Deep Budget Cuts? Worrywart Meltdown Here!

[LineInTheSand]

Man oh man, the late 1930s and 1940s sure were a great time for the government to promise benefits for many many years.

Thank you Pima, I was not aware of this. Just like I wasn't aware of a 1990s first Gulf war decision that cadets who attended, but didn't graduate, or even get half way to graduation, would receive veteran's preference with federal jobs.

A guy in my old office was kicked out of CGA, but because he was at CGA during the tail end of the war.... he gets a bump up.

 

[kar57]

Aid And Attendance Pension

I've likely misread the post, but I'm confused why she qualified for veterans benefits. Were they retired? Did she sustain an injury while on active duty? Being a veteran doesn't suddenly qualify you for care (as I found out as I left.)

The pension is known as Aid and Attendance (A&A) Pension.

It "provides benefits for veterans and surviving spouses who require the regular attendance of another person to assist in eating, bathing, dressing and undressing or taking care of the needs of nature. It also includes individuals who are blind or a patient in a nursing home because of mental or physical incapacity. Assisted care in an assisting living facility also qualifies.
To qualify for A&A it needs to be established by your physician that you require daily assistance by others to dress, undress, bathing, cooking, eating, taking on or off of prosthetics, leave home etc. You DO NOT have to require assistance with all of these. There simply needs to be adequate medical evidence that you cannot function completely on your own.
Eligibility must be proven by filing the proper Veterans Application for Pension or Compensation. (Form 21-534 surviving spouse) (Form 21-526 Veteran.) This application will require a copy of DD-214 (see below for more information) or separation papers, Medical Evaluation from a physician, current medical issues, net worth limitations, and net income, along with out-of-pocket Medical Expenses."

There is the physical limitation portion that needs to be established as well as the financial need.

 

[MemberLG]

LG, I'm not quite sure your interpretation of China and it's spending on defense is correct. Quite to the contrary, China's military capacity is increasing as it's economy has grown. However, it is much less expensive for China to field military forces than the United States. i.e. No Tricare, no Pensions to speak of, rudimentary housing, etc. So it is not an apples to apples comparison to measure spending with regards to Chinese military aspirations. Rather, just look at what is happening to China's neighbors with respect to contested territories.

http://articles.washingtonpost.com/..._1_chinese-diplomats-luo-yuan-military-growth

When I took a class at DIA, my Northeast Asia class professor was a China Dove. He did back up his positions. What I learned from him was that Chinese, least its leadership, take a long term view, something along the line of China will be regional hegemon in 25 years and at par with United States in 50 years. The point I was trying to make was that China could be spending a lot more on it's defense, but it is not. Instead of trying to match U.S. for tank for tank, airplane for airplane, or ship for ship, she is taking her time. Also, China doesn't spend as much on taking care of it's soldiers, but it has to spend more to catch up. Most of their airplanes are 60's/70's, one "test" aircraft carrier, not sure if they have nuclear submarines, probably very limited high tech equipment.

 

[kar57]

If the budget is cut, your kids may have to survive on their incomes alone. Terrifying.

slight rewrite of that...When the budget is cut, my kids will survive on their own incomes. Reality.

 

[LineInTheSand]

slight rewrite of that...When the budget is cut, my kids will survive on their own incomes. Reality.

Kar, you put too much trust in Congress. The deadline was in January.... this next deadline is just the kicked can deadline...

 

[Pima]

LITS,

That is the thing, some of the DOD budget is tied to promises made yrs and yrs ago.

My aunt never knew about it, seriously 40 yrs., and she said an off handed remark to me. I said you should call Ft. Dix, Family Support (or whatever they called it).

She did and VOILA, they still had her in their records as his beneficiary. They even gave her interest for the insurance plan, that was never claimed. I think it was 86K.

I am sure that would not happen now!

Xposted with LITS.

I agree with your comment and Congress, but it might be because we are in the DC bubble, and thus, we might be more cynical than the avg American.

My guess is the can will be kicked to June. Come June they will kick it to Sept, but because they are all on recess in August, the can will be kicked to Nov.

