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BERJAYA

Rivlin's Rebuke and Why It Matters

BERJAYA

When Paul Ryan introduced his proposal for converting Medicare into a system of “premium support,” he reminded everybody that it closely resembled another Medicare proposal—one he’d developed with Alice Rivlin, the Brooking scholar and former Clinton Administration advisor. “Alice Rivlin is a great, proud Democrat,” Ryan said. “This path to prosperity builds upon those Ryan-Rivlin plans that we put in here.”

It’s true that Rivlin is a Democrat, albeit a fairly conservative one on fiscal issues. And it’s true she worked with Ryan on a premium support proposal for Medicare. But Rivlin says she cannot support the new Ryan plan for two key reasons—and she has spent the last 24 hours telling anybody who would listen about them.

The concept of premium support for Medicare is fairly straightforward. Instead of giving seniors insurance, the federal government would give seniors a fixed some of money—what most of us would call a voucher—for buying private insurance. But Rivlin told Politico (among others) that she prefers maintaining traditional Medicare as an option for anybody that wanted to enroll. (I’m not sure this was explicit, or even implicit, in the original Ryan-Rivlin plan, at least based on this Congressional Budget Office evaluation. But Rivlin is saying it now.) In the new Ryan plan, Medicare would no longer be available to new retirees as of 2022.

Whether traditional Medicare could survive as an option, in the sort of system Rivlin says she envisions, is open to question and would depend, in part, on the regulations governing the whole system. But, at least in principle, she wouldn’t force people into private insurance. The new Ryan plan would.

The other key difference is the money. In a premium support system, the value of the voucher grows by some fixed formula. Ryan-Rivlin set that formula at GDP+1—in other words, the voucher would increase every year, enough to accommodate inflation plus productivity growth (which is what GDP represents) plus one additional percentage point.

That’s still not a lot. In fact, many critics argued—persuasively, in my view—that giving seniors vouchers that increased in value so slowly would force seniors to bear ever higher costs for their medical care, imposing real hardship. The Center on Budget and Policy Priorities was among those making that case.

But the voucher in the new Ryan plan would increase in value even more slowly than the voucher in Ryan-Rivlin. Instead of rising at GDP+1, it would rise at inflation—in other words, there'd be no adjustment for productivity growth and no extra percentage point. “In the Ryan version, he has lowered the rate of growth and I don’t think that’s defensible,” Rivlin said. “It pushed too much of the cost onto the beneficiaries.” As Ezra Klein observed, “it’s totally unrealistic. … either those savings aren’t real or we’re assuming America is going to abandon seniors and the disabled in a way that has no recent precedent.”

I agree. And there’s a broader lesson here, one that applies to any efforts at controlling health care costs, from the left or the right (or some combination thereof). We need to do something to make health care less expensive and we need to get started right away. But, particularly early on, we need to move slowly. The system can absorb only so much shock at once. If you clamp down on spending too quickly, it’s going to cause serious harm to somebody, whether it’s providers or insurers, employers or beneficiaries. The best strategy is to apply cost control gradually and broadly, as part of a system-wide reform like the Affordable Care Act, so that the sacrifice is tolerable as well as shared.

Update: I originally misstated the value of the voucher in the Ryan plan; I've since corrected that. Also, Ezra just posted a full interview with Rivlin, in which she not only reiterates her rejection of the new Ryan plan but explains why she supports, as an alternative on health care, the Affordable Care Act:

...there’s a great deal in the Affordable Care Act in terms of research, pilot programs, alternative payment structures, alternative delivery systems, research on the effectiveness of treatments, that is needed. That’s why we need to keep the Affordable Care Act and strengthen the parts that hopefully give us more cost-effective care in the future. If you just control the federal spending without changing the delivery system, you just get cost shifting.
COMMENTS (43)
04/06/2011 - 3:48pm EDT |

