Friday, May 13, 2011

Trustees Report

The Medicare Trustees Report was issued today. The most obvious observation is that it is clear that it has been written by politicians who seem to have had no business experience. It seems to me to be a political document and not an independent evaluation. But what would one expect.

For example they state:

...the projected total expenditures for the Medicare program are considered, along with the primary sources of financing. Figure II.D1 shows projected costs as a percentage of GDP. Medicare expenditures represented 3.6 percent of GDP in 2010. Under current law, costs would increase to about 5.6 percent of GDP by 2035 under the intermediate assumptions and to 6.2 percent of GDP by the end of the 75-year period. However, it is important to note that Medicare expenditures are almost certainly understated because of unrealistic substantial reductions in physician payments scheduled under current law and may be further understated (and to a greater degree) if the statutory reductions in payment updates to other categories of providers cannot be adhered to for all future years. The Introduction to this report describes this concern in greater detail. If the physician payment reductions are overridden and the other update constraints are phased out, then Medicare expenditures would reach an estimated 10.7 percent of GDP in 2085.

Now to be able to project out to 2085 is really "shingling the roof in the fog". There is no clear vision on what will be happening in medicine, other than more of the same. What would it be like if in 1911 I predicted out to 1985 using the fixed assumptions of medical practice circa 1911! I looked at an old, very old, Osler of the period. Lots of folks would die.

Medicare needs change, and the change is simple and direct. It should not be abandoned as per Ryan, that was frankly just dumb, but at least he threw a chip on the table. This report depicts what ills are in the system, the political system.