Thursday, October 06, 2011

Medicare cuts will be a very hard sell, especially in provider operating margins

Look at this –no, I'm not talking about a pitcher's hitting a homer on -- I'm pointing to  Richard Wolf’s tome on Tuesday in USA Today, “Five Ways to Squeeze Medicare,” link here.  

Targeting the “rich” was tried before, in 1989, when there was an attempt to provide catastrophic health care “at their expense”, and this sparked a rebellion, leading to repeal.

More interesting is reducing provider profit margins. But since the late 1980s, “K Street” has nurtured a cottage industry of consulting firms that help provider associations maximize their Medicare operating margins.  I know this because I worked for one of them, Lewin (now very successful) in 1989.

Rooting out waste and inefficiency should be a no-brainer. But the hard part is going to be to stop over-treating seniors. I know that was the case with my own mother, who passed away at 97 in December 2010. 

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