StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Do These Shenanigans Qualify as Earmarks?

17 Jul 2009
Posted by Andrew Samwick

Shailagh Murray of The Washington Post gives us yet another reason to despise the way Congress conducts its affairs:

Setting reimbursement rates for local hospitals, doctors, home health-care centers and other providers is a legislative ritual that amounts to one of the most effective and lucrative forms of constituent service. Delivering federal money through Medicare, the country's largest insurance program, can be a powerful tool on the campaign trail, allowing lawmakers to argue that they are creating jobs and improving the quality of health care for voters.

Longtime members of Congress have become masters at dominating the tug of war between keeping providers flush and trying to rein in the entitlement program's dramatic growth. House Ways and Means Chairman Charles B. Rangel (D-N.Y.) champions New York City's teaching hospitals. Charles E. Grassley (Iowa), the Senate Finance Committee's ranking Republican, makes sure rural health-care services are amply funded. Months before Sen. Ted Stevens (R-Alaska) left office, he secured a permanent 35 percent increase in Medicare payments for Alaska physicians.

I would take issue with Murray's characterization of this as a tug of war.  I have seen no evidence of a pull on the side of reining in the program's dramatic growth.  The fine line they are walking is between sending enough money home to their districts to take credit and keeping their activities quiet enough so that no one else notices.   

Tell me again why I want the federal government to play even more of a role in health care.  We would be best served by health care reform that kept the government in the business of what it can do well -- pooling risks so that no one is excluded from the opportunity to buy into a group plan -- and keeping it out of every other aspect of the insurance and delivery of health care services.

And doesn't this story make my recent lament (#3 in this post) seem ridiculous?

Private sector is no better

So why is the growth in spending in the private insurance sector just as rapid? Private insurers could care less about controlling costs--or guaranteeing the quality of care--since they just pass it on to those who pay premiums.

This article also explains why turning over payment policy to MedPAC would be not only a good idea, but also a real mechanism to restrain cost growth.





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