So, can someone ask Alice Rivlin to respond to Paul Ryan not as a policy wonk, but as a politican would? You know, something to the effect that she is shocked and dismayed that Ryan is dragging her name around claiming bipartisanship for his health care plans when she completely and totally opposes what he is doing with them? Can she get herself quoted by news outlets other than Politico and Ezra Klein, so that the average voter who pays some general attention to this stuff through the main news media channels and the news blurbs in his e-mail account can see headlines like "Democrat Who Worked with Ryan Repudiates His Plan"? Because if that doesn't happen, Ryan can just keep lying that h ... view full comment

04/06/2011 - 3:58pm EDT |

It's true that the delivery of health care is inefficient; and it's also true that ACA has many provisions designed to make it more efficient. But the reality is that, no matter how much more efficient it may become, controlling costs will require more. And there are two ways to accomplish it: the Ryan way, which is to put a government cap on medical insurance and medical care for seniors, and the freedom of choice way, which is for seniors, in consultation with their physicians, their families, and their clergy, to make the best choice for medical care. Treating seniors as the mature adults that they are would be the first step to controlling health care costs.

04/06/2011 - 4:48pm EDT |

Rivlin, for all of her honesty, intelligence and effort in trying to work on a plan to address the issues of Medicare, has fallen victim to the classic Right's slight-of-hand trick of calling for 'bipartisanship' and then disingenuously using said Democrat's name to drag it through the mud as the Right claim victory by using 'bipartisanship' as a form of whitewashing their regressive and anti-progressive policies back into the Gilded Age of Robber Barons.

Now she realizes that the only way to pursuade folks that her name isn't attached to the Ryan-Rivlin plan is to claim her name isn't THAT Rivlin but another Rivlin who tried to do right by the world and has had her name, position and ... view full comment

04/06/2011 - 5:47pm EDT |

I would second rayward that treating people making decisions about their health care as adults is a big step in the right direction, but I would add that a big part of making adult decisions is making cost vs benefit choices. If most or all of the cost of your decisions is covered "magically" by the government or subsidized insurance, that won't happen.

Here's how an adult consideration would go, in my mind. As we age in retirement, an INCREASING fraction of health care costs, beyond basic life support and palliative care, would come out of seniors' own pockets. I would do this proportionally - by percent of assets, not by absolute dollars - so to make it clear that choosing, say, an organ ... view full comment

04/07/2011 - 8:21am EDT |

Well spoken, Iowa. Very well spoken.

04/07/2011 - 8:30am EDT |

Amish death panels -- does the former 1/2 governor of Alaska know about this?

Dan

04/07/2011 - 9:00am EDT |

Iowa, you seem well-intentioned enough, but, speaking as a physician, let me assure you that your idea of somehow gradually introducing market incentives into personal medical choices is pure fantasy. You want seniors to have to pay for everything beyond "basic life support" out of pocket, but really for all old people and people of any age suffering from chronic diseases, ALL medical care is "basic life support." Certainly the expensive stuff such as ICU care, major surgery, and life-long drug treatment for conditions such as diabetes, hypertension, coronary artery disease and congestive heart failure are life-extending treatments. No patient ever says, "Oh, if you knocked three grand of ... view full comment

04/07/2011 - 9:16am EDT |

To Iowa Beauty, most of us in the US are not Amish farmers still living in the 18th Century. We are 21st Century citizens of the most powerful and potentially the most productive nation in the history of civilization.

I see how so many of my Fairfield County, CT (and by extension Westchester County and Upper East Side NYC) neighbors handle their lives -- with ostentatious displays of wealth, wealth largely from banking and hedge fund activities along with inheritance and services (such as law) to the bankers, hedge fund operators, and heirs. (Very little of the big money today comes from actually producing useful things.) With some reasonable tax increases, which would not lower my neighbo ... view full comment

04/07/2011 - 10:24am EDT |

AaronW, I think you and Iowa are in agreement on the whole rationing thing, and the rationale for it; Iowa just took a more humanistic approach to the position, whereas you've taken a more rationalized approach.

04/07/2011 - 11:12am EDT |

To GSpinks: Re - "AaronW, I think you and Iowa are in agreement on the whole rationing thing, and the rationale for it; Iowa just took a more humanistic approach to the position, whereas you've taken a more rationalized approach."

