CBO on Medicare – “We need a Death Panel”

Bruce Krasting's picture
Doug Elmendorf over at the CBO gave a speech this
morning on Medicare. I think he gave us a window into what is coming.
He outlined a number of measures that would help to put Medicare on
firmer footing.

The federal government will spent north of $1 trillion in 2011 for
health care (7% of total GDP!). Half of that will go to Medicare. That’s
a bad result. But it is nothing compared to what will happen in the
coming decade. The cost of all medical treatment will rise substantially
above Mr. Bernanke’s measurement of inflation and there will be many
more people on the Medicare line due to the rapidly aging population. So
what does Doug suggest?

Cut payments to Medicare providers for services they provide.
There have already been cuts made. But they are temporary. Elmendorf
wants more. This makes sense. Cutting payments to Dr’s, hospitals and
service providers like nursing homes would make a big difference on the
financial side. It would also make a big difference to Granny in that
nursing home. It’s worth noting that Elmendorf doesn’t think this is
likely to happen:

Whether the reductions will be sustained over a long period of time remains to be seen.

Another suggestion is to extend the eligibility schedule for Medicare from 65 to 67.
I am quite certain this will happen. The only question is how soon it
will happen. Some smart fellow will do an analysis on the proposal and
conclude “It will save us X dollars, but Y people will die as a result”. The X in this calculation will be big. The Y will also be big.

This recommendation will strike a dagger at the Administration and all those Dems who supported Obamacare:

Reverse the expansion of Medicaid and the subsidies for purchasing insurance that were enacted in last year’s legislation.

The suggestion is that we will have Universal Health Care “Lite”. It also implies that Obamacare comes up for some redrafting. If they start messing with this it will be the death of it. (Politically this would suit the Republicans and Tea Party set-ergo look for it to happen)

A separate suggestion is to treat employer contributions to health insurance as income and tax it accordingly. This is just a tax increase for workers. It will go over like a lead balloon.
But we need to remember that this concept is already part of the
current law. It was part of the Obamacare stealth tax increases. These
tax increase are scheduled to go into effect in 2018. This could happen
much sooner according to Elmendorf:

Last year’s legislation changed the tax treatment of employer-sponsored health insurance, but only in 2018 and beyond. That provision could be accelerated and strengthened.

The most significant recommendation (to me) is the suggestion that
Medicare will not cover new treatments under some circumstances. This is
the Death Panel concept of rationing health care that everyone has been taking about.

Medicare pays the costs of nearly any medical treatment or procedure
that a doctor recommends. An alternative would be for Medicare to pay only the cost of existing ways of dealing with a specific health problem

I was surprised that Elmendorf made it clear that if someone on Medicare
had the money to pay for the better, newer treatments they could do it.
But they had to shell out of their pocket. In this plan, what happens to those who don’t have that money? Easy, they die or get inferior treatment.

Under such an approach, patients would be able to use their own money to pay for the more-expensive care, but the federal government would not pay more

Elmendorf acknowledges the difficulty in making the choices of which treatments are covered and which are not:

would be an immense challenge to formally classify treatments and
procedures into sets that address the same health problems and to
evaluate whether some treatments and procedures are better for some or
all patients.

Yes Doug, it will be an “immense challenge” to come up with that list. But that list is coming. And again, as a result of the list, some will die.

We have to make hard choices. Ones that will result in suboptimal health
care and yes, premature death. It’s good that the CBO put this on the
table. It’s still not easy to read. Anyone who says that America is such
a wealthy country ought to look at it. We’re not as rich as we’d like to think we are.


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Bruce Krasting's picture

Great comments on this. Tks to all.

I will send this with a recomendation to read what you wrote to Mr. Elmendorf. I think he might read it.


RichardP's picture

Bruce - I wrote you a note in response to your previous comment, towards the bottom of the first page.

JR's picture

Dr. Ron Paul advocated last year that patients and doctors be put back in control of healthcare and introduced a Private Option Health Care Act that would have created a competitive market in health insurance…and would have lowered the prices of prescription drugs by reducing barriers to the importation of FDA-approved pharmaceuticals.