Just like we have kicked the SS can for the last 20 yrs!

 

[falconfamily]

When I took a class at DIA, my Northeast Asia class professor was a China Dove. He did back up his positions. What I learned from him was that Chinese, least its leadership, take a long term view, something along the line of China will be regional hegemon in 25 years and at par with United States in 50 years. The point I was trying to make was that China could be spending a lot more on it's defense, but it is not. Instead of trying to match U.S. for tank for tank, airplane for airplane, or ship for ship, she is taking her time. Also, China doesn't spend as much on taking care of it's soldiers, but it has to spend more to catch up. Most of their airplanes are 60's/70's, one "test" aircraft carrier, not sure if they have nuclear submarines, probably very limited high tech equipment.

In the next 20 years China is projected to be outspending the United States in total defense spending. In the mean time, it is not so much about parity with the United States, it is about superiority over the likes of the Philippines and Japan. So I would respectfully challenge the assumptions of the DIA professor with regard to China.

 

[kar57]

Man oh man, the late 1930s and 1940s sure were a great time for the government to promise benefits for many many years.

Actually, not promises made in the late 30's and 40's, the VA started the Aid and Attendance Pension Program in 1993 according to Veterans Services Mission Statement. "The Pension Program at the Department of Veterans' Services began in 1993 with an interagency agreement between the Department of Veterans' Services and Executive Office of Elder Affairs. It was revised in 2007 to involve the local Veterans' Service Officers (VSO)"

 

[LineInTheSand]

Actually, not promises made in the late 30's and 40's, the VA started the Aid and Attendance Pension Program in 1993 according to Veterans Services Mission Statement. "The Pension Program at the Department of Veterans' Services began in 1993 with an interagency agreement between the Department of Veterans' Services and Executive Office of Elder Affairs. It was revised in 2007 to involve the local Veterans' Service Officers (VSO)"

Only partially referring to SS.

Perhaps this should be revisited. I don't understand what warrants this coverage....

 

[scoutpilot]

slight rewrite of that...When the budget is cut, my kids will survive on their own incomes. Reality.

So why the worry then? Are they not capable? Two SA educated parents with one kid between them aren't exactly a sob story if they suddenly pay for the healthcare, instead of using the grossly wasteful Tricare system.

 

[Aglahad]

Well, that percentage may be a little high. 1% of the population currently serves (AD or reserves, I can't recall). A number of those service members have one or more dependents.

10% of the U.S. population are veterans. Not straight "military" but the VA is close. Anyway, not all of that 10% gets benefits. Some have some level of disability, but not all.

I was just referencing the roughly 1% of current AD/reserves who have quick access to benefits such as Tricare. But you are correct in that there is a couple percentages points more of dependents, VA, disabled etc...

So why the worry then? Are they not capable? Two SA educated parents with one kid between them aren't exactly a sob story if they suddenly pay for the healthcare, instead of using the grossly wasteful Tricare system.

Tricare? Wasteful? Nahhhhh

 

[hornetguy]

So here's a challenge. What is "wasteful" about TRICARE, especially compared to other HMOs. I'm not saying there are issues, but I'd like to know what people consider wasteful before I give my input.

 

[Aglahad]

So here's a challenge. What is "wasteful" about TRICARE, especially compared to other HMOs. I'm not saying there are issues, but I'd like to know what people consider wasteful before I give my input.

