Cut smart or cut ugly, but cut we must

The Maine Hospital Association warned last week that automatic Medicare cuts will cost the state $21 million next year and nearly 3,000 jobs.

This is the result of the robot-like sequestration process Congress came up with last year. That scheme was designed to be so frightening and so repugnant to both sides that it would force Democrats and Republicans to compromise on a more rational, less harmful plan.

As it turned out, Republicans and Democrats disliked each other even more than they disliked the nightmare of sequestration and the plan failed. True story.

Everyone who's anyone now says sequestration was a stupid idea in the first place and will cripple the economy if enacted.  Yet, here we are, with the stupid plan as our only plan.

The hope now is that with the election out of the way Congress can act swiftly to avert a crisis. Everyone who has faith in that happening, raise their hand.

Yea, didn't think so.

Maine's hospitals are clearly hoping for that miracle. They not only face the sequestration cuts, but Affordable Care Act cuts and Medicaid cuts imposed by the Republican Legislature.

But even if sequestration isn't the answer — and it's clearly not a good one —hospitals had better be about the job of cutting expenses over the next decade.

Medicare is unsustainable, and you don't have to be a hospital CFO to understand that. It is the elephant in the room when politicians try talking about the deficit.

Bluntly, we spend too much on health care and, by a lot of measures, we do not get our money's worth.

Medicare has gone from 11 percent of all federal spending in 1980 to 27 percent today, and that percentage is growing. The United States spent 17.4 percent of GDP on health care in 2009, which is more like 18 percent today.

Most developed countries get the same job done for about a third less ... plus cover all of their people with health insurance ... plus their citizens are happier with their medical systems.

Bankrupted by a major illness? That's unheard of in other industrial countries but shamefully common in the U.S.

Worse, surveys show about a third of what we spend on health care is wasted on unneeded services, bloated administration, mistakes, predatory pricing, fraud and other inefficiencies.

The economic argument made by the hospitals — that jobs will be lost if Medicare is cut — is true, but it needs to be put in context.

Cuts to any government program do the same thing. The Office of Management and Budget estimates that for every $92,000 government spends the money generates one job in the economy.

That's good ... except when you remember that the government borrows $1 out of every $3.71 it spends. About 25 percent of our Medicare spending, by extension, is a dollar we don't have.

How many jobs can we afford to support by paying people, including hospital workers, money we don't have?

Naturally, if we all agree this is a problem worth solving, we must either tax ourselves more to support all these services or stop spending on some services.

But Americans simply won't stand for letting old people go without health care or help paying their nursing home bills, especially when that older person is grandma.

And taxpayers won't stand for the very large tax hikes it would require to stabilize the current Medicare program through taxing alone.

When this election is over, we can only hope there are people left in Congress and the White House who remember the meaning of constructive compromise.

No matter the passion of our politics, in a closely divided country nobody gets everything they want. At least not if problems are to be solved.

rrhoades@sunjournal.com

The opinions expressed in this column reflect the views of the ownership and the editorial board.

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Comments

Steve  Dosh's picture

Cut smart or cut ugly, but cut we must

Ed. , et al., 12.09.16 14:40
ƒish or cut bait , Republicans . You ain't fooling no one , Mitsie . Poop or get off the pot . You can fool some of the people some of the time , all the people some of the time but you can not fool all the people all the time
We happen to - l i k e - our native son President and his wifey and his two darling children , tea baggers
They are certainly more intelligent , creative and trustworty than the Palins , Bachmans , or Jessie Ventura or millionaire politicians who will not realease their tax reutrn , no matter if the are L D S
Now just because the average I Q of everyone in the U S is 100 , ( by definition ) , doesn't mean we want elected officials with the looks and intelligence of bottom feeders . Yet our favorite fish remains the flounder . Ya' wanna know why ? Because even a flounder can choose sides , ME Republicans . h t h ? /s Steve and ohana

PAUL ST JEAN's picture

Who are you calling 'tea

Who are you calling 'tea baggers'? Your syntax suggests you might be referring to "his two darling children", but the realist in me suggests you're referring to the rest of us. Either way, your use of the term is offensive and you should be administratively reprimanded for doing it.

