Our Health Care Cost Problem Is Overwhelmingly a Private Cost Problem

Ezra Klein sends us to N.C. Aizenman:

Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you're a senior covered by Medicare, the wait is eight weeks. How about a checkup from geriatric specialist Michael Trahos? Expect to see him every six months: The Alexandria-based doctor has been limiting most of his Medicare patients to twice yearly rather than the quarterly checkups he considers ideal for the elderly. Still, at least he'll see you. Top-ranked primary care doctor Linda Yau is one of three physicians with the District's Foxhall Internists group who recently announced they will no longer be accepting Medicare patients.... Doctors across the country describe similar decisions, complaining that they've been forced to shift away from Medicare toward higher-paying, privately insured or self-paying patients in response to years of penny-pinching by Congress...

As Ezra points out, this fits very ill with the Republican talking point that the government cannot control Medicare costs:

Ezra Klein - What happens when Medicare controls costs too well: One of the dirty little secrets of the health-care system is that Medicare has done a much better job controlling costs (pdf) than private health insurers.

The problem is that Medicare can't control costs too much better than private insurers or, as you see from the article above, doctors will simply abandon Medicare.... [T]he dominant opinion is that Medicare can't control its spending. A lot of this... has to do with the failure of the Medicare Sustainable Growth Rate... a small formula that Republicans inserted into the 1997 Balanced Budget Act that was meant to save a bit of money.... The formula was wrong, and it quickly required massive cuts that would destroy the program, and that the SGR's authors never intended. So congresses controlled by both parties have repeatedly kept them from going into effect. Meanwhile, the SGR formula actually has cut costs in Medicare dramatically.... As James Van Der Water and Jim Horney document, the byproduct of the compromises required to keep the formula's cuts from taking effect is that "the reimbursement rate for physicians next year will still be 17 percent below the rate paid in 2001, adjusted for subsequent increases in the costs that physicians incur in providing services as measured by the [Medicare Economic Index]." This is why physicians are so upset. Meanwhile, the vast majority of Medicare cuts passed in the last 20 years have been implemented as scheduled...