Krugman: Obamacare’s Secret Success

[Scuba]

http://www.nytimes.com/2013/11/29/opinion/krugman-obamacares-secret-success.html

Much of the Beltway establishment scoffed at the promise of cost savings. The prevalent attitude in Washington is that reform isn’t real unless the little people suffer; serious savings are supposed to come from things like raising the Medicare age (which the Congressional Budget Office recently concluded would, in fact, hardly save any money) and throwing millions of Americans off Medicaid. True, a 2011 letter signed by hundreds of health and labor economists pointed out that “the Affordable Care Act contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending.” But such expert views were largely ignored.

So, how’s it going? The health exchanges are off to a famously rocky start, but many, though by no means all, of the cost-control measures have already kicked in. Has the curve been bent? The answer, amazingly, is yes. In fact, the slowdown in health costs has been dramatic.

...

Still, the facts are striking. Since 2010, when the act was passed, real health spending per capita — that is, total spending adjusted for overall inflation and population growth — has risen less than a third as rapidly as its long-term average. Real spending per Medicare recipient hasn’t risen at all; real spending per Medicaid beneficiary has actually fallen slightly.

...

So what aspects of Obamacare might be causing health costs to slow? One clear answer is the act’s reduction in Medicare “overpayments” — mainly a reduction in the subsidies to private insurers offering Medicare Advantage Plans, but also cuts in some provider payments. A less certain but likely source of savings involves changes in the way Medicare pays for services. The program now penalizes hospitals if many of their patients end up being readmitted soon after being released — an indicator of poor care — and readmission rates have, in fact, fallen substantially. Medicare is also encouraging a shift from fee-for-service, in which doctors and hospitals get paid by the procedure, to “accountable care,” in which health organizations get rewarded for overall success in improving care while controlling costs.

[BlueStreak]

1. This is a very under-reported story To hear the MSM, "Obamacare" just started on Oct 1

Last edited Fri Nov 29, 2013, 11:55 PM - Edit history (1)

For several years, we have had to listen to conventional wisdom jackasses say that the reduction in the HC cost spiral was just because of the recession. That was always a nonsense argument because the cost curve remained bent downward as the economy started to recover.

It is practically December 1 now. The media narrative was that the website was completely unusable, but would magically start working on December 1. If a single one of those media assholes would have taken 15 minutes to actually check out their story, they would find that the website has actually been working really well almost the entire month of November, and we have now enrolled over 1,000,000 people in new coverage.

So their narrative will have to change because it is so far from reality. Hopefully we will be approaching a period of more positive, more accurate, less superficial coverage that includes the fact that the law has been making a huge financial impact for 2 years.

It will be interesting to see how soon private insurance companies adopt the new results-driven reimbursement systems that Medicare is using now.

[dmr]

2. +1