Remember when Newt Gingrich was savaged for proposing reductions in the rate of growth in Medicare and Medicaid? Obama seems to be doing a Newt almost every other day, as he reaches for a way to pay for his health-care program. How long before opportunistic Republicans begin warning seniors that Obama is putting their Medicare at risk, in one of those turn-about-is-fair-play Washington moments? The proposed Obama savings don’t come from innovative reforms but from simply squeezing providers, which will have predictable negative consequences. In fact, as NBC points out, Peter Orszag himself noted these consequences when he was head of the CBO:
An argument against this option is that reducing the payment updates might cause some providers to lower the quality of care they provided or to stop serving Medicare beneficiaries altogether. In addition, different types of health care services may be more capable of achieving such productivity increases than others are. If so, this option could cause considerable hardship for providers that are not able to increase their productivity by the amount assumed in the update.