PolitiFlub: PolitiFact covering for Democrats on Medicare

Today PolitiFact's Angie Drobnic Holan unveiled a PolitiFact primer on Medicare.

It's not all bad.  It provides some helpful information.

But it ignores and/or distorts perhaps the central issue in the Medicare debate:  cost.

How does PolitiFact do it?

PolitiFact (bold emphasis added):

The health care law, though, is loaded with other changes to Medicare. Most notably, Democrats found ways to reduce projected spending by $500 billion over 10 years, which they then counted as deficit reductions against new spending in the health care law.

The idea is to steer Medicare away from paying for each treatment (called "fee for service") and toward a system that pays doctors and hospitals based on improving patient health.

The savings came from reducing payments to Medicare Advantage and to hospitals, nursing homes and other skilled nursing facilities and home health agencies. The reductions are part of programs intended to improve care and make it more efficient — for instance, by lowering payments for preventable hospital readmissions.

The above three paragraphs from PolitiFact are fairly loaded with misdirection.

First example:  "Democrats found ways to reduce projected spending by $500 billion over 10 years."  The statement is true but misleading.  Democrats found ways to reduce projected spending by pretending the "Doc fix" will not occur.  The "Doc fix" keeps Medicare reimbursement rate schedules from dropping so low that it chases doctors from the practice of medicine with a resulting shortage of services. 

Here's how the Trustees of the Social Security and Medicare trust funds described it in a 2012 report:

Most of the ACA-related cost saving is attributable to a reduction in the annual payment updates for most Medicare services (other than physicians’ services and drugs) by total economy multifactor productivity growth, which the Trustees project will average 1.1 percent per year. The report notes that sustaining these payment reductions indefinitely will require unprecedented efficiency-enhancing innovations in health care payment and delivery systems that are by no means certain. In addition, the Trustees assume an almost 31-percent reduction in Medicare payment rates for physician services will be implemented in 2013 as required by current law, which is also highly uncertain.

Drobnic Holan's second paragraph above settles on a relatively minor feature of the Democrats' health care reform.  As the Medicare trustees note, savings from changing the nature of reimbursement does not certainly lead to savings.  Incentives for better patient care lead to patients living longer and thus more likely needing additional medical services in the future.  Does it lead in practice to a net savings over a baseline projection?

In her third paragraph Drobnic Holan pulls a "bury the lede" move by sticking the cuts to Medicare Advantage in just ahead of cuts to traditional Medicare services.   Seriously, try reading it this way:  "The savings came from reducing payments to hospitals, nursing homes and other skilled nursing facilities and home health agencies, as well as to Medicare Advantage."  For the ACA's first 10 years a large share of the projected savings come from also cutting payments to doctors (see "Doc fix").

Paying for Medicare in its current form will not just be "a challenge," as Drobnic Holan puts it.  The structure of Medicare under the ACA makes it likely that "Medicare as we know it" will end in fiscal ruin unless reforms under the ACA result in deep and widespread rationing of services.

Democrats running for election in 2012 will appreciate it if we're all unaware of that.  And PolitiFact did its part to help.