Grading PolitiFact: Debbie Wasserman Schultz, Medicare solvency & kid gloves

Context matters -- We examine the claim in the full context, the comments made before and after it, the question that prompted it, and the point the person was trying to make.
--Principles of PolitiFact and the Truth-O-Meter

The issue:

(clipped from PolitiFact.com)

The fact checkers:

Angie Drobnic Holan:  writer, researcher
John Bartosek:  editor

Analysis:

"To assess the truth for a numbers claim," wrote PolitiFact editor Bill Adair back in 2008, "the biggest factor is the underlying message."

Adair's fact-checking guideline accords with Adair's "Principles of PolitiFact and the Truth-O-Meter," where he emphasizes the importance of looking at statements according to the underlying message.

Newly crowned DNC chair Debbie Wasserman Schultz made a numbers claim.  PolitiFact fact-checked it.  And we will examine whether PolitiFact made a serious effort to tease out the truth of the underlying message.

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PolitiFact:

"It's the pot calling the kettle black when it comes to who's engaging in Medi-scare," said Wasserman Schultz in an interview on MSNBC on May 25. "The Republicans leading up to the 2010 election actually fabricated what Democrats did to Medicare. In fact, we added 12 years of solvency to Medicare and ensured that it would be better for seniors overall. And what the Republicans have done under Paul Ryan's plan is actually end Medicare as we know it, turn into it into a voucher program. There's no running from that."

Adding solvency?   Add to that making Medicare "better for seniors overall" and we seem to have an underlying message suggesting the PPACA improved Medicare.

PolitiFact found a document from the Medicare Board of Trustees that initially appeared to support Wasserman Schultz's claim of adding 12 years of solvency, solvency meaning that Medicare income (clarification:  plus assets) pays 100 percent of Medicare bills on a yearly basis.

On the other hand, PolitiFact also located a more recent report from the same Medicare Board of Trustees recalculating the extension of solvency down to eight years.  Both reports contained very similar warnings from Medicare's chief actuary, Richard Foster.  Foster's objections received a one-sentence mention in the following paragraph in PolitiFact's story: (bold emphasis added):

We should note those estimates come with a few warnings. The report itself says that projecting health care costs into the future includes many uncertainties. Additionally, the report doesn’t include changes that Congress will likely make to current law, especially the predictable increases in payments to physicians known as the doc fix. Also, the independent chief actuary for Medicare questioned whether the projected cost savings were realistic.

Saying Foster "questioned" the saving is one way to put it, and arguably softens the blow with ambiguous rhetoric.  Here's how Foster said it (Foster's recommended URL activated by me for the reader's convenience):

The financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable). I encourage readers to review the “illustrative alternative” projections that are based on more sustainable assumptions for physician and other Medicare price updates. These projections are available at http://www.cms.gov/ActuarialStudies/Downloads/2011TRAlternativeScenario.pdf.

Foster appears to question the report's projections in the strong sense of flatly challenging their reliability ("do not represented a reasonable expectation") rather than in the softer sense of having doubt the projections will pan out.  The context provided by PolitiFact offers no clue as to which meaning applies, though the subsequent paragraph from the story misleadingly implies Foster intended the softer sense:

But overall, the board of trustees report is an official estimate for the Medicare program, the reports are put together with a consistent, detailed methodology, and its annual reports are usually referred to by both parties.

Since the report is "official," uses a "consistent, detailed methodology" and the results are used by both parties therefore we ignore the fact that the projections are unrealistic.  Welcome to the wonderful world of PolitiFact fact checking.

PolitiFact:

So Wasserman Schultz’s number is off by about a third.

Nevertheless, her overall point, that the Democrats’ health reform law added to the overall solvency of Medicare, is correct. The 2011 report included the same warnings that estimating health care savings for the future is an uncertain process, but it also concluded that the financial outlook for Medicare is "substantially improved as a result of the changes in the Affordable Care Act."

Missing the number "by about a third" represents more kid glove treatment.  If 12 years had been the benchmark, then 8 years would be off by about a third.  Where the benchmark is 8 years, the number 12 is off by half (a 50 percent inflation).

On the bright side, Drobnic Holan does identify a underlying message, albeit a slightly different one than I came up with.  Supposedly Wasserman Schultz's point was the improved  solvency of Medicare.