There is no incentive to save. Many of the military hospitals are teaching or training hospitals which is perfectly fine. However, with no deductible payments and treatment discretion a system racks up millions upon millions of dollars with no one paying sizeable premiums except the US govt. I did rotations in both civilian hospitals and Army hospitals and the differences I saw were visible. The people who come to ER in many civilian hospitals are sick and I mean really sick because they have no access to care. Within the military system, you have sick people but you always have a larger patient population coming in with colds and bumps or because they couldn't get a same day appointment to refill their medications or because they perceive it as a quicker option than waiting a day or two. Not a big deal right? Wrong. As a teaching hospital and with the idea that "Hey everything is free" (Heard this on a few occasions) and patient population who sometimes abuses the system inevitably wasteful spending does occur. Lets look at the ER: A simple ER visit with a provider, CT, x-ray, labs and possibly a referral thousands of dollars can be racked up in a few hours with nobody footing the bill except the taxpayer. Add a stiffer co-pay for an ER visit and I guarantee petty visits would be reduced. The ER is not a primary care provider and it does not act as a bypass to see a physician and avoid scheduling an appointment. Literally the "free" mentality is ever present in military hospitals and I am sure permeates through the rest of the military. Other issues such as referrals, medication administration and medical redundancy (Patient had a CT two days ago for abdominal pain? Let's give him another just to be sure) add to inefficiency. Some insurance companies would not pay for that scan but obviously the govt will even if medically the CT would most likely show no changes. I could go on with many more anecdotes but I think I made my point. You can still give great care without being wasteful or redundant.

For TRICARE Standard, I am not really quite sure how the TRICARE repayment works out to the civilian hospitals, but I am sure the govt gets the short end of the deal.

Now do I think TRICARE is any more wasteful than other HMOs? Maybe, maybe not (however, there is more vigilance when it comes to spending in the outside world) but I do think there needs to be more fees/co-pay modelled towards towards a civilian company's HMO. I don't have a problem with TRICARE as an entity per say, mostly I am bothered by it's delivery and maintenance.

From a WP editorial:

"Tricare costs at most $1,000 per year out of pocket — less than a fifth of civilian plans, according to the Congressional Budget Office.Tricare’s costs have surged in recent years, from $19 billion in fiscal 2001 to $52.8 billion in fiscal 2011. Much of the growth was driven by Congress’s 2001 decision to add what is essentially a free Medigap plan for retirees over 65. But the main issue is the ultra-low fees and deductibles — which give retirees still of working age little incentive to economize or choose employer plans

http://articles.washingtonpost.com/...ing-age-retirees-tricare-fees-and-deductibles

 

[MaineGrad86]

But the main issue is the ultra-low fees and deductibles — which give retirees still of working age little incentive to economize or choose employer plans

http://articles.washingtonpost.com/...ing-age-retirees-tricare-fees-and-deductibles

^ This.

I pay $44.88 per month for TRICARE PRIME for a family of 5. My dental insurance costs three times that.

That number should be in the $300-$400 per month range, not under $50.

But anytime someone suggests a change - even a small one - the Veterans groups/lobbyists go full-on nuts.

Yes, they have to protect their members, but they need to see the writing on the wall. What we are doing is not sustainable.

If they raised it, I'd either pay it or shop around for another source.

 

[hornetguy]

You both are pretty spot on for the things you mentioned. I will say that TRICARE payments to purchased-care providers are negotiated contracts and usually pay somewhere between Medicare rates and standard private rates.

Civilian HMOs, such as Kaiser, are WAY WAY WAY more efficient than TRICARE. Why? Because they don't face legal and political restraints on capitation, "rationing," and most importantly, they demand much more from their providers.

The premiums and copays are a major issue. It was shown that no co-pay significantly increases utilization to a very inefficient point. Even small co-pays (like $5!) significantly reduce demand. Over the last ten years, civilian plans have become less generous and outpatient utilization has decreased - TRICARE has remained the same for utilization RATE and become more generous. The rate has remained the same and the number of ELIGIBLE (not necessarily enrolled) beneficiaries has grown by 1 million people (from around 8 to 9 million). TRICARE has not been allowed to do anything to control demand that works - namely co-pays.

The question on premiums is interesting and full of politics. Are we "violating" a promise to retirees of free healthcare for life by increasing premiums? Veterans groups are completely willing to let TRICARE costs EXPLODE to protect that "right." They will drive it into the ground to do so. Budget of the MHS is 2000: roughly 20 B. In 2013? Almost 51 B. Both those figures are in 2013 dollars. The projections are anticipating $65 B by 2017 and $95 B by 2030!!! It is already around 9% of the DoD budget and will continue to gobble up more of it. It is not sustainable. Period.

