Reprinted from The East Hampton Star

http://easthamptonstar.com/Letters-Editor/20161222/Letters-Editor-122216

12/22/2016

Dear David:

None of us should forget that Donald Trump campaigned very loudly on an explicit promise not to touch anyone’s Social Security benefits. Unfortunately, and with tens of millions of recipients’ benefits now under attack, we will learn whether this promise, like so many others he barked over the last 18 months, is destined to the dustbin of history.

Without any public explanation, especially curious in light of Mr. Trump’s unambiguous promise, Congressman Sam Johnson (R-Texas), the chairman of the subcommittee on Social Security of the powerful House Ways and Means Committee, has introduced another G.O.P. proposal (H.R 6489) to “reform” (read “hollow out all benefit levels”) Social Security, to be taken up when Congress meets next year. Disingenuously described as a method to “permanently save” Social Security, Johnson’s idea of “reform” is to slash nearly everyone’s benefits rather than devise a means to fund the program into the future.

So what would his plan do? According to an analysis prepared by a journalist with Mother Jones (based upon a report by a Social Security actuary), if a recipient has spent his or her life below the poverty level (an annual income of $12,000 or less) Representative Johnson’s plan would bump benefits by 22 percent. Sounds nice, right? Here’s the kicker: people making between $22,000 and $49,000 annually over their lifetimes would see their benefits slashed, up to 28 percent.

It gets worse. Workers having lifetimes average incomes between $49,000 and $78,000 would on average see a 33 percent cut, and those with average annual incomes between $78,000 and $118,000 would suffer an average 43 percent cut, with some benefits cut as much as 70 percent.

Congressman Johnson’s plan doesn’t even pretend to be friendly to middle-class earners. (Remember Trump’s promise to fight for them.) Instead, it treats the long-term health of Social Security as the paramount goal. Because increasing the program’s revenue is anathema to the G.O.P., the only way to achieve that goal is to dramatically reduce its benefits (and the program’s underlying purpose) through deep and broad benefit cuts. For those of you for whom this is a concern, while you may not be able to afford to retire, you can rest comfortably knowing that the Social Security program may be solvent.

As usual with these plans, a lot of its provisions are phased in gradually over time. But some of them kick in right away; even people who are already retired would suffer benefit cuts. As an example, Johnson’s plan reduces the annual cost-of-living increase — and eliminates it entirely for anyone with past earnings over $85,000 — beginning in 2018.

The incoming G.O.P. establishment has already put Medicare and Medicaid on the chopping block. Now, quietly, Social Security has a target on its back. The unbounded cruelty of the G.O.P. elected leaders toward those they serve, namely us, should not be countenanced.

Sincerely,

BRUCE COLBATH

Reprinted from The East Hampton Star 12/22/2016

http://easthamptonstar.com/Letters-Editor/20161222/Letters-Editor-122216

Cost of a New Knee

To the Editor:

How much will my metal knee cost?

One of us is considering a total knee replacement. A titanium knee! So we did some research on cost (the below considerations are applicable to any surgical or medical treatment).

The average overall cost for a knee replacement in the United States is $30,000 to $45,000. The cost is about $40,000 at a hospital in New York City.

More than 400,000 Medicare beneficiaries had knee or hip replacement surgery in 2014, the Department of Health and Human Services reported.

Medicare Part A and Part B (also known as Original Medicare) cover different portions of this procedure and the associated aftercare. How much is covered by Medicare? And what does the patient have to pay?

To keep costs down for the government, Medicare has contracted with the hospital in New York City. Medicare pays a set price for the inpatient hospital portion; let’s estimate $8,000, leaving you to pay a pre-set deductible of $2,000, either from your savings or using a secondary health insurance, if you have one. This covers the Part A portion of Medicare; Part B will pay for physician services.

What about the hospital and the surgeon? Can they charge above the negotiated prices? They have little choice: They can absorb the losses or flatly refuse to take Medicare or Medicaid patients. When Medicare fixes their prices for a given procedure, the hospital and surgeon may not charge the difference between the posted charges and the Medicare reimbursement amount, and the physician accepts “assignment.” The Medicare program developed these payment systems because they realized that hospital charges rarely reflect the true cost of providing services.

The good news is that we found a hospital and a surgeon that will take on the case even though the patient is on Medicare.

Assuming Obamacare is repealed and Medicare is privatized in 2017, how is this going to change coverage for the planned surgery? The government is no longer a player. It is now just the provider (hospital and surgeon) vs. private insurance companies in a free-market system. Insurance companies will want to minimize their costs. They will a) bargain with providers, b) increase the deductible, co-pay, and co-insurance, paid by the patient, and c) increase the monthly patient premium insurance rates. There will be no incentive for providers to cut their costs and be less wasteful.

Obamacare provided those incentives, known as 1) Accountable Care Organizations, designed to coordinate care, and 2) transitioning from a fee-for-service model (paying on volume) to a bundled payment model (paying on disease episode). At the new bargaining table are only insurance companies and the hospital and surgeon. The patient has no representative at the table, since the government has pulled out. As every lawyer will tell you, without legal representation you are screwed.

The worst-case scenario is insurance companies increasing premium rates for everyone, because covering an elderly and sicker patient population without help from the government will greatly impact their risk pool.

It is difficult to model a payment scenario under a newly voucherized system where consumers are given a pre-set premium amount and told to go find the insurance that best suits their needs. We do know the following, though: With Obamacare repealed, insurance companies would no longer be obligated to use 80 percent of premium payments toward patient coverage.

With Obamacare care repealed, lifetime limits may apply. With Obamacare repealed, pre-existing exclusions may come back. With Medicare privatized, deductibles, co-insurance, and co-pays will no longer be set by Medicare, but by the needs of the insurance company.

Let’s make some assumptions. The hospital still offers the procedure for $40,000, and it has contracted with your selected, privatized Medicare insurance to do it for $20,000. However, that $20,000 will include a much higher deductible, co-pays, and co-insurance that will be the patient’s responsibility. So, whereas under traditional Medicare, in our example, the patient responsibility will be about $2,000, payments under a new privatized plan, unfortunately, will skyrocket — perhaps to $4,000 to $8,000?

DAVID N. POSNETT

Nice article quoting NIH director Francis Collins and outlining the dangers of vast budget cuts (by a Republican congress) and how that might have contributed to our poor preparedness for the current worldwide Ebola outbreak.  Having reviewed this topic and given a public talk on Ebola just one month ago, I fully agree.

It should be easy to develop a vaccine against Ebola and there are good projects under way.  But Ebola was never considered a threat to us in America (just a lingering threat for some poor African nations).  No companies want to bring a vaccine or a drug to market, when they don’t forecast profit.  It’s the story of orphan drugs and now orphan vaccines!  The story is compelling because it illustrates that the interests of private companies are not always aligned with the interests of the public.

For the most recent on Ebola, try this source.

NIH budget over the years