This is from the Center for Medicare Services's report on the Reid Bill:
The PPACA would introduce permanent annual productivity adjustments to price updates for most providers (such as hospitals, skilled nursing
facilities, and home health agencies), using a 10-year moving average of economy-wide productivity gains. While such payment update reductions would provide a strong incentive for providers to maximize efficiency, it is doubtful that many could improve their own productivity to the degree achieved by the economy at large. 7 Over time, a sustained reduction in payment updates, based on productivity expectations that are difficult to attain, would cause Medicare payment rates to grow more slowly than, and in a way that was unrelated to, the providers’ costs of furnishing services to beneficiaries. Thus, providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 20 percent of Part A providers would become unprofitable within the 10-year projection period as a result of the productivity adjustments.
Making Medicare providers unprofitable, that doesn't affect the people who use Medicare? You're not worried those providers would shut down?
That report is worded fragily, they're being careful not to step to hard on political land mines since they live in a city like Washington, D.C.. But, again and again, they make statements like this:
As noted in the section on Medicare estimates, reductions in payment updates to health care providers, based on economy-wide productivity gains, are unlikely to be sustainable on a permanent annual basis. If these reductions were to prove unworkable within the 10-year period 2010-2019 (as appears probable for significant numbers of hospitals, skilled nursing facilities, and home health agencies), then the actual Medicare savings from these provisions would be less than shown in this memorandum.
Now, for this trillion dollar bill, they're planning on paying for about half of it with cutting Medicare. And, the guy who runs Medicare is telling you that the cuts are "unlikely" for "significant numbers of hospitals, etc.". You're not starting to get the picture, just based on these two quotes, that the cuts in the Medicare bill just aren't possible? And so, this bill is going to cost a lot more than all the political rhetoric we're hearing?
Given the detailed, thorough, and well backed comment you've posted, you seem like the kind of guy who doesn't just run around blabbing whatever some politician has said on television. So, I imagine you'd appreciate a link, so you can read the whole report for yourself:
http://www.cms.hhs.gov/ActuarialStudies/Downloads/S_PPACA_2009-12-10.pdf">Click
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