The Maine Hospital Association warned last week that automatic Medicare cuts will cost the state $21 million next year and nearly 3,000 jobs.
This is the result of the robotlike sequestration process Congress came up with last year. That scheme was designed to be so frightening and so repugnant to both sides that it would force Democrats and Republicans to compromise on a more rational, less harmful plan.
As it turned out, Republicans and Democrats disliked each other even more than they disliked the nightmare of sequestration and the plan failed. True story.
Everyone who’s anyone now says sequestration was a stupid idea in the first place and will cripple the economy if enacted. Yet, here we are, with the stupid plan as our only plan.
The hope now is that with the election out of the way Congress can act swiftly to avert a crisis. Everyone who has faith in that happening, raise their hand.
Yeah, didn’t think so.
Maine’s hospitals are clearly hoping for that miracle. They not only face the sequestration cuts, but Affordable Care Act cuts and Medicaid cuts imposed by the Republican Legislature.
But even if sequestration isn’t the answer — and it’s clearly not a good one — hospitals had better be about the job of cutting expenses over the next decade.
Medicare is unsustainable, and you don’t have to be a hospital CFO to understand that. It is the elephant in the room when politicians try talking about the deficit.
Bluntly, we spend too much on health care and, by a lot of measures, we do not get our money’s worth.
Medicare has gone from 11 percent of all federal spending in 1980 to 27 percent today, and that percentage is growing. The United States spent 17.4 percent of GDP on health care in 2009, which is more like 18 percent today.
Most developed countries get the same job done for about a third less … plus cover all of their people with health insurance … plus their citizens are happier with their medical systems.
Bankrupted by a major illness? That’s unheard of in other industrial countries but shamefully common in the U.S.
Worse, surveys show about a third of what we spend on health care is wasted on unneeded services, bloated administration, mistakes, predatory pricing, fraud and other inefficiencies.
The economic argument made by the hospitals — that jobs will be lost if Medicare is cut — is true, but it needs to be put in context.
Cuts to any government program do the same thing. The Office of Management and Budget estimates that for every $92,000 government spends the money generates one job in the economy.
That’s good … except when you remember that the government borrows $1 out of every $3.71 it spends. About 25 percent of our Medicare spending, by extension, is a dollar we don’t have.
How many jobs can we afford to support by paying people, including hospital workers, money we don’t have?
Naturally, if we all agree this is a problem worth solving, we must either tax ourselves more to support all these services or stop spending on some services.
But Americans simply won’t stand for letting old people go without health care or help paying their nursing home bills, especially when that older person is grandma.
And taxpayers won’t stand for the very large tax hikes it would require to stabilize the current Medicare program through taxing alone.
When this election is over, we can only hope there are people left in Congress and the White House who remember the meaning of constructive compromise.
No matter the passion of our politics, in a closely divided country nobody gets everything they want. At least not if problems are to be solved.
Sun Journal, Lewiston (Sept. 16)