Their agreement about rationing means that they both want to limit access to health care, which in our wealthy nation is neither economically necessary (quite the contrary) nor ethically defensible.

AaronW, by the way, as an MD will probably never have to face the prospect of rationed health care, nor as I said above will my wealthy hedge fund and banker neighbors, for whom even a $1 million medical bill is only a drop in the bucket.

Let's improve, in a reasonable wa ... view full comment

04/07/2011 - 11:30am EDT |

A better start would be to catalog the differences between the French system and ours in terms of the nature and extent of treatment, the outcomes, and the prices. We have valuable precedents we could look at in detail. In our American hubris, we refuse to do so simply insisting, despite evidence to the contrary, that this is the best system in the world.

One thing is certain. Doctors in France do not make millions. Yet, they are not short of doctors there. We would save a fortune just by controlling physician prices and utilization and providing to the most qualified a free medical education, right through specialization, for the number of doctors we need. Set drug and device profits ... view full comment

04/07/2011 - 11:56am EDT |

"Really, what you're advocating is a form of treatment rationing. Not only that, it's a spectacularly inefficient form of treatment rationing. Of all the players, patients are the least well-positioned to formulate rational cost/benefit analyses; they lack the requisite knowledge and training to accurately assess the true value (or lack thereof) of treatments being offered them and because it's they who are staring death in the eye, they quite systematically and dramatically overvalue treatments that offer limited benefit or, what is much the same thing, a limited likelihood of significant benefit."

Yes, I am advocating rationing treatment for people at the long end of life. I do not in any ... view full comment

04/07/2011 - 12:13pm EDT |

"To Iowa Beauty, most of us in the US are not Amish farmers still living in the 18th Century. We are 21st Century citizens of the most powerful and potentially the most productive nation in the history of civilization."

The Amish live in the 21st century, in the same country you do. They just choose to live differently. We could learn from some of those choices, in my opinion.

"we can favor life over death for even those with ultimately terminable cancer and pneumonia."

I favor life over death. I don't want to kill any person. But we all die, and I don't favor a system that thinks every life extension is worthwhile. Not all are. If anyone can show me how folks like the Amish are emotiona ... view full comment

04/07/2011 - 3:28pm EDT |

With respect to Iowa Beauty - nuts.

Just nuts.

You do not have the right to say this or that person is worth less because he or she is over a certain age.

04/07/2011 - 3:49pm EDT |

Furthermore: where is all this magic money, supposedly owned by seniors, coming from?

Do you realize how truly poor most of us are? especially in regard to our so-called health care system which is actually more closely resembling a network of high-priced professional vultures.

This is especially so since the devaluation not only of people's homes, portfolios etc but also - of our time.

Our time and educations and creativity are also not considered valuable. Labor isn't considered valuable. The arts - forgetaboutit. Yet these are things - wisdom, artistic skill, even creativity - that improve with time and with age are they not?

As for labor in general, I'm not just speaking of old people ... view full comment

04/07/2011 - 4:50pm EDT |

"And artificially limiting life because of some arbitrary time line that declares one "less valuable" because you're over 70 and/or because a person might not be lucky financially - what on earth is right about that? That is jungle law not human law."

Sophia...I'd like to comment regarding your last passionate post. The complexities of dealing with an aging adult are not easy. Least of which when it is your parent. My grandmother passed away a week after she turned 90. She had had many ups and downs the last 15 years with broken hips, hernias, pneumonia, etc. Each time she went into the hospital it seems my mother and her siblings were hold bedside vigils because they thought it was the "it's ... view full comment

04/07/2011 - 4:57pm EDT |

Pete et al, limitation of access to treatment happens every day all around the world including the USA. It is an inevitable part of medicine. Not all patients derive equal benefit from given treatments, however the process of determining who will benefit from treatment and who will not is a crude science and such decisions are often subject to debate and disagreement. The question is where do you draw the line? If a treatment costs $100K and gives 90% of those who receive it 10 years of additional life, by the standards of most everyone in the developed world it gives good value for money. But what if it cures only 10% of those who receive treatment and the other 90% derive no benefit a ... view full comment

04/07/2011 - 5:00pm EDT |

-

Sophia writes, "You do not have the right to say this or that person is worth less because he or she is over a certain age.".