The introduction In the 70s of Health Maintenance Organizations (HMOs), said Rep. Paul, “took far too much control away from patients and physicians and gave it to the insurers.”

Said Paul: “This excessive reliance on third-party payers, said Paul, allowed the problem to snowball. 

But Instead of the PaulPlan, of course, we got ObamaCare.

Writing this past month on Liberty Matters, Brittany Pounders lists the “Top 10 Failures of Obama Care.  Here are excerpts:

“ObamaCare is so broken that the Obama administration has spent the last six months exempting its union friends and large companies from the law.  In this one year, the Obama administration has already issued 1,040 waivers to unions and employers, which thereby exempt 2.6 million people from ObamaCare regulations…

“The main cost of the law’s plan to states is from expanding Medicare (Medicaid) to add 20 million more people to the program.  Medicare accounts for an average of 22% of state budgets.  The Medicare expansion will cost the states $118 billion through 2023.  States are cutting other programs such as education and law enforcement in order to make up for the shortfall in the new federal mandates…

“Today: Some Americans have already had a spike in the cost of their insurance premiums of an astounding 20% to 60%.  Insurance companies have raised premiums in double-digit increases.  For example, Blue Shield of California recently increased some of its individual plans by 59%, saying that 4% of the increase is a direct result of the new health care law."


ObamaCare, of course, is just a new welfare entitlement program. As Jim Newell explains on Gawker April 1, because of the population increases for Hispanics and the overwhelming Democrat voting patterns of non-whites, Barack Obama Can Just Ignore White Voters Now.”

Heroic Couplet's picture

Ron Paul, who's gonna do the Federal Reserve in until they no longer exist? That Ron Paul? I was just thinking it would be interesting to hear his views on medical care, so thanks. Now he has two failures on his list :D.

Patients and their families are all over the Internet, reading WebMD, PubMed, Medline, and clinical trials dot gov, going to chat rooms, joing support groups, and somehow, the Republicans think they're going to willingly accept substandard care. REALLY? Sounds like substandard care would lead to a malpractice suit in a minute. More money for trial lawyers! Republicans better get back to the drawing board on this one. Tax cuts are still in place, folks, and they no longer work to create US jobs. Republicans don't have a lot of credibility left to practice medicine without a license.

Redstone's picture

"Latino children make up more than half of the public school students in California. They account for more than two of every three students in Monterey County public schools (the county for Carmel-by-the-Sea, Monterey…). How to educate these young Americans--many of whom don’t speak English as their first language--remains a hotly debated topic at local, state and national levels." -- The Monterey Herald, April 3, 2011

Governor Brown did not need the Republicans to get elected in a heavily union/Hispanic state, promising miracle solutions to one of America’s state budget deficits. But the weeks roll by since Brown has been in office and the deficits go deeper and what does Brown need now for his miracle? Republicans! Turns out that Brown’s promises can’t be met without voter approval of tax extensions and tax increases and so now he's campaigning the Republican districts to vote him the money to make his miracle.

Perhaps your jests about Ron Paul are premature as Obama’s miracle may also depend on Republican money.

Heroic Couplet's picture

Ron Paul, who's gonna do the Federal Reserve in until they no longer exist? That Ron Paul? I was just thinking it would be interesting to hear his views on medical care, so thanks. Now he has two failures on his list :D.

Patients and their families are all over the Internet, reading WebMD, PubMed, Medline, and clinical trials dot gov, going to chat rooms, joing support groups, and somehow, the Republicans think they're going to willingly accept substandard care. REALLY? Sounds like substandard care would lead to a malpractice suit in a minute. More money for trial lawyers! Republicans better get back to the drawing board on this one. Tax cuts are still in place, folks, and they no longer work to create US jobs. Republicans don't have a lot of credibility left to practice medicine without a license.

FunkyOldGeezer's picture

Playful answer: Pay the medical profession  less and deny passports to 'em. Where are they going to find better paid jobs than in the USA? Not many places. Government have most of them over a barrel and don't realise it.

But seriously, the medical profession and the pharmaceutical companies are the leeches, NOT the old and suffering. Let 'em take a haircut! They'll still have plenty left.