I'd argue that Drobnic Holan has a weak case, here.  If Medicare simply stopped paying for treatment, it would immediately improve the solvency picture for Medicare since Medicare payroll taxes would continue to roll in while disbursements would cease.  Wasserman Schultz's claim is misleading and empty without her associated claim that Democrats made Medicare "better for seniors overall.  As the preceding illustration showed, merely achieving prolonged solvency does not automatically translate into a Medicare program that is better for seniors overall.

 The report Foster wanted readers like Drobnic Holan to see casts substantial doubt on that proposition.  Note how current law (including PPACA) supposedly brings Medicare reimbursement down below even Medicaid reimbursement levels according to the projections of the outside panel of experts (click image for enlarged view):

http://www.cms.gov/ActuarialStudies/Downloads/2011TRAlternativeScenario.pdf

That reimbursement trend would soon make Medicare business even less attractive to health care providers than Medicaid business.   Providers would tend to refuse Medicare business, causing bottlenecks in delivery of care.  Increased waiting times and/or cost shifting to private insurance--the latter boosting health care costs for the private insurance market--would result:

In practice, providers could not sustain continuing negative margins and, absent legislative changes, would have to withdraw from providing services to Medicare beneficiaries, merge with other provider groups, or shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.

Improvements to the actuarial future of Medicare via the PPACA rely primarily on two pillars.  One, an increase in Medicare taxes.  Two, decreased reimbursement rates.  A third pillar, tying reimbursement rates to outcomes, may help control costs, but that outcome remains in doubt.  Certainly it creates a perverse incentive to avoid treating people, such as elderly or sickly people, whose outcomes are statistically worse than for otherwise healthier people.

Such is the Democratic Party's assurance of a better Medicare for the elderly: an opinion perhaps sincerely held but based on scarce evidence.  PolitiFact dons the kid gloves again, consigning to oblivion a critical portion of Wasserman Schultz's underlying message and grading her statement according to what remained.

The Democrats improved Medicare's fiscal bottom line?  Anyone can do that simply by raising taxes.  Yet raising taxes by itself obviously does nothing to improve care--certainly nothing that chasing providers from the market cannot counter in the opposite direction.

PolitiFact rolls out the conclusion:

To summarize, Wasserman Schultz said that the Democratic health care law "added 12 years of solvency to Medicare." She’s off on the number, citing an older, more optimistic report. The latest estimate indicates Medicare will only have eight additional years of solvency, one-third less than the previous estimate. But she’s right that the Affordable Care Act improved the financial outlook for Medicare, and that Democrats have successfully passed legislation to reduce future spending for the program. So we rate her statement Half True.

Yes, we get a repeat of the "one-third less" varnish.  More importantly PolitiFact achieves the type of synchronization with Wasserman Schultz's spin that Olympic pairs skaters need to win a gold medal.  Consider again the caution we received from the alternative scenario:

The immediate physician fee reductions required under current law are clearly unworkable and are almost certain to be overridden by Congress. The productivity adjustments will affect other Medicare price levels much more gradually, but a strong likelihood exists that, without very substantial and transformational changes in health care practices, payment rates would become inadequate in the long range. As a result, the projections shown in the 2011 Trustees Report for current law should not be interpreted as our best expectation of actual Medicare financial operations in the future but rather as illustrations of the very favorable impact of permanently slower growth in health care costs, if such slower growth can be achieved.

It might be said that PolitiFact throws caution to the winds with this fact check.


The grades:

Angie Drobnic Holan:  F
John Bartosek:  F

A partial list of the problems resulting in the failing grades:

• Imagining the underlying message most favorable to Wasserman Schultz
• Using 12 as the baseline for the degree of accuracy rather than eight
• Placing undue weight on the actuarial predictions despite the obvious warnings
• Linking to secondary sources rather than to the primary sources

Afters:

Though either incompetently or dishonestly performed, this fact check provides an especially valuable insight into the PolitiMath theorem of mathematical accuracy.   PolitiFact found Wasserman Schultz's underlying message as good as gold, therefore it should follow that the "Half True" rating (as opposed to simply "True") results entirely from Wasserman Schultz's 50 percent inflation of the number of years added to Medicare solvency.

For comparison, Newt Gingrich recently received a "False" rating for a figure that was off by 33 percent.