Implementing New Bad Health Care Economic Policy to Fix Existing Bad Health Care Economic Policy Results in Continuing Bad Health Care Economic Policy

Just Another Example of Why Health Care Costs Are Uncontrolled

[Editor's Note:  The Dismal Political Economist has been asked to apologize for the syntax and structure of the above headline for this post.]

A small part of the Medicare payments to hospitals is to reimburse part of their physician training expenses.  The goal of the policy is to encourage the creation of more physicians.  Seems reasonable enough, but as the Boston Globe reports, there are some problems with the program.

Since the early 1980s, Medicare has provided extra money to some hospitals to help them educate the next generation of physicians. The size of the payment has been highly controversial and has faced previous reductions. Executives at teaching hospitals contend it helps compensate for the high costs of treating a sicker, often lower-income patient population and for specialized services, such as burn and transplant centers, unavailable in community hospitals.

No oversight exists, however, to ensure that such payments are being used to address education and specialty needs at these hospitals, and executives are not held accountable for their use, said Alan Sager, a professor of health policy and management at Boston University School of Public Health. He likened hospital payments to “being governed by anarchy

So we have a program that (1) should not be in Medicare anyway, as it is not part of Medicare’s mission to provide health care insurance and (2) is not supervised or managed by the Government.  As a result, it is a prime target for cutting government support of Medicare

In December, a bipartisan fiscal commission set up by the president to examine options for reducing the nation’s ballooning deficit recommended an annual reduction of $6 billion from the $9 billion subsidy. That has spurred negotiators from the White House and Congress who are trying to slice an amount between $1.6 trillion and $4 trillion from the nation’s rising deficit over the next decade.

The cuts are a bargaining chip to secure the votes of deficit hawks in Congress on a measure that raises the limit on how much the government can borrow, ensuring the country does not default on its obligations for the first time.

No people, Government support of physician training is not a “bargaining chip”, it is a vital use of public resources to help with health care.  Eliminating it is implementing bad policy to correct bad policy.  A rational and intelligent decision would be to move the program out of Medicare, where it does not belong and into Health and Human Services, where it does belong, place some supervision over the program so that the money is spent effectively on its intended purposes, and move on.

Of course, nothing very rational or intelligent has come out of the budget and deficit talks so far, so expectations here are that the funds will just be cut, proving that Democrats are just as capable of cutting health care as Republicans.  That of course will produce less qualified physicians and less numbers of physicians.  And no, it will probably not save money as the cost of training physicians that was paid by Medicare is shifted to the private health care system. 

So, for those of you wondering what this “cost shifting” stuff was all about, here is some.