From neonatal to geriatric care and at all stops in between a culture balances the costs and value of health care. And those costs include pain and suffering along with financial considerations. It is folly to claim people do not choices regarding worth, it is part most medical options.

But it is probably taboo to question postponing death at any age in the United States. Rich or poor, young or old we place an irrational price on not dying and that cost often excludes pain, suffering and dignity. Does a person have the right not to live or is not dyin ... view full comment

04/07/2011 - 7:41pm EDT |

Of course there are limits. I don't think it's smart medicine or even kind to spend millions of dollars to keep a person alive for an additional six weeks - but then - who are any of us to judge? I just lost a dear dear friend - she had liver cancer. Another has acute leukemia. The former was 87 and the additional months she lived, no doubt expensive months - were incredibly precious to us.

My friend with acute leukemia is 62. She will die soon regardless but without EXPENSIVE care would have died a year ago. Nevertheless, I am sure that she and the people who love her are grateful for the time she's had.

Who are any of you to judge?

More importantly - there is a real ageist thing goi ... view full comment

04/07/2011 - 10:11pm EDT |

"I don't think it's smart medicine or even kind to spend millions of dollars to keep a person alive for an additional six weeks - but then - who are any of us to judge?"

Who are we to judge? We are the members of the society that has to pay for this stuff. We HAVE to get better at making these hard decisions. American's burn through the majority of their lifetime medical expenditures in the last six months of their lives. Now, the problem you run into is knowing propspectively when that last six months has begun. Especially at the beginning of that time, it can be pretty hard to tell whether a patient has one week, six months or five years left to live. However, the assessment can be ma ... view full comment

04/07/2011 - 11:39pm EDT |

AaronW, I hope that when I'm 85 you're not my doctor.

It is simply arrogant, unacceptably arrogant, to claim that patients and their families can't make informed decisions -- with professional support -- about questions of life and death. In fact, they are the ones who should be making those decisions. Come off your pedestal, man. Yes, you have a MD degree, but you are a human like the rest of us.

What you are in fact advocating are death panels, purely and simply. Palin may have been wrong to say that they are part of Obamacare, but you clearly think they should be.

The $20,000 for an ICU to possibly save a life is a pittance compared to the literally billions that could be saved with va ... view full comment

04/08/2011 - 12:48am EDT |

Yes, I am advocating death panels. That is, I am advocating that groups of physicians--it is a good idea if more than one doc contributes to such decisions--who are actively treating individual patients make a realistic assessment of those patients' likelihood of benefitting from further treatment and stop treatment when that likelihood is unacceptably small.

And cost isn't the only consideration here. There's also the valueless extension of suffering to think about. You imagine that you wouldn't want me to be your doctor when you're 85 and the old man's friend, pneumococcal pneumonia strikes, but think seriously about the alternatives: you can be looked after by me and receive some oxygen ... view full comment

04/08/2011 - 12:52am EDT |

BONE marrow transplant. Jeez, this site really brings out my dyslexia.

04/08/2011 - 1:04am EDT |

Preventative care doesn't save money. It costs money, and it doesn't prevent hospitalization and other more intensive forms of treatment, it only postpones them. Everybody's gotta die sometime.

No, the only way to reduce healthcare expenditures is to reduce the intensity of health care utilization, and the only way to do that is identify situations in which treatments are being offered that give little bang for the buck. But such situations are almost always probabilistic; few treatments offered have ZERO potential benefit. So what you have to do is tell people who have a small but real chance of benefitting from treatment that they can't have that treatment. If you want to call that a ... view full comment

04/08/2011 - 1:06am EDT |

You can be my doctor any time aaron. What you describe is what I think of as compassionate care. My medical instructions say that those charged can withhold or require any procedure they see fit, asks them specifically to minimize suffering, and states that the standard they should apply to their decisions is only compassion. And I was sure to thank them for undertaking the responsibility on my behalf in the hope that guilt would play no part.

