Friday, August 13, 2010

Medicare Miscounting

The August 10, 2010 Chicago Tribune summarizes the various bad accounting tricks and assumptions used to falsely bolster the fiscal health of Medicare.

Here's an excerpt from "Medicare's Rosy Health*":
For example: The report assumes that Congress will deeply slash doctors' Medicare pay. Congress has threatened to do so, but has always backed off. That's the infamous "doc fix." The doctors are due for a 23 percent pay cut in December. Congress will back down, as it always does.

Scratch about $250 billion to $300 billion in "savings" over a decade.

...Another example of the absurdity of these projections: Under an inflation formula imposed by the new law, Medicare payments would tumble below the abysmally low Medicaid payments by the end of the decade. They'd fall from nearly 80 percent of private insurance prices now to about 50 percent by 2050. That would squeeze many doctors, hospitals, surgical centers and other providers into oblivion.

Long before that happens, hospitals and other facilities will stop treating Medicare patients and raise costs for private patients...
(Read the full text of "Medicare's Rosy Health*".)

Sooner or later, reality will always catch up with bad accounting. The only question is when.