Wednesday, January 2, 2013

The Good, the Bad, the Ugly, and the Really, Really Ugly

Are you uncorking the champagne to toast Washington for not going over the fiscal cliff?  I didn’t think so . . . me neither.

How could anyone toast a Congress that took the country (again) to the brink of economic chaos?  Who waited until the 11th hour (literally) to clear a bill that prevents huge tax increases on just about everyone and huge cuts in just about everything?  That wasn’t able to assure Medicare patients and their physicians  that there wouldn’t be a 27 percent cut in payments the very next day?  That waited until 11 p.m. on January 1 to come to an agreement, even though it has known for more than a decade that the Bush tax cuts would expire after 10 years, has known for more than a year that across-the-board budget sequestration cuts would automatically go into effect and that Medicare physician payments would be cut by nearly 30 percent on the first of the year, and that has known since at least 2002 that the Medicare SGR formula is fundamentally unworkable and need to go? That in the end, could only agree to prevent the SGR cuts for another year, but with no plan or timetable to advance a permanent solution?  (Read what ACP had to say about the fiscal cliff deal and the lack of an SGR solution).

Sure, there is (some) good in the fiscal cliff deal, some that is bad, and a lot that is ugly, really ugly, especially when it comes to the sad state of policy discourse and decision-making in the United States.  Let’s run it down.

The good:  Congress didn’t take us into another recession by allowing the country to go over the fiscal cliff.  Medicare payments to doctors won’t be cut by nearly 30 percent.  Most Americans won’t see their federal income taxes go up, except for higher income individuals and families.   Defense and domestic programs won’t be cut across-the-board—yet.   Congress rejected a proposal to cancel  an increase in Medicaid payments to primary care physicians (went into effect yesterday) to offset the cost of preventing the Medicare physician payment cut. 

The bad:  The one-year extension of current Medicare rates to physicians was a repeat of the same old, enact a temporary patch now to stop the immediate cut and put off until later a permanent solution, failed approach to the Medicare SGR Congress has taken every year since 2003.  This was the best they could do? Even though ACP offered Congress an achievable and realistic framework  to repeal the SGR and move to better payment framework? Even though organized medicine collectively offered Congress a similar set of payment reform principles?   Also bad: Congress also couldn’t come to an agreement on an alternative to across-the-board budget sequestration cuts, deciding instead only to postpone them until March 1. 

The ugly:  Congress did nothing to address the rising costs of health care, except for further ratcheting down Medicare payments to hospitals, ambulances, Medicare Advantage plans, and physicians who provide imaging services.  The plan it passed does not make a meaningful contribution to reducing the federal budget deficit, although it will bring in somewhat more tax revenue (from higher income persons) than if the Bush tax cuts were renewed in their entirety.  Congress and President Obama again missed an opportunity to agree on a Grand Bargain to increase revenue, reform the tax code, and reduce spending on entitlement programs, although they reportedly weren’t that far apart on the numbers.  

The really, really ugly: The political process—and the flawed outcome it produced—was so embarrassing and unworthy of a great country that it led National Journal writer Ron Fournier to ask “Can we fire Washington over the fiscal cliff fiasco?”   He  writes that “the ‘fiscal cliff’ process was secretive and sloppy, and the nation’s so-called leadership lacked the political courage to address our root problems: joblessness and debt. Instead, the White House and congressional leaders set the stage for another maddening confrontation two months from now, when the nation’s credit will be held hostage again to Washington’s incompetence.”   It was so ugly that the Speaker of the House of Representative, John Boehner, reportedly gave the finger and issued the F-bomb  to Senate Majority Leader Harry Reid!

And that is the really, really ugly thing to think about.   Less than two months from now, the across-the-board sequestration cuts go into effect, unless Congress and the President can agree on an alternative.  Just two months from now, Congress will need to enact legislation to authorize the Treasury department to borrow more money to honor existing obligations (the debt ceiling), and Republicans already are saying that they will demand more spending cuts in exchange while President Obama says he won’t negotiate with them on it, not this time, not again.  Remember, it was the debt ceiling debacle of the summer of 2011 that led to the failed “Super Committee” and the across-the-board sequestration cuts that were delayed for two months, but not canceled, by the new law.  The consequences of defaulting on the country’s debt obligations would be far more serious and detrimental to the U.S. economy than going over the fiscal cliff.  And that’s not all: a temporary measure to fund the federal government expires at the end of March, leading to the prospect of another tussle over spending and the possibility of a government shut-down.  
Good bye and good riddance to the 112th Congress, arguably the worst since members of Congress were caning each other before the Civil War!

