Elderly-care unaffordable in socialist Britain

Frontline services such as social work, meals on wheels and road maintenance may have to be cut to cover the cost of controversial plans for elderly care at home, local authority leaders have warned. The £670 million required to provide free care for those most in need in their own homes — a key government policy — will add pressure to councils already trying to find multimillion-pound savings.

A rise in council tax of between 1 and 2 per cent will be needed to meet the cost, while cuts in adult and childrens’ social care services are an “unwanted but very real possibility”, council chiefs have told The Times.

The warning came as Andy Burnham, the Health Secretary, was forced to defend his Personal Care at Home Bill yesterday in a two-hour appearance before the Commons Health Select Committee. He was questioned repeatedly about concerns surrounding the Bill reported by The Times, including its impact on care and clinical research budgets. Critics believe that the costs calculated by the Government are a significant underestimate and care experts have attacked the policy for disrupting elderly care strategies and being little more than an attempt at eye-catching electioneering.

The draft Bill, set out in the Queen’s Speech in November, was described by Labour peers as an “exocet” on social-care reform and “a demolition job” on budgets, while MPs and care providers have also criticised it for being ill-conceived and uncosted.

In the latest blow to Mr Burnham’s plans, council chiefs have told The Times that the extra costs will force tax rises and service cuts. Backroom staff, from lawyers and human resources workers to environmental planners, would also be at threat, as well as infrastructure programmes such as road maintenance. Plans to introduce or upgrade local amenities such as sports facilities, bus services and meals on wheels would have to be reassessed.

The annual cost of the Bill is put at £670 million, which ministers say will support 400,000 people with the highest needs to stay in their own homes. Of this total, £420 million is to come from existing Department of Health budgets. Local authorities have been told that they must provide the remaining £250 million from efficiency savings. The first year of the scheme, running from October to April 2011, would require £125 million of local authority efficiency savings.

Mr Burnham said that he “fundamentally rejected” the suggestion that the cost calculations were flawed. “The characterisation of an exocet is 100 per cent wrong,” he said. Pressed on how £60 million of clinical research savings would be made to NHS budgets to help to fund the plans, and which areas would be affected, Mr Burnham said that it had yet to be finally decided, but would not involve frontline services.

Ken Thornber, head of Hampshire County Council and a member of the social care board of the Local Government Association (LGA), said that for councils already making multimillion-pound savings in backroom staff, this could be met only with an increase in council tax. His council, one of the largest, was already trying to save £15 million a year and a further £15 million in 2011 to absorb inflationary pressures. “As things stand we would have to find between £5 million and £10 million over and above the £30 million which we are presently projected to need to find in 2011-12,” he said. Mr Thornber added that it could mean up to £20 a year on council tax bills for the 550,000 households in Hampshire.

The funding from the Department of Health would not alleviate pressures on services, he said, because it was covering