I would like to make one point and then respond to two posts directly. First, I think the basic points about cuts that people are making are important and correct. However, there is actual "cuts" (services eliminated) in the current round of House proposals. The House is proposing (or already has)to eliminate SSI/Medicaid coverage to substance abusers (approx. 20,000 people) and Medicaid immigrant coverage (around 1.4 million people) under the guise of "welfare reform". These are cuts in Medicaid coverage no matter what the talking heads say. The common right-wing notion that there are no cuts is wrong. These are relatively "minor" in terms of numbers involved but they are real cuts that hurt real people with real words in real current legislation. It is true that the bulk of changes will be felt through the block grants that cap growth but it should not be ignored (and provides for an under utilized semantic barb). On Mon, 4 Dec 1995 14:14:18 -0800, Michael Perelman wrote: >The cuts also threaten to undermine the basic concept of insurance. >Private HMOs can cherry pick the healthiest people and leave the >really expensive ones to the state. Then they can show how efficient >the private providers are and eliminate the state programs. I'm not sure that I agree with the connection here. The Medicaid/Medicare changes are inspired in part by a desire of the government to do some "cherry picking" of its own (at least provides the opportunity to do so). This is what it means to change Medicaid from an entitlement to a block grant. Under the block grant each state can deny coverage to people needing expensive services. It does not take great imagination to foresee a state denying or tightening AIDS/HIV hospice services or Intensive Care Facility services. The "optional" services under current Medicaid will structurally be hit hardest (although I would predict that Prescription Drugs will not be cut because they are very cost effective--high patient satisfaction at low cost) and the optional services hit the groups that cost the system the most--chronically ill older folks and people with disabilities. I agree wholeheartedly that the dubious practice of "cream skimming" is fundamental to a critique of US health care as it stands (read warped, confused and profitable) but see the Medicaid/Medicare changes as a response of the state to "cream skim" as well. At 11:47 AM 12/5/95 -0800, Neil Buchanan wrote: >One part of the "cuts" rhetoric that is not getting much mention is how the >numbers are being added up, i.e., no matter how you define a "cut," what >does it mean when you describe a bill as necessitating a "20% cut in future >spending." If it seems obvious that this means spending 20% below whatever >your baseline is, you're only partly right. To take a simple numerical >example, suppose that a program was slated to have $10 million spent on it >each year for the next 7 years, for a total of $70 million. (Attention >finance types: I am NOT going to discuss present value discounting here.) >Then suppose that the new bill entails the following sequence of annual >spending totals: $10 million, $10 million, $9 mil., $9 mil., $8 mil., $5 >mil., and $5 mil. Over the seven year span, you will have spent $56 million, >or 20% less than $70 million. Yet, with the "back-loading" in this plan, >your program is funded at only half of its original level after the fifth >year--i.e., a 50% cut. This is largely correct but the example is misleading in the current discussion. Nominal spending under all current health proposals grows. Nominal spending grows most under current law projections (9-11% per year) and least under House cuts (quickly capping growth at 4% in 1997). Your example is of a nominal decrease (but I think I know what you were getting at--the difference from the baseline grows steeply over time and hence the burden is "back-loaded"). Jim Westrich University of Illinois--Chicago Institute on Disability and Human Development (M/C 626) Applied Research Unit 1640 W. Roosevelt Rd. Chicago, IL 60608 Phone: (312) 413-7862 Fax: (312) 413-1326
