that lives up to what they used to in this climate. There are other benefits offered which keep pace with todays standards. PWC provides maternity and paternity leave to the tunes of 12 weeks for each individual.

          8. Matt Adams Avatar
            Matt Adams

            “Nancy_Naive | February 11, 2021 at 2:52 pm |
            “Government contracting is a cake job, they get nice bennies.”

            OTOH, I did work a contract where one day the FSO passed out stickers to tape over the name of our company on our badges with the new company’s name.”

            Did your pay or benefits change? I know most contractors don’t want to hear this, but a vast majority don’t have to deliverer anything and get paid very well for it.

  5. Nancy_Naive Avatar
    Nancy_Naive

    I gotta figure at the worst, we could all just use the military medical system. Just nationalize and turn it all over to the DoD.

    Maybe we could start with an increase in the minimum wage.

    1. TooManyTaxes Avatar
      TooManyTaxes

      I don’t have Medicare Part B even though my wife and I are both over 65. It’s a better deal financially to stay under the federal employees health system and pay its premiums than to go to Part B and pay its premiums. There a millions of other people 65 and older who don’t chose Medicare Part B. Why should we be forced to move to a lower-quality, higher cost health care system just to please some ideologues?

      The CBO just found that a phase-in of a$15 minimum wage would cost 1.4 million people their jobs. How is that a good plan?

      1. Nancy_Naive Avatar
        Nancy_Naive

        All things are relative. But in 1966 a, oh say, UVa graduate might have fulfilled an NROTC obligation and as a newly frocked ENSIGN would have been paid $321/month.

        At that same time, the lowest paid employee at the MacDAC plant assembling the A6 or F4 the ENSIGN would fly in Vietnam would have received the Federal minimum wage of $1.15/hour.

        Today, that ENSIGN would receive $3,280/month. That aircraft worker gets $7.35/hour. That’s a factor of 10, and a factor of 6.39.

        Go figure.

    2. Matt Adams Avatar
      Matt Adams

      “Nancy_Naive | February 10, 2021 at 3:11 pm | Reply
      I gotta figure at the worst, we could all just use the military medical system. Just nationalize and turn it all over to the DoD.

      Maybe we could start with an increase in the minimum wage.”

      TriCare is awful, if you want to educate people on how terrible the Government manages things, sure go ahead and let them have it.

      The only medicine you’re going to get is vitamin M, flexeril and water. That’s regardless of the issue, hence why there is still a cyst in my knee and the course of treatment was don’t run more than 2 miles at a time.

  6. Nancy_Naive Avatar
    Nancy_Naive

    We could (italicized) do this…
    https://www.swisslife.com/en/home/media/media-releases/news-archiv/the_swiss_healthcare.html

    1. WayneS Avatar
      WayneS

      “At the same time, all residents are obliged to take out basic health insurance, (for newcomers, within three months of taking up residence or being born)”

      Question: How many babies do they arrest each year for failing to take out basic health insurance within three months of being born?

      🙂

      1. Nancy_Naive Avatar
        Nancy_Naive

        They deport them.

        1. WayneS Avatar
          WayneS

          Right. Much more efficient. Leave it to the Swiss…

    2. sherlockj Avatar
      sherlockj

      Discounting the size and homogeneity of the Swiss population and size of the country, you might have something.

  7. Nancy_Naive Avatar
    Nancy_Naive

    We could (italicized) do this…
    https://www.swisslife.com/en/home/media/media-releases/news-archiv/the_swiss_healthcare.html

  8. Acbar Avatar
    Acbar

    JS, a couple of things you say are shorthand for a long discussion. First, you say: “I [you] agree that legacy Medicare has a budget. I am posing that as a cautionary tale for those who propose Medicare for All as a panacea.” We agree completely that Medicare pricing needs radical reform. When someone says “Medicare for all” I hope to hell they don’t expect to simply add more people under that abysmal system. BUT: if they really mean “universal health care with a government-run option” I have a different analysis. The shame of our present system is that it is terribly inefficient and expensive, certainly as compared with other comparable nations, yet we have too many people with no access to health care through it; their only recourse is through public health clinics or emergency rooms. My objection to “Medicare for All” is to the Medicare part, not the All part.

    Second: you say, “Federal contributions are not capped, however, to Medicaid in the 50 states and D.C. because they set payments, not the federal government. Medicaid would disappear under single payer, though single payer may require state contributions.” This underscores the Byzantine and needlessly-complex federal payment and provider-compensation scheme that is Medicare/Medicaid today. And yes, the States do fix Medicaid compensation according to different standards further complicating the resulting patchwork. And that doesn’t even get into the question of of our moribund State-run public health networks, plus the federal FDA and CDC, which in some form pre-existed the 1960s federal initiatives. Plainly the events of the past year have demonstrated the need for a revival of our public health system and for better integration with Medicare/Medicaid (or whatever we end up calling it).

    1. sherlockj Avatar
      sherlockj

      The complexities of shifting from the current system to single payer evade even summarization, much less detailed analysis. “Government option” is shorthand for single payer. Those in the political class have admitted that.

      Single payer, because of the regulations that will flow, is shorthand for government health system. The politicians won’t admit that, because no one will force them to respond to the question.

      It is absolutely OK to be for any of that, but the costs of all sorts of the transition to and operation of such a system defy assessment not only here, but in government studies. Congress will “have to pass the bill to see what is in it”. As will we all.

  9. Peter Galuszka Avatar
    Peter Galuszka

    A personal note. After my Dad died I had to move my Mom to Virginia because she had dementia. She lived six more years. Tricare really made a difference.

  10. Peter Galuszka Avatar
    Peter Galuszka

    Matt. Thanks. I did have to monitor things

  11. Peter Galuszka Avatar
    Peter Galuszka

    A personal note. After my Dad died I had to move my Mom to Virginia because she had dementia. She lived six more years. Tricare really made a difference.

    1. Matt Adams Avatar
      Matt Adams

      I’m glad to hear that they did right by you and your family Peter, they’ve done wrong by lots of service members.

  12. Peter Galuszka Avatar
    Peter Galuszka

    Matt. Thanks. I did have to monitor things

    1. Matt Adams Avatar
      Matt Adams

      They can be very unresponsive, I recall having to constantly follow up for an MRI that took several months to get done.

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