The providers in the MHS have ridiculously low utilization requirements. Something like 18-19 patients per day/per provider. That's just in availability, they often go below this. HMOs and PPOs plans are almost always over 20 per day/per provider and most primary care docs do 22-24. We way under utilize our providers and use the most ridiculous arguments to allow it. They have no incentive to work more either.

It's not looking good and as TRICARE keeps trying new things, nothing is particularly effective as the best tools are prohibited. My dissertation that will be finished later this year tries to look at just a little part of the problem and probably won't help with costs anyway. TRICARE is pretty insane.

 

[goaliedad]

Civilian HMOs, such as Kaiser, are WAY WAY WAY more efficient than TRICARE. Why? Because they don't face legal and political restraints on capitation, "rationing," and most importantly, they demand much more from their providers.

Kaiser is actually unique as they are completely vertically integrated - i.e. insurer, hospital, hospital staff (as opposed to private physicians with admitting privileges), clinics, labs. In this model, billing per service does not make sense. Keeping the overall systemic cost down does.

This model could be implemented nationwide using the major insurers and hospital systems as merger candidates.

Getting private practice physicians to buy into the employee model while owing $$$ in debt and having a valuable patient list is the problematic part of this equation.

Kaiser's other major cost advantage is that they manage the capital (facilities, equipment) while keeping doctors and technicians as employees. I'm not an insider, but I'm guessing that they hire mostly out of med school, give some sort of debt management as part of the compensation package with a contractual agreement over the length of service to retire debt. Actually not all too different from the military model of developing MDs.

The bugaboo that bit Kaiser decades ago was patient care quality, but from what I'm reading that has been addressed. Back in the day, there was a cost/patient care tradeoff that wasn't well managed, but I'm not sure if it was litigation or regulation that ended up forcing the model to a suitable balance.

The vertically integrated model does have some issues when there is inadequate number of facilities in a region (smaller markets) which can lead to a monopolistic provider situation. Today, the balance in those markets is provided by the push/pull between the insurer and provider. Integrated, the collusion could turn out to be to the detriment of the payer of the insurance. This would have to be managed most likely through state-level regulation.

 

[hornetguy]

Kaiser is actually unique as they are completely vertically integrated - i.e. insurer, hospital, hospital staff (as opposed to private physicians with admitting privileges), clinics, labs. In this model, billing per service does not make sense. Keeping the overall systemic cost down does.

This model could be implemented nationwide using the major insurers and hospital systems as merger candidates.

Getting private practice physicians to buy into the employee model while owing $$$ in debt and having a valuable patient list is the problematic part of this equation.

Kaiser's other major cost advantage is that they manage the capital (facilities, equipment) while keeping doctors and technicians as employees. I'm not an insider, but I'm guessing that they hire mostly out of med school, give some sort of debt management as part of the compensation package with a contractual agreement over the length of service to retire debt. Actually not all too different from the military model of developing MDs.

The bugaboo that bit Kaiser decades ago was patient care quality, but from what I'm reading that has been addressed. Back in the day, there was a cost/patient care tradeoff that wasn't well managed, but I'm not sure if it was litigation or regulation that ended up forcing the model to a suitable balance.

The vertically integrated model does have some issues when there is inadequate number of facilities in a region (smaller markets) which can lead to a monopolistic provider situation. Today, the balance in those markets is provided by the push/pull between the insurer and provider. Integrated, the collusion could turn out to be to the detriment of the payer of the insurance. This would have to be managed most likely through state-level regulation.

All good points. Kaiser is the state of the art now. Systems look to them for innovation. In almost every Kaiser market, they are ranked the number one insurer for cost, quality, etc. They really are a remarkable system and studied heavily. The Kaiser foundation as the research branch is invaluable.

On the note of private physicians....they are being gobbled up into larger practices. Over the last ten years they've been opting to leave a single or small practice and join larger practices and hospital systems. Just too expensive and stressful in today's environment to compete against the larger systems. Not necessarily bad either, the larger systems are doing better at keeping care accountable which is a major major problem.

 

[goaliedad]

All good points. Kaiser is the state of the art now. Systems look to them for innovation. In almost every Kaiser market, they are ranked the number one insurer for cost, quality, etc. They really are a remarkable system and studied heavily. The Kaiser foundation as the research branch is invaluable.

