Comments on: Cutting Health Care Costs With a Chainsaw http://www.showmedaily.org/2009/07/cutting-health-care-costs.html Advancing liberty with responsibility by promoting market solutions for Missouri public policy Thu, 24 May 2012 00:36:33 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Bill H http://www.showmedaily.org/2009/07/cutting-health-care-costs.html/comment-page-1#comment-3143 Bill H Wed, 29 Jul 2009 02:00:25 +0000 http://www.showmedaily.org/?p=5984#comment-3143 This is already the way the Medicare works. There is a fixed reimbursement rate and all medical procedures are tied as a multiple of this rate (relative value rates). Medicare has a very flawed formula that sets the reimbursement rate each year; currently, it is scheduled to decrease by 5% per year for the next 5 years. Each year, there is a legislative "fix" that mandates (typically) a smaller cut. Some years it is set to impact hospitals more, otehr years it hits the doctors more. Some specialties (especially surgeons) have a much more effective lobby to prevent reductions in thei reimbursements. This is supposed to be set by an "impartial" board, but there are many opportunities for political interference and influence along the way. It is no wonder that 1) the costs have increased at a much faster pace than inflation, 2) there is already rationing in this system - and it keeps getting worse, 3) the system is not sustainable - and will be broke very soon. This is already the way the Medicare works. There is a fixed reimbursement rate and all medical procedures are tied as a multiple of this rate (relative value rates). Medicare has a very flawed formula that sets the reimbursement rate each year; currently, it is scheduled to decrease by 5% per year for the next 5 years. Each year, there is a legislative “fix” that mandates (typically) a smaller cut. Some years it is set to impact hospitals more, otehr years it hits the doctors more. Some specialties (especially surgeons) have a much more effective lobby to prevent reductions in thei reimbursements. This is supposed to be set by an “impartial” board, but there are many opportunities for political interference and influence along the way.

It is no wonder that 1) the costs have increased at a much faster pace than inflation, 2) there is already rationing in this system – and it keeps getting worse, 3) the system is not sustainable – and will be broke very soon.

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