04/08/2011 - 9:51am EDT |

"You do not have the right to say this or that person is worth less because he or she is over a certain age."

I agree, and I have no desire to make such a determination for anyone other than myself, or people close to me who have entrusted me with those judgments - as my answer to AaronW makes clear. Those decisions belong to the people involved.

Where we clearly disagree is that I think the cost of those decisions needs to be born partly by those deciding, so that they are considered in the decisions. Very expensive treatments that can at best only extend my 90 year old father's life a very few years, and which may not work at all or lead to serious deterioration in his quality of life, ar ... view full comment

04/08/2011 - 2:55pm EDT |

Beautifully put, Iowa.

04/08/2011 - 3:08pm EDT |

I have never heard it suggested that anyone should be prohibited from paying for a low expected value treatment. The issue is whether society should do so in the face of other significant claims, including the education of the young, retirement income security, and universal health care. I think not. We should not allow marginal extensions of life for a few to consume so much of the opportunity for those with years ahead of them. We all have only so much time. Modest additional longevity for a few should not be at the expense of the well-being of the many. Our health care bill, particularly heroic end of life care, is now so large that we are at that point. Enough.

Very few people woul ... view full comment

04/08/2011 - 3:14pm EDT |

OK Iowa; I can agree with you - that people themselves and their families should make informed decisions. Very few want to wind up as useless, sick, unwanted. We do want to live as long as possible, as well as possible.

What's wrong with that? We have value. We do affect the future in many positive ways even as we age.

AaronW, you are arrogant. Too many physicians get to thinking they are g*d.

You are not.

04/08/2011 - 3:38pm EDT |

Great dialogue, people; it's so nice to see the REAL Death Panel debate played out. I believe this is where we start looking at solutions to our dilemma and come up with a way for patients to inform friends, family and health care providers of their wishes prior to becoming incapacitated and in need of costly life-saving procedures with uncertain probabilities for positive outcomes.

04/08/2011 - 4:13pm EDT |

Sophia,

Let's be clear. I want only to live as long as I can live well, not as long as I can possibly live. There is a difference. I understand others feel differently. I also understand that one cannot often know when terminal decline sets in, so decisions about when "well" is over and done are fraught. Life is like that, sometimes.

04/08/2011 - 6:36pm EDT |

I'd agree that this has been a good discussion. One that shows all the complexities that are involved with late-term and end-of-life care. Where to draw the line and when to cross over. My thoughts are that, understandably so, most of, if not a majority, of the aging population in America has not had nor intends to have a conversation with their family or their primary care physician about how they want their end of life to be addressed. Too often that discussion and decisions are not know to the family or ignored sometimes out of the grief, anger, and other emotions one goes through when watching a loved one die.

I've watched a grandfather die a slow death brought on by Alzheimer's knowing ... view full comment

04/08/2011 - 6:38pm EDT |

Sigh.

Arrogant? What I am advocating is humility in the face of forces over which I/we have no control.

Your insertion of the asterisk in the Creator's name suggests to me that you may be a believer. As a believer--assuming that you are--consider this: when God puts down His hand to call one of his children home, is it more arrogant and god-usurping to rage against that reality bringing to bear every bit of high technology and medical violence--and intensive care is violent, hence the medical slang "flog" for prolonged ICU care--in a mostly vain attempt to postpone the inevitable or instead to accept that there are things we cannot change and attempt to make a person's passage as peaceful ... view full comment

04/08/2011 - 7:47pm EDT |

AaronW,

I think the use of the word arrogant in reference to your position has to do with what we understood to be your assertion that physicians are the right people to make end of life care DECISIONS, rather than providing information and guidance so that patients and loved ones can do so. It was not in reference to any assumption that you wished to prolong life in hopeless situations.

