Friday, August 6, 2010

Should we cut or cure our way to Medicare solvency?

What’s the best way to reduce the growth of Medicare spending?   Cuts or cures?   Dueling articles on the front page of Friday’s New York Times remind us, yet again, of the choice we face--even if we don’t always recognize the existence of that choice.  

The choice is this: Should we seek to decrease future spending for Medicare as a matter of fiscal retrenchment--or should we seek to increase the health that obviates the need for greater Medicare spending?  Or at least pushes such spending further into the future, by extending the productive life of American workers?   The answer might seem obvious: cures are more humane--to say nothing of more  popular--than cuts.

But if it’s obvious that cures are more popular than cuts, we might ask: Why are cures so rarely considered as part of any overall fiscal plan?    Why is that our politics are so consumed by discussion of spending and deficits, while so little attention is paid to alternative strategies of spending restraint and deficit reduction?

One possible explanation is that cures don’t save money--although, of course, we know better than that. By eliminating polio, back in the 50s, America saved a lot of money on polio treatment.    More recently, we might think how much money has been saved by reducing HIV/AIDS from a quick killer into a disease that’s more manageable, at least in the US.   That huge investment, in the 80s and 90s, has paid off hugely.

So the bottom line is clear: cures are an effective way to cut spending.

So why the neglect of cures?  Why the focus on cuts?   We must turn to other explanations.   One such other explanation is that politicians and the policy class just aren’t interested in cures, because they are preoccupied with politics and policy of the kind that they, the policymakers can understand to delve into the mental equivalent of terra incognita.   Not too many policymakers understand biology and chemistry, to say nothing of advanced oncology, but they do understand, sort of, taxes and spending.    And so--no surprise here--the political class focuses on what it knows.   We can be reminded of the old joke about the man looking for a dollar bill on Third Street.  Yes, the dollar bill was lost on Fourth Street, but the light is better on Third Street.   It’s simply human nature to think about, and talk about, that which is familiar.   There’s a mental groove there, already dug, and so the waters of our thinking naturally flow into that groove.   Of course, another way of saying “groove” is “rut.”

In addition, the media reinforce this “rut thinking.”   Media coverage on fiscal issues exists in one cone, or silo, or rut.  While at the same time, media coverage on medical issues--issues of diseases that either are, or are not, cured--exists in a different cone, or silo, or rut.  

Here at Serious Medicine Strategy, we have many times lamented this bifurcation of news about healthcare.   Bifurcated, that is, between policy (mostly taxes and spending, with a little bit of litigation and intellectual property) and medicine (everything to do with science and cures).

On one side of the divide, in one rut, we see news about healthcare finance--insurance, government, and so on.   And on the other side of the divide, in a different rut, we see news about healthcare itself--that is, medicine.

This split was never starker than in today’s New York Times, where the front page featured two articles illustrating the bifurcation:  One article was about the Medicare trust fund, and projections for its  solvency, and the other article was medical and scientific, concerning two scientific studies on the implications of cell-regeneration.

The lede of Times' policy story, headlined, “Medicare Stronger, Social Security Worse in Short Run, Report Finds,” co-written by Robert Pear and Jackie Calmes this morning, is upbeat:

Medicare will remain financially solvent for 12 additional years, until 2029, because of the cost-cutting measures in President Obama’s recently enacted health care legislation, the program’s trustees projected on Thursday.

That all sounds pretty good.   But the headline from Edmund L. Andrews in The Fiscal Times, published by the Peter G. Peterson Foundation, was more downbeat:  “New Medicare Report: Is It Based on a Rosy Scenario?  New report also confirms Medicare and Social Security headed for insolvency in the long term.”

So what’s the difference between the two Timeses?   Actually, there’s not much difference between the two reports.  As the NYT observes, the good news about Medicare solvency--those 12 extra years--is based on the assumption that Medicare cost-cutters will succeed in squeezing out some $500 billion in savings over the next decade.   And there’s little evidence of that happening--at least not in a way that the American people would accept.  To think otherwise, as TFT puts it, is to believe in the proverbial but mythical “rosy scenario.”

