On Oct. 1, 2012 the Obama administration started awarding bonus points to hospitals that spend the least on elderly patients. It will result in fewer knee replacements, hip replacements, angioplasty, bypass surgery, and cataract operations.
These are the five procedures that have transformed aging for older Americans. They used to languish in wheelchairs and nursing homes due to arthritis, cataracts, and heart disease. Now they lead active lives.
But the Obama administration is undoing that progress. By cutting $716 billion from future Medicare funding over the next decade and rewarding the hospitals that spend the least on seniors, the Obama health law will make these procedures hard to get and less safe.
The Obama health law creates two new entitlements for people under age 65 – subsidies to buy private health plans and a vast expansion of Medicaid. More than half the cost of these entitlements is paid for by cutting what hospitals, doctors, hospice care, home care, and Advantage plans are paid to care for seniors.
Just Take Pill
Astoundingly, doctors will be paid less to treat a senior than to treat someone on Medicaid, and only about one-third of what a doctor will be paid to treat a patient with private insurance.
On July 13, 2011, Richard Foster, chief actuary for Medicare, warned Congress that seniors will have difficulty finding doctors and hospitals to accept Medicare. Doctors who do continue to take it will not want to spend time doing procedures such as knee replacements when the pay is so low. Yet the law bars them from providing care their patients need for an extra fee. You’re trapped.
President Obama seems to think that too many seniors are getting these procedures. At a town hall debate in 2009, he told a woman “maybe you’re better off not having the surgery but taking the painkiller.”
Science proves that the president is wrong. Knee replacements, for example, not only relieve pain but also save lives. Seniors with severe osteoarthritis who opt for knee replacement are less apt to succumb to heart failure and have a 50% higher chance of being alive five years later than arthritic seniors who don’t undergo the procedure, according to peer-reviewed scientific research.
Yet Foster warned Congress that 15% of hospitals may stop treating seniors once the Obama-Care cuts go into effect. The rest will have to lower the standard of care. Hospitals will have $247 billion less over the next decade to care for the same number of seniors as if the health law had not been enacted.
Obama claims his Medicare cuts will knock out waste and excessive profits. Untrue. Medicare already pays hospitals less than the actual cost of caring for a senior, on average 91 cents for every dollar of care. No profit there. Pushing down rates will force hospitals to spread nursing staff thinner.
Elderly patients will have a worse chance of surviving their stay and going home. When Medicare reduced payment rates to hospitals as part of the Balanced Budget Act of 1997, hospitals incurring the largest cuts laid off nurses.
Rewarding Skimpy Care
Eventually, patients at these hospitals had a 6% to 8% worse chance of surviving a heart attack, according to a National Bureau of Economic Research report (March 2011).
In addition to the across-the-board cuts, the Obama administration will now impose a new measure on hospitals: “Medicare spending per beneficiary.” Hospitals that spend the least on seniors get bonus points, and higher-spending hospitals get demerits.
Hospitals will even be penalized for care consumed up to 30 days after patients are discharged, for example, for outpatient physical therapy following a hip or knee replacement.
There are ways to control Medicare spending, such as inching up the eligibility age or asking well-off seniors to pay more. Forcing hospitals to skimp on care is deadly.
Research sponsored by the National Institute on Aging (Annals of Internal Medicine, February 2011) shows that heart attack patients at the lowest-spending hospitals are 19% more likely to die than patients of the same age at higher-spending hospitals. Yet the Obama health law pushes all hospitals to imitate the lowest spending ones.
Ignore the political rhetoric and look at the scientific evidence. The Medicare cuts in the Obama health law will end Medicare as we’ve known it and doom seniors to painful aging and shorter lives.