It seems that only a year ago we were being entertained by some with tales of Medicare cuts, death panels, and the need for someone to save us from a government takeover of medicine. Now, a year later it turns out that government took health care over some time ago (as seen here); it is important for those of us under 55 to accept our Medicare cuts gracefully;  and while there are no death panels yet, there maybe cuts that may lead to increased deaths (but not how you think).

Assuming Congress doesn’t learn to do better in sandbox, come December

Cuts to Medicare would be capped at 2 percent of current Medicare spending, or roughly $11 billion a year for a 10-year savings of approximately $130 billion, said Eric Zimmerman, a Washington attorney and lobbyist for the hospital industry. Details of how the cuts would be carried out remain to be seen, but Zimmerman says it could mean a flat 2 percent reduction in payments to Medicare providers, including doctors, hospitals, nursing homes, and private insurers that offer plans with Medicare benefits.

Doctors and hospitals are alarmed, they state. What alarms me even more is that the system (the one in which the USA is ranked number 72 in overall health, 37 in overall system performance, and 1 in cost) would achieve only a slight savings (2%) in one program (Medicare) through across the board cuts.

When fees were cut by Medicare for ophthalmology in the 1990s, the effects were as follows:

10% reduction in the fee for a cataract extraction will cause ophthalmologists to supply about 5% more non-cataract services. … The suggests that physicians behave more like profit-maximizing firms than target income seekers.

Or, put another way

Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the effective Medicare fee.

In other words, there are those in leadership positions who think we should repeal the Affordable Care Act and that by simply cutting Medicare fees across the board we can cut costs. If this happens without changing the structure of care or the incentives, the evidence suggests that doctors will simply rearrange the game so that they’re providing more services (illustrated here and here). Excess care leads to excess death. So, maybe rationing and death panels are the least of our worries…

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