RichardP's picture

Doctors get paid only what the health insurance company says they can be paid.  That has been true for quite some time now.  Tell me how that allows for leeching??

Insurance companies exist to make money.  They do that by charging the patients and then passing on only part of that payment to the doctors.  If there is room to give the physicians a haircut, the insurance companies would have already done that - in their pursuit of higher profit.

You are woefully underinformed.

Heroic Couplet's picture

"Currently, Medicare pays the costs of nearly any medical treatment or procedure that a doctor recommends. An alternative would be for Medicare to pay only the cost of existing ways of dealing with a specific health problem"

These two sentences had to be written by a policy wonk, because they say exactly the same thing. The treatment a doctor recommends is usually standard of care. "existing ways of dealing" is also standard of care.

I think there's an FDA only approved treatment in here somewhere, and any off-label use of any treatment is, um, subjected to scrutiny, if something goes wrong. I won't spell out malpractice, that old debbil Republicans were going to fix but didn't when they had complete control of DC from 2000-2006.

It's all well and good to sit and write stuff from inside the Beltway. Out in the hinterlands, there was a drug coupla years ago that was fasttracked through the FDA approval process because families and health care givers piled on to get it through the drug approval process. What's on paper in DC is one thing; what's going on on the wards is quite another.


RichardP's picture

Currently, Medicare pays the costs of nearly any medical treatment or procedure that a doctor recommends.

That statement is true only because of this.  Medicare makes it clear what it will not pay for.  And the circumstances under which it will pay for some of what it pays for.  And then, just to be disarmingly coy, refuses to pay this time for something it paid for last time.

Doctors are in business to make money.  You can be certain that any medical treatment or procedure recommended to a Medicare patient is something the doctor understands that Medicare will pay for.  In this way, the doctor makes the quoted statment become true.

In addition, the doctor must have the patient sign an Advance Beneficiary Notice (ABN).  By signing this form, the patient promises to pay for whatever Medicare will not pay for.  Since the doctor is in business to make money, he will not be recommending many treatments or procedures he knows Medicare won't pay for - if he knows that the patient cannot pay for them.  In this way, again, the doctor makes the quoted statement become true.


Bob Sacamano's picture

I prefer the doctor suggest non-existing ways to deal with my health problems.

whatz that smell's picture

We have to make hard choices. Ones that will result in suboptimal health care and yes, premature death. It’s good that the CBO put this on the table. It’s still not easy to read. Anyone who says that America is such a wealthy country ought to look at it. We’re not as rich as we’d like to think we are.

kill the weak. kill em dead. you are all a bunch of kunts, period. stupid queer helpless and so evil you can't compute if you fall for this banker shit.

god help us.

Stuck on Zero's picture

The Free Market System handled all of this very well. You saved for your medical expenses, bought insurance or took the risk. 

moneymutt's picture

I often read all the comments on a ZH piece, I read fast granted but I like reading comments as much as articles, I self-edit some strings that go off topic...but I still claim some of the best things I have ever learned were from comments on a blog, not just the blog article themselves...I really like comments where the author engages some of the commenters like Bruce does, Reggie does sometimes etc..

Yeah, there is a lot of drivel and emotional or partisan crap but to me good comments are like crowd sourcing a debate between author and other view points, often comments can reveal a devastating hole in the article's logic or further reinforced with more info/facts/analysis.

Bruce Krasting's picture

Totally agree. It's why I do this.

RichardP's picture

So - take the next step and research the issue of mandated Electronic Health Records systems.  Then write an article about it.  I'm guessing that mandate is either going to be shouted out of existance, or it will drive doctors out of business.  The IT world is the next group that is going to hold doctors hostage.  CMS mandates that the doctors have to use these things to get paid.  The vendors won't sell you a system unless you agree to yearly service fees that that they can increase at will.  Once you have paid $75,000 for their system, how are you not going to pay what they demand.  You can't use their system without their help - because you are a physician, not a computer nerd.  Plus, the doctors will see fewer patients because it is slower to use these systems than to use paper charts.  So doctor's incomes will go down because of fewer patients.  Nobody is talking about this, and it's going to be a killer.

