Current Events > oh man I asked Matt Bruenig to clarify his M4A analysis on twitter

(+) Yeah! (+)

https://www.peoplespolicyproject.org/2018/08/15/provider-payments-only-fall-by-10-6-in-mercatus-study/

he keeps talking about overall payment rates only falling 10.6% over the 10 year period here:

In order to figure out what the real number is (more or less), what I did was go into Table 2 and start with the line that says currently projected personal healthcare spending. This line represents total national health expenditures minus expenditures for research, structures, equipment, and insurance administrative costs. Put differently, this line roughly represents payments to providers and payments to drug companies.

The report says prescription drugs account for only 10 percent of total national health expenditures. So I take 10 percent of the line in Table 2 that says currently projected national health expenditures in order to get a dollar value for drug expenditures.

I then take that value for drug expenditures and subtract it from the currently projected personal healthcare spending. The resulting figure should be equal to currently projected provider payments. I add on to that the estimated increase in utilization provided in Table 2 to get the provider payment level that would obtain under Medicare-for-All without any provider payment cuts.

From there, I go to the line in Table 2 that says Applying Medicare payment rates, which tells you how much lower provider payments will be under Sanderss plan. I then take that value and divide it by the provider payment level arrived at in the prior paragraph. The result: under Sanderss plan, provider payments go down by 10.6 percent between 2022-2031.

One way to double check if this figure makes sense is to see if it more or less lines up with Medicare reimbursement rates. Since Medicare-for-All sets all reimbursement rates at the current Medicare rates, then the provider cuts should basically be equal to however much below cost Medicare reimbursements are set. Thankfully, Blahous provides this figure on page 11: For example, in 2014, hospitals were reimbursed just 89 percent of their costs of treating Medicare patients. If Medicare reimbursements are set at 89 percent of costs, then that suggests Medicare-for-All will cut provider payment rates by 11 percent, which is virtually identical to my 10.6 percent figure.

However I don't think this analysis gets you what the payment rates would be, just the overall level of payments to providers based on Medicare for All rates which is a different measurement.

I specifically noted that, for instance, hearing, dental, and vision are not covered currently under many plans, so even though on an overall numeric level you can do the math and show '+10% spending based on induced demand' and another line that says '-10% spending from reduced payment rates' you're not actually making an apples to apples comparison for the rate of reimbursement those types of providers would see

I could be wrong, but I hope I don't look stupid.
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