Sorry, but a lot of this is wrong. You should take a look at Table IV.B6 from the Trustees Report. (https://www.cms.gov/oact/tr/2024)
1. You cite the KFF chart to suggest Medicare spending is driven by physician spending, because you equate Part B spending with physician spending. And then you focus the rest of your post on dynamics in the physician fee schedule. But only ~14% of Part B spending is for services paid under the physician fee schedule.
2. In aggregate, physician fee schedule spending is not really driving any growth in Medicare spending, because it's been basically flat for a decade ($70.6 billion in 2014, $70.9 billion in 2023). That's because all the per-person growth has been offset by the enrollment shift into Medicare Advantage.
3. You suggest we should be concerned with physician spending instead of drug spending, but you're ignoring Part B drugs, which is actually one of the fasting areas of spending growth in Medicare.
4. You say growth in physician spending is driven by price, but actually the overall price level has been growing more slowly than inflation or commercial prices; and it's expected to grow even slower in the future. To the extent that we've had growth in per capita spending for physician services in traditional Medicare, it's been volume + drugs.
5. You say physician spending is growing because specialists just tell CMS how much to pay them. But you're getting confused between how Medicare sets relative prices across services and how Medicare sets the overall price level. The specialists influence relative price levels, but not the overall price level.
6. You suggest the program would save money by shifting more enrollees into Part C, but that's super wrong. The program pays 20%+ more when people switch to Part C.
Sorry, but a lot of this is wrong. You should take a look at Table IV.B6 from the Trustees Report. (https://www.cms.gov/oact/tr/2024)
1. You cite the KFF chart to suggest Medicare spending is driven by physician spending, because you equate Part B spending with physician spending. And then you focus the rest of your post on dynamics in the physician fee schedule. But only ~14% of Part B spending is for services paid under the physician fee schedule.
2. In aggregate, physician fee schedule spending is not really driving any growth in Medicare spending, because it's been basically flat for a decade ($70.6 billion in 2014, $70.9 billion in 2023). That's because all the per-person growth has been offset by the enrollment shift into Medicare Advantage.
3. You suggest we should be concerned with physician spending instead of drug spending, but you're ignoring Part B drugs, which is actually one of the fasting areas of spending growth in Medicare.
4. You say growth in physician spending is driven by price, but actually the overall price level has been growing more slowly than inflation or commercial prices; and it's expected to grow even slower in the future. To the extent that we've had growth in per capita spending for physician services in traditional Medicare, it's been volume + drugs.
5. You say physician spending is growing because specialists just tell CMS how much to pay them. But you're getting confused between how Medicare sets relative prices across services and how Medicare sets the overall price level. The specialists influence relative price levels, but not the overall price level.
6. You suggest the program would save money by shifting more enrollees into Part C, but that's super wrong. The program pays 20%+ more when people switch to Part C.