How Bobby Jindal and Newt Gingrich Would Save Medicare

Posted on by John C. Goodman
  • Make payments site neutral – same fee, regardless of where the service is performed (hospital, out-patient clinic, doctor’s office, etc.)
  • End Medicare’s bad-debt compensation program that reimburses hospitals for 65% of uncollected patient out-of-pocket costs.
  • Get serious about tackling fraud.
  • Recognize preventive medicine as a money saver rather than a money spender.

Wall Street Journal

6 thoughts on “How Bobby Jindal and Newt Gingrich Would Save Medicare”

  1. The Wall Street Journal is gated, so I cannot read the source article…..but here is a quick impression of these proposals:

    1. Site payment reform is estimated to save $27 billion a year
    2. Bad debt compensation is about $8 billion a year

    These are small potatoes to reform a Medicare program that will soon cost $1 trillion a year.

    Fraud prevention would be a big deal; I am curious if Jindal and Gingrich support the large increase in Federal personnel that this would require.

    Reply

    1. Tackling Fraud is simple. You don’t pay and chase; rather you use algorithm to predict fraud and investigate. Also, economics posits that you continue to invest $1 in fraud detection until you get only $1 back in return. Then you know you’ve maximized fraud detection.

  2. The bad-debt compensation program in Medicare gives money to hospitals if a senior citizen cannot pay some part of their hospital bill. (Last I checked, all admissions under Part A have a $1400 deductible.)

    A wealthier senior citizen will buy a Medicare supplement plan, and part or all of that deductible will be covered. The seniors who owe money are largely those who are too poor to afford a supplement.

    If Jindal and Gingrich want to close off this assistance, I think the result will be hospitals going after poor seniors with collection agencies.

    Is this what the Republican reformers actually want? It seems like a pathetic way to save $8 billion a year unless I have really missed something.

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  3. I agree with the first three items, but I’m skeptical of the fourth item. There has been nothing in the medical literature to suggest that preventive medicine pays for itself. On a personal level it can be a desirable expenditure, but I suspect the value falls quickly when third parties begin to fund it. Some other good ideas are competitive bidding, reference pricing, and bundled prices.

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  4. I strongly agree with Devon and his skepticism about ‘prevention.’ Especially among the very old–their bodies are going to fail in some way no matter how much prevention you do. At a certain point of deterioration, ‘prevention’ is very expensive.

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  5. And let me pile on a little, too.

    Medicare Advantage plans get more money when they find more illnesses in their insureds.
    They have been paying nurses to make more home visits, so as to establish more sickness codes. Prevention is indirectly adding to the budgetary cost of Medicare.

    Health Affairs had a long article about this. Jindal and Gingrich are either cynical or hopelessly naive on this issue.

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