Personally, I have been involved in observing and influencing government for more than three decades now, and I have never seen Washington so polarized, never seen supposedly responsible people in Congress being willing to gamble (again and again) with the country’s economic health to make an ideological point, never seen so many who think compromise is a dirty word, and never seen a Congress so unable to pass legislation until the clock has run out and the wolf is at the door. 
The deal that was passed was better than the alternative of going over the cliff, but the politics that has produced it was so divided and so dysfunctional and so ugly that maybe the best we can hope is that it can’t get any worse—or can it?

Today’s question: What do you think of the fiscal cliff legislation and what it says about our country’s capacity to govern?


DrJHO7 said...

What do you think of the fiscal cliff legislation and what it says about our country’s capacity to govern?
Our dysfunctional government is a reflection of our dysfunctional health care system, and vice versa.
The lack of courage on the part of the members of congress to turn from partisan interests and to do the right thing for their constituents is intolerable.
The only time we can hold them accountable is on election day, and many of them can evade accountability based on the way our election system works.
Meanwhile, private medical practice for internists continues to slowly erode as mcr reimbursement remains flat, in the face of ever rising expenses, especially for smaller medical practices. This does not bode well for our medical care delivery system.

Steve Lucas said...

I tend to see things a little differently in that I believe we will see a recession due to the upcoming debt ceiling negotiations. Our debt rating will be lowered and with the slightest increase in this rate our debt servicing ability will become the driver in our economy.

There is also the issue of a whole group of taxes and fees that will start to be paid this year that will slow the economy and leave all of us wondering what we owe the government.

I also did not see any spending cuts. One of the worse issues in the last two days was the Sandy relief bill that contained so much pork it had to be postponed. These people have no shame.

The whole concept that we vote for a bill one day and not another because technically it is a tax cut and not a tax increase all the while people are left hanging is lunacy.

One of the principles of one of the debt commissions stated that ultimately politics does not matter; it comes down to the math. This appears to escape those in Congress.

This is a mess that will not be solved by us on the outside since ego and fund raising have replaced common sense in the political process.

Steve Lucas

Jay Larson MD said...

It is this dysfunctionality that helped me to decide to stop seeing Medicare and Medicaid patients altogether this year. The Feds have been playing a game of chicken with physicians for the past decade. For the past decade they have done very little to bolster primary care. Even with a 10% increase in primary care payments, Medicare payments are not enough to cover office expenses. Once a practice has too many Medicare patients it can no longer be viable. With SGR, Meaningful use 2, ICD-10, quality reporting on top of increased documentation requirements for DME, and now RAC audits of E and M codes, it just pushed me over the edge. Stay with it for a couple of years, burn out and quit practice or stop seeing Medicare and Medicaid patients and extend the practice for another decade. What a bad situation. I would say that Medicare is a leading cause for why outpatient general internal medicine as become a profession heading towards extinction. In Montana a private practice internist is rare. Most are hospital employed. Thank you provider based billing. So long as Congress remains this dysfunctional there will be little done to salvage primary care and with its decline health care costs will continue to spiral out of control.

Harrison said...

As far as I can tell the biggest difference between the two parties lies in the size of government and in the size of the debt that is funding government.
The GOP first set out to reduce taxes because that would result in less money for the government and so a smaller government.
That didn't really work.
So the result was that the federal debt and the annual deficit grew.

Now the GOP still wants a smaller government.
They do not see a role for the government in helping the economy and only see the government as harmful to the economy.

The Democrats however do not find the size of government to be as much of a problem and do see the federal government as playing a role in our important role.

The Democrat's position right now is grounded more in reality.
The debt and the deficit are not evidence based problems for our economy for now.
US treasury bonds are being sold at historically low interest rates. And the market for them remains hot.
We do not have a hard time finding money on the financial markets.
People with money are very interested in investing in our economy.

We on the other and need money to stimulate our economy.
We need to put money into the hands of people who will start businesses, and buy things, and invest in our future.
We need to invest in our infrastructure.

We absolutely need to change where our money that we are borrowing is going.
Health care spending on 80 year olds and 90 year olds is probably not a great long term investment into the future of our economy.
Although that money is used by a very productive and active sector of our economy and so choking it off is something that needs to be done with care.

I am afraid of the unbending positions of our leaders.
Speaker Boehner accepted the position of Speaker of the House for the 113th Congress by stating that our national debt is going to cripple us.
That is a fine belief to have, but there isn't evidence to support it right now.

We could use an evidence based approach to government.
And I believe that the Democrats are in control of the facts and the reality of the world right now.

The Republicans are kowtowing to a fringe group that is bewildered still that the polls last November were right.