Moreover, the NYT adds these grafs, toward the end of the article that confirm TFT's pessimism:

The report also assumes that Medicare will cut payment rates for doctors’ services by 23 percent on Dec. 1 and by a further 6.5 percent on Jan. 1, as required under existing law.

This assumption is unrealistic, the report said, because “Congress is virtually certain to override” the scheduled cuts, as it has done in recent years.

And of course, Congress has no intention of cutting Medicare reimbursements by nearly 30 percent.   Already, doctors and hospitals are abandoning Medicare, although it's safe to predict that political pressure will scrounge up the money to keep this trend from becoming a stampede.

So what to do?   Do we just watch helplessly as Medicare costs ramp up?   Or do we launch a plan for curing heart disease?  

And so we come to the other NYT article, the one about science, headlined, “Two New Paths to the Dream: Regeneration.”  Written by Nicholas Wade, the article details the efforts of two different teams of scientists--one at Stanford, the other at the University of California San Francisco--to find ways to encourage tissue to regrow itself.  (The screen grab above is taken from Wade's article.)  One major target for this research is heart disease; it’s possible to imagine the day when doctors could inject heart-muscle cells and thereby order the heart to repair itself.

Is this science complicated?  Yes.  Does the mere discussion of it disempower politicians who don’t understand the science involved?  Yes.   Does this science involve touchy issues, such as stem cell research--as noted by Science Daily?   Yes again.    And for all these reasons, that’s why politicians are so little interested.

And the Times deserves great credit for publishing both articles--fiscal policy and scientific advancement.   But it would be nice if the Times would do a better job of linking the two articles together, so that science could be considered as a part of policy, and policy could be considered as a greater aid to science.

But no matter what, the rest of us should be interested--because as we have seen, the fiscal approach to Medicare savings quickly hits the dead end of public resistance.  People want to live and enjoy life.   And they stand to reward those politicians who help them do just that.  

Something for vote-hungry politicians to think about: There’s more upside in scientific advancement than in political rhetoric.   And that's true, even if the political rhetoric is more fun for the rhetorician.


  1. “What’s the best way to reduce the growth of Medicare spending? Cuts or cures?” you ask.

    Answer: Both!

    I would audit the hell out of those submitting bills. The fraud that is going on is as bad, maybe even worse than the number of Invaders who have crossed our country’s southern frontier. I’m willing to bet that if we could make Medicare billing kosher, most of the cost of our un-insured problems would go away. Yes, that’s how much stealing is going on, maybe 35%. And we think Afghanistan is corrupt? Lets grow up!

    Our Media coverage? It’s a joke! The BBC has frequent, even daily, articles on current scientific medical advancements much, much more than us. Their readers are made very aware of the efforts for cures.
    If you check on a daily basis or the Irish Times at
    you’ll see many more articles than we have here in the States. Then ask yourself, why aren’t we seeing these in our newspapers as frequently? Write your Editors; see what they have to say. Yea, I know they ignore us. They have their own agendas, what I have recently labeled “White Trash” Journalism referring to a ‘segment’ of the far left who are in their own world.
    Maybe your colleague, Christopher Hitchens, who has cancer, can give humanity one last gift in taking these so called Journalists out to the wood shed?

  2. Even if you are right that scientists can spend money more profitably than politicians (which is almost certainly true) that really ignores the fact that it's not their money in the first place. Don't try to figure out better ways for the government to spend our money! Help us get them to not spend it at all and leave it with the people who rightly own it. If you then want to appeal to them to fund medical research I am sure they will be receptive (now that they aren't broke and desperate with an army of bureaucrats (and well-meaning journalists too apparently) standing between them and their doctors.

    The fundamental issue here is that free markets are the best way that works (the only way really) to properly allocate resources and while politicians might well be the worst at trying to do better, I doubt that journalists would be all that much better. I think yo uare playing "If I were king of the world..." a little too much.

  3. I would like to comment on any attempt to cut doctor's fees, it does not work. At present PC medical groups do not have to accept any insurance, the patient is invited to seek their own reimbursement. Additionally, cardiologists are snipping procedures such as bypass operations because they feel that there is no profit.MD's are a tough crowd, they paid plenty for med school and stayed up all night as interns and they are not going to take it.