ANTHONY NAZAR's picture

How about capping prices

The Maine media was filled with stories of how CanaRx sells first quality drugs for an average of 50% less than the same drug in the US. The same is true in every oter country in the world.

In the US our dittoheads are conditioned to shriek "socialism" if the suggestion of negotiating a more reasonable price comes up. Heads roll. PHRMA dispatches platoons of lobbyists. Pharmacists flop around on the floor behind their "benches." It's the end of the world.

AWP - average wholesale price - is a little piece of fiction between insurers and the pharmacy business. It allows the insurer to ay less and the pharmacy to continue to make obscene profits. The public pays for this lie through higher premiums and, in the case of Medicaid, taxes.

Acquisition is the real price - want to see a pharmacists face go blank. Ask him or her what the acquisition is for cephalexin. He'll act as though he doesn't understand what you're talking about. Or claim he has no idea. The cost 20 years ago was around $5 for a normal RX including overhead for a fully manned pharmacy in a shopping center. The price was $32. But they were "giving it away." LOL

Prices need to be capped to allow a reasonable profit at all levels.

Steve  Dosh's picture

Tony , Sunday 15:00 hst •

Tony , Sunday 15:00 hst •
" The same is true in every other country in the world.". .not really . .but this is what they do : South Africa and Brazil ( Haiti , also ) have such a high and persistent HIV/AIDs rate that the governments simply produce and distribute the cocktail of anti-retro viral drugs by and for themselves and say , " Screw you pharmeceuticals ."
After , they , those basket cases , are the †rue 99% http://wearethe99percent.tumblr.com/Introduction
h t h ? /s Dr. Dosh

John Frecker's picture

Health care fraud

I found a report on Google from "60 Minutes" that aired in September, 2010, that said that Medicare fraud at that time was about $60 billion per year. There's no reason to believe that the situation has improved.

http://www.cbsnews.com/2100-18560_162-5414390.html?pageNum=2&tag=content...

And I don't believe that covers other facets of our health care system. $60 billion a year and nobody's even talking about it. Being law-enforcement minded, I don't care how much it costs, this fraud should be investigated and the guilty parties should do jail time. As long as we continue to ignore these thieves, they'll continue to steal our tax dollars. We even have a gentleman in the present administration in Augusta who alledgedly improperly over-billed Medicare(?) for over a million dollars, the point being we don't take that kind of fraud seriously.

How can we seriously discuss reducing the cost of our health care system without addressing fraud?

Norman Mitchell's picture

Cuts

What cuts I thought Obamacare was the cure? Not ! so put the blame where it belongs this is not Bushes fault ! This is a perfect example of the Democratic party's refusal to compromise remember come November no one can see you when you cast your vote ! Time to get rid of anyone who is not a conservative and will rein in spending repeal Obamataxcare it only helps you pay more and makes you buy it ! We dont need more taxes just more common sense in where we spend our money stop the foreign aid to those country's who hate us anyway and spend it here Help Americans first we give way something like $23.5 billion every year ! Time to spend that at home we can afford health care we have 23 billion we could spend on it just think about that 23 billion ! I would make sure my family was taken care of before I took care of the neighbors wouldn't you so why cant our government ?

Steve  Dosh's picture

Norman , 15:15 Sunday No

Norman , 15:15 Sunday
No cutting , ( esp . in the shower ( j / k , j \ k ) and don't go and fry a microchip
Yes • It will  
Obama \ Romney care ® goes in to ƒull effect during CY 2 0 1 4
Become a bit more informed about the health systems in the US and Canada B 4 you experience a aneurism
Watch this movie :
http://en.wikipedia.org/wiki/Sicko
. .. and visit this site :
http://www.whitehouse.gov/healthreform
h t h ? /s Dr. Dosh , Bates motel '78 ( l o l - not , Bates college - a very - l i b e r a l - arts institution )

PAUL ST JEAN's picture

Bates College is a liberal

Bates College is a liberal arts institution? Well, if that don't beat Honolulu Lulu to pieces. Who'd have thought?

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