Bruce Krasting's picture

Tks RP. I will take a look. This stuff kills me. "We" do things to make things better, they end up worse....

max2205's picture

Most of the problem are Drs who don't know anything except pushing pills that don't help. Talk about public workers. Most of these folks would disappear if there was a minuscule of competion

anony's picture

No doubt every conceivable aspect, from the most miniscule to the most forwardly looking awesome thinking and solution has been made manifest in the 450 comments today. There is nothing that I can add, nor would likely anyone want me to.

However it strikes me that when there are more than a couple dozen comments, the same goal could be achieved and NO ONE reads all the comments anyway. 

These long strings become eventually just mental masturbation, writ large.


mynhair's picture

How do I get on these Death Panels?


"You're a Lib, reap what you sow.  End of the line, please."

ZackAttack's picture

I think there is a market opportunity here for the Wal-Mart of healthcare clinics.  

Hire a bunch of H1B visa doctors. They won't be AMA board certified because they didn't do their residency here.

Publish a fixed-price menu of services via ICD-9 code. No insurance. All cash, no questions.

RichardP's picture

There are a number of companies that are doing something similar to this, although I can't bring to mind any names at the moment.  Some of them are operating through drug stores.

the grateful unemployed's picture

who wins. Friend X is 75, retired federal goverment worker. Diabetic. Needs a heart bypass. They give him one, then shove him out the door the next day. He has a massive stroke, (yes diabetics are eleveted risk for post heart surgery strokes like this) lands in a nursing home. His government worker health insurance doesn't cover his nursing care. He is permanently disabled at 75, and has to go on state aid. The state applies a lien on his half of their estate, his and his wife's, married some 40 years. She is suddenly in penury, the government runs her stock portfolio, (or rather a broker does). They keep her fully invested in 2008.

He lives for ten years after the stroke, she is too polite to sue the doctors, for at least a share of the nursing care costs. Obviously he was in pretty good health, to live ten years after a major stroke, so they deserve the blame. Her retirement resources are now locked up, no kids. The nursing home costs the state paid were anywhere between 3 and 4k a month for ten years. There were also some surgeries, yes you can still require other medical problems while you are laying there immobile. Everyday he was in the rest home, she visited him. 

All because they shoved him out of the hospital a day too early, and failed to treat him quickly enough when he had the stroke. This is the insurance run health system, any questions.


Bob Sacamano's picture

Sue the doctors is a widely supported approach.  Seems to be helping a lot.

Who should pay for the health services of a 75 year old?   Me?  I'm figuring I should pay for my own and if I can't, then it is just one more thing I would like to buy that I can't and/or won't. 

Why didn't you provide financial assistance to your friend if you are so grieved about this?  Where is your friend's family / relatives in all of this??  Why should the taxpayers foot this bill?

the grateful unemployed's picture

X's brother is very well off, but as he told X's wife, if he were to pay for X's care, that would help the state, not X. X would get the same care either way. His healthcare should have covered this, WW2 vet, decades of civil service when it wasn't a lucrative as it is now. The recourse was litigation, and of course that would also send a message to the hospital and provide them with some feedback, rather than letting them sweep this good man under the rug. my question seriously, is how can you be a doctor under these circumstances? it must be like being a doctor for the third reich.

RichardP's picture

You are focusing on things the author did not focus on.  His point was that short-sighted cost-cutting (out the door in one day) created a much larger expense that could have been avoided.  Basically, penny-wise, pound-foolish.  A valid point.

Unfortunately - for health care plans as well as nuclear facilities - the ones who think through and design the system are the geniuses.  The ones who actually manage the systems and run things are those at the lower end of the pay scale.  When the unplanned-for happens, the minds of those who run the system aren't nearly so nimble as the minds of those who designed the systems, and who are nowhere around.

moneymutt's picture

in universal care countries, no one loses their life savings or investments over a chronic disability...but they also might not get same amount of expensive care

Kassandra's picture

This is too damn typical...and a huge tragedy.

gwar5's picture

Of course the death panels are real, always were ---- and it's a two-fer for GovCo.com.