I would simply say this: technical experts in any field are not really the right folks to determine policy actions, at least not on their own, that stem from their expertise. Informed lay people with an interest in the outcomes are equally and often more important to the decision making process. It absolut ... view full comment

04/09/2011 - 3:30am EDT |

Well, I'll just have to wear the charge of arrogance on those grounds, because I'm not changing my position that patients and their families are in no position to evaluate the choices before them in such circumstances as we have been discussing. It isn't that I think patients are stupid or that they are somehow incapable of grasping the dimensions of the options before them, it's that when the alternative is certain death the human tendency is to overvalue even the slimmest chance of salvation and to underestimate the downsides in terms of money spent and suffering accrued. In individual cases, I submit that doctors are in the best position to make these decisions, though I'm practice they ... view full comment

04/09/2011 - 10:37am EDT |

I am actually comfortable with patients making the decisions. The real problem is family members making the decisions. If i had a dollar for every case where a family member insited on ultimately futile and costly efforts to preserve a semblance of life in their brain dead and never to awaken relative, well, I'd be able to go a long way toward solving the deficit.

There should be a mechanism for a standardized aand easy to understand advanced directive and this should trump in nearly every case the voices of family members who are NOT in the same position as the patient themselves and are often motivated by a variety of factors that have nothing to do with the wellbeing or wishes of the pati ... view full comment

04/09/2011 - 11:05am EDT |

You're right, miceelf. Thank you for calling me out on this. More often than not, it's the family members who push for the "full flog." Trouble is, most people don't write advance directives, and even when they do, they're not enforceable.

04/09/2011 - 11:20am EDT |

"It is unfortunately true that real health care savings will require setting a limit to what care is offered, especially at the end of life. It would be ethically cleaner if such decisions affected rich and poor alike. The Republican Medicare plan will result in economic rationing: the elderly rich will receive better, more expensive care than the elderly poor."

This from a physician commenter after Paul Krugman's most recent column. Just to show that I am not alone in my assessment.

(Though I recognize that this will not answer the charge that all medicos are arrogant pricks.)

04/09/2011 - 1:47pm EDT |

I think we approach at last common ground here. Perhaps what is needed is a new legal basis for medical decision making, based partly on where I started, and partly on miceelf's comments:

- I would continue to insist that as we become older, we ought to bear part or all of the cost of treatments that go beyond basic upkeep and humanitarian needs for patients near the end of life. I see no problem with forcing people to choose between "flogging" Grandad, and paying for Granddaughters college.

- But lets insist that people designate their end of life care expectations in advance directives and medical power of attorney by age 50 or so, and leave decision making firmly in that latter individ ... view full comment

04/09/2011 - 3:58pm EDT |

I agree AaronW. And I have to admit, I may be a little biased, being the recipient of a lot of stories about end of life decisions from my SO.

But I think that advance directives should be enforceable and widespread. A little investment would make them much more accessible and I think quite popular. Many people were truly horrified by the Schiavo case, and advance directives got a bit more popular then. I think a not insubstantial number of people are horrified about the idea of being kept alive and brain-dead, or for that matter, terminally suffering.

04/09/2011 - 7:32pm EDT |

The Lifetime Distribution of Health Care Costs

Berhanu Alemayehu and Kenneth E Warner

Principal Findings

Per capita lifetime expenditure is $316,600, a third higher for females ($361,200) than males ($268,700). Two-fifths of this difference owes to women's longer life expectancy. Nearly one-third of lifetime expenditures is incurred during middle age, and nearly half during the senior years. For survivors to age 85, more than one-third of their lifetime expenditures will accrue in their remaining years.

So, on AVERAGE, old people are going to have to spend over a hundred grand each on health care, some of them much more than that. The need for medical treatment, unlike, say, the nee ... view full comment

04/10/2011 - 10:31pm EDT |

fixed SUM of money--not some of money

04/12/2011 - 12:33am EDT |

"The upshot is, I don't see any way that you can have a functioning market on medical care--by functioning I mean a market that tends to keep prices low--without having a situation where unlucky people who get very sick and need a lot of time in hospital or who come down with illnesses that are unusually expensive to treat fall by the wayside and die without treatment."

Precisely. The market controls cost and consumption with price, but, by definition, that means many people have to choose not to buy whatever it is. So, if we want the market to manage the prices and consumption of medical care, hence the cost, we have to allow willingness and ability to pay to ration care, like it does for ... view full comment

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