On the note of private physicians....they are being gobbled up into larger practices. Over the last ten years they've been opting to leave a single or small practice and join larger practices and hospital systems. Just too expensive and stressful in today's environment to compete against the larger systems. Not necessarily bad either, the larger systems are doing better at keeping care accountable which is a major major problem.

It would be interesting to see the federal government try to force enrollment in a Kaiser type plan where they exist to see if they can move to privatizing the system. It seems that they as an insurer have the same cost/quality problems as others in getting away from the fee-for-service model. It would definitely get those currently enrolled up in arms, but would send notice to other healthcare providers that this model is where the future is at. As the biggest consumer of services, it could possibly reshape the industry and maybe save the government a few bucks along the way.

 

[hornetguy]

It would be interesting to see the federal government try to force enrollment in a Kaiser type plan where they exist to see if they can move to privatizing the system. It seems that they as an insurer have the same cost/quality problems as others in getting away from the fee-for-service model. It would definitely get those currently enrolled up in arms, but would send notice to other healthcare providers that this model is where the future is at. As the biggest consumer of services, it could possibly reshape the industry and maybe save the government a few bucks along the way.

A lot of the research and work for/by TRICARE is in the form of an industry leader. They know if they hit upon something that works, it can/will reshape the industry.

As I think you know, Prime is an HMO and Standard/Extra is a PPO. In places with larger facilities, Prime looks a lot like Kaiser in terms of capital and facilities - I'd like to see what they could do if they copied Kaiser where possible rather than privitize. In a way it is, the three domestic TRICARE regions are contracts, not government agencies. They just have to abide by strict rules.

There are opportunities....but think about the stakeholders involved. Some people don't want to see the government be successful as it can pave the way towards greater direct involvement in healthcare (think single payer at the extreme). And of course the veterans groups are powerful. Things that make TRICARE a better system (premiums and copays) are among the quickest ways to get those groups out in full force.

It's an interesting area of research. I'm getting well read but it would take years upon years to get near a level considered "expert." My chair has been working on military healthcare for about 30 years now, she is fascinating to listen to, she knows this stuff inside and out.

EDIT: RAND just released this too. Interesting abstract: http://www.rand.org/blog/2013/02/do...and_socialflow_facebook&utm_medium=socialflow

 

[goaliedad]

A lot of the research and work for/by TRICARE is in the form of an industry leader. They know if they hit upon something that works, it can/will reshape the industry.

As I think you know, Prime is an HMO and Standard/Extra is a PPO. In places with larger facilities, Prime looks a lot like Kaiser in terms of capital and facilities - I'd like to see what they could do if they copied Kaiser where possible rather than privitize. In a way it is, the three domestic TRICARE regions are contracts, not government agencies. They just have to abide by strict rules.

There are opportunities....but think about the stakeholders involved. Some people don't want to see the government be successful as it can pave the way towards greater direct involvement in healthcare (think single payer at the extreme). And of course the veterans groups are powerful. Things that make TRICARE a better system (premiums and copays) are among the quickest ways to get those groups out in full force.

It's an interesting area of research. I'm getting well read but it would take years upon years to get near a level considered "expert." My chair has been working on military healthcare for about 30 years now, she is fascinating to listen to, she knows this stuff inside and out.

EDIT: RAND just released this too. Interesting abstract: http://www.rand.org/blog/2013/02/do...and_socialflow_facebook&utm_medium=socialflow

I agree that the politics of the day tend to leave all sides bludgeoning each other more than solving the actual problem. As much as I am a free-market capitalist, I recognize that not everything lends itself to a competitive solution because not all parties are of similar economic power, nor is the product well-understood by the consuming parties. In many ways, you have a market for healthcare and peace-of-mind (insurance) co-mingled which makes anything but a unified solution a never-ending push/pull between the two.

The high level of fear/mistrust between the participating parties also tends to contribute to the lack of movement towards a unified solution. And while there is money available to keep that environment reinforced (lobbying is a small investment to keep the gravy train rolling as currently scheduled), things won't change.