GovCo.com gets to save money by denying baby boomers antibiotics when they start going septic and they get to confiscate their estates the sooner they can make them croak.  GovCo.com now has a vested interest in seeing anyone who is government dependent die.

GovCo.com can stay in power and get re-elected promising to transfer the Boomer assets to the younger generation who will be made to resent their elders for entitlement spending on them. You can already begin to see it happening now with the political appeals targeted to the young generation. Socialist democrats are shifting away from the elderly to the young and hispanic, newly dependent who compete for the same dollars.

The final solution after decades of the socialist democrat lies and big spending (you know, the ones who say they're the ones who really care?) is government forced euthanasia on the population to solve their fake entitlement promises. Irony: supposedly they've been pre-paid over the lifetime of our "Greatest Generation".

moneymutt's picture

From my very limited interaction with some old aunts, I'm constantly amazed at how much health care these mid 70s women need and get. Not that I'm against it per se, but they generally get some pretty damn good, very exspensive care. For someone that has huge deductibles and $25 copays for routine doctor visits, even additional $25 copay for lab tests done on same day as doctor visit, and copays for pharmacueticals, and with 80/20 cost share on some things, I and most people my age freak out financially about having ourselves and any of our family in the having to routinely visit the doctor or heaven forbid the hopsital for more than a day and yet these women are in and out of hospital, rehab, get county workers to come to their home so they won't end up in nursing home etc. I get that old people need more care, but it strikes that this level of care is once in a generation freak thing that they get...all the modern technology with none cost constraints that are no doubt coming. The only thing they get worse than maybe 25-30 years ago is there is slim labor to wait on them...the nurses, aids are spread very thin...years ago technology may have been less, but they had people handy to help.

I doubt when I am 75 I will be able to get a nice electronic scooter to zip around in I see on all the cable commercials.

It seems to me that the only way, short of dedicating 50 percent of our GDP to health cares, to practically provide effective care to people in the future is to make tough cost benefit analyses, require people to have living wills (don't require certain results but having a living will takes burden off most of family that are reluctant to deny any care at any time by seeing it was their family members wish that they do so).

It seems the Vet hospitals are now doing a fairly good job at balancing things that matter in outcomes. Like you may not get a private room but you will get care that makes you healthy.

Is what this claim that Ezra Klein makes true?,

"...  I've looked at this dozens of times, and I still find it startling: If we spent what high-performing, fully universal systems like France and Germany spend, we'd have no budget deficit."


Vendetta's picture

Your hoveround will be delivered at no cost to you ... but cost medicare $5k. Amazingly, the actual cost of manufacture is likely less than 20% of the cost.   About the same as a decent Yamaha quadrunner.  Tidy 80% profit huh?  Somehow a battery and a DC motor mounted on chair competes with 350 cc's in an offroad fun machine. How's that for a profitable scam?

That month supply of blue pills that the healthcare feeds you costs $600/mth, the red pill costs less than 1/10 of that and actually works.  If your life depends on it, the blue pill costs go much higher ...

Bruce Krasting's picture

What do you suppose is the advertising bill on the fucking Scooter Store??

It's a waste. It's right in front of our eyes every night.

ZackAttack's picture

Lotta fat in many medical devices. An Igloo ice cooler (they don't even bother to peel off the sticker) and a pump that connects to a velcro sleeve for your arm or leg is $600. If it cost $10 to build, it'd shock me.

One easy piece of low-hanging cost-savings  is to take at least one good idea from the Canadian healthcare system and force pharma and generic manufacturers to bid on a per-pill basis for the Medicare prescription drug program.

DNB-sore's picture

is this based upon 2ww knowledge or did things improve in the last 60+ years

petridish's picture


There are 78 million baby boomers, one quarter of the population. These are the most voracious health care consumers on the planet.

They can't pay the freight, yet drugging and treating them is the only way the "healthcare" industry retains its oversized piece of the financial pie.  With the unenemployment/underemployment rate as high as it is with no end in sight, the employer-provided "health" insurance model is DOA.

