I want to step back from the bedside for this post. The anecdote I wrote in the last post left me pondering the Ryan plan.
My superficial reading of the plan from Paul Ryan leaves me immediately with a host of concerns. I will mention in passing his plan is contrary to the political reality that elderly voters from across the political spectrum like Medicare. I will leave for another day two obvious failings of his plan. Namely, he proposes no solution to the problem of a large uninsured and underinsured population and the problem of rising medical costs. (I now hear now this latter issue is solved in the Ryan plan simply by accepting those provisions of the Affordable Care Act (ACA) that seek to cut costs--Repeal everything else, declare it odious, but keep these useful bits for me.)
What I wish to dwell on is how the Ryan plan will exacerbate the cost shifting I mentioned in the last post; something that the chairman ignores in his budget: I will propose in a moment his budget could not have been implemented in a worse decade and, for the insurance-carrying adult population, he could not have picked a worse arrangement.
Lets begin with some useful facts. The most expensive portion of our health care costs are hospital systems with expensive testing facilities and complex patients. The financial arrangement that supports hospitals has been unusually strained since 2008: While unemployment remains high, the pool of individuals with employee-based insurance is smaller and it needs to carry more of those who are uninsured. In good times such as early 2007, this arrangement meant that 70% of the population with insurance covered the other 30%. (Figured into that smaller percentage are Medicare and Medicaid recipients, and Self-pay patients—I suspect some may not have yet heard this jargon for an uninsured patient who pays out of pocket.) In my hospital 2009, we watched the number of self-pay patients double to about one fifth (18%) of all patients; this amounts to fifty million people I hear. Is it now 65% carrying the other 45%, or an even worse ratio?
In the next decade, we have a demographic challenge. By 2021 the percentage of Medicare patients seen in hospitals will be twice what it is now or more importantly nearly 2/3 of all patients seen in hospitals.
The Ryan plan will exacerbate cost shifting by limiting the outlays to the states for Medicaid and Medicare. Its not like the numbers of sick are going to be reduced by any of this so either fewer will be on Medicaid (read more self-pay patients) or Medicaid will reimburse less. Something similar will be occurring with a limit on Medicare outlays—supporters would say voucher is such a harsh word. So we could have three areas of fixed reimbursement, Medicare, Medicid and self-pay patients but hospitals would still try to remain afloat by negotiating higher reimbursement from the insurance companies. Poof! Exploding insurance rates. (I would argue they are exploding now, but I do not have a word at this late hour to convey something faster than an explosion.) I do not think I am missing something when I say that the budget plan is more a threat to insurance than Medicare. Said another way, the Ryan plan may bring an end to insurance before it brings an end to Medicare. I will look for outrage from Insurance companies in the upcoming weeks.
In addition, something hit me personally about the plan. The plan demands something painful of forty and fifty year olds, something beyond just giving up traditional Medicare. The plan asks that generation, my generation, to cover the generations before them (us) who will still have traditional Medicare—with its ‘unaffordable’ costs, and also ask them (us) to start saving now for a retirement with expensive insurance. Folks younger than me at least have more time to prepare.
This latter aspect of his plan is particularly surprising to me given that the plan compels people to buy expensive insurance. If my read of the recent election is any clue, Tea Party supporters most vocal about the dreaded individual mandate for health insurance were from my generation and should be appalled by this prospect. In contrast I hear they promoted it. How can that be right? Without actually including an individual mandate, he seems to be flirting with that provision which is most inflammatory about the Affordable Care Act.
I will conclude with a speculation for why such a flawed plan made it this far and continues to be applauded. Critics have used the terms ‘immoral’ and ‘irresponsible’ to describe the Ryan plan. As much as I am exasperated with the lock-step support of the plan, I do not see supporters being so vindictive. Instead, for me a more plausible explanation for the imperfect plan is ignorance of the failures of health insurance--as my patient from the last post exemplifies-- matched to courageous (outrageous) optimism in the power of markets applied to medicine--well I will have more to say on the limits of markets some other day.
Updated by Knute Heimdall at Wed May 04, 2011 at 05:59 PM PDT
On Monday, I spoke to the social worker for the ICU and cardiac floors She was not aware of the premise of the plan. She is the person who arranges Medicaid and financial services for the uninsured patients. If she had not heard of this proposal, she should at least know about it, . then I feel all the more motivated to shout out why I think this thing is a turkey.