As it is with the military "industry" and the financial "services" industry, the medical "industry" will keep its hand firmly in the taxpayer's pocket until the taxpayer completely gives up the ghost because there's no one else who can afford to feed it and keep it in the manner to which it has become accustomed.

Medicare as we know it isn't going anywhere--the medical establishment will not permit it. 

ebworthen's picture


Pay Doctors what we pay teachers and cops.

Pay big pharma the cost of a loaf of bread, gallon of milk, and a dozen eggs.

Remove Lawyers from the equation completely; if a doctor screws up take away their license for two years.

Problem solved.


ZackAttack's picture

I would also say, spend 5 years devoting the entire H1B visa quota to healthcare workers.

What I saw ten years ago, a doctor with his MD from the University of Moscow was making $30/month. I believe that guy is more than competent to diagnose a flu or set a broken bone.

It's unfortunate that the AMA requires them to have done their residency in the US, specifically to defeat measures like this.

ebworthen's picture


The AMA is like the American Bar Association or Guilds of old - paying the tithe is what matters most.

MrBoompi's picture

As long as doctors, hospitals, pharmaceutical companies, and insurance companies can make a fortune for providing monopolistic healthcare services, we will NEVER reduce our costs.

The only option is choosing not to seek treatment at all, or dying. Either of which is preferable to people who just can't bring themselves to say some of our citizens profit off of the death and misery of others.

Single-payer is socialism. Not being able to afford healthcare or insurance is freedom, even if that means you die.

StychoKiller's picture

In ancient China, you paid the Doctor as long as you were well.  When you contracted an illness, the Doctor paid until you got well again.

AmCockerSpaniel's picture

I'm looking at the big 7, 0, and know I have to move on so others can use the resources (I do have grand kids, and love them).  But I don't want to suffer any pain along the way. But the powers to be (lawyers) are scaring everyone who might abide by wishes. I say to each his own on this. Don't spend alot of money on me, but if they don't, then no one makes a dime on me. From what I see it's keep Bob going, and what ever one does; Don't let any pain killers speed up things. Oh; I'm in good health now.

RichardP's picture

While you are in good health, create a living will.  This will set forth your goals and wishes.  You can find examples of these to guide you by Googling on "Living Will".


Next, create a Durable Power of Attorney for Health Care.  Pay a paralegal for 30 minutes work to tell you what your State laws are for what must be in these.  State that the Power of Attorney becomes effective when two doctors put in writing that you are incapable of making sound medical decisions on your own.  The person named in this instrument will be charged with carrying out the instructions in your living will.  See especially the Types of powers of attorney at this link.


You don't need a lawyer to write instructions for your doctors about your wishes.  But you do need someone who knows your State law to verify that what you create is considered legal and binding by your State.  Then go kick the can down the road and enjoy your grandkids.

Kassandra's picture

I don't know where you live but some states have a POLST (physicians order for life sustaining treatment) form you and your doctor fill out. Then you should designate a personal care representative. There is also a DNR (do not resusitate) form that will have to be posted somewhere if you get in bad shape. If you are in too bad a shape your PCR can take care of that for you. Talk to your doctor about it, lawyers will just confuse the issue.

Kassandra's picture

An Advance Directive can be used instead of a POLST.

aerial view's picture

Every American should have the exact same health care program as our politicians in Washington; are these not the same leaders who have made ANY type of discrimination ILLEGAL in this country?! 

RichardP's picture

Why?  Their health care is part of their payment package for doing that job.  Different job, different payment package.  Congress decrees only that certain types of discrimination are illegal, not all types.  If all discrimination were illegal, you would never be able to make a choice.  All choices involve discriminating in favor of one over all others.

Vinz Klortho's picture

"Let's now hear from all the ugly partisans bashing Sarah Palin for her astute observation on death panels she made when Obamacare was legislated with absolutely no transparency."


When Sarah brings her vote-buying fanbang to my home state, she will have my vote for sure-you-betcha!


gaoptimize's picture

Bottle of ~500mg Saw Palmeto pills from Swanson: $2

16oz Bottle of Bragg's Apple Cider Vinegar: $4 (but always tastes horrible ;)

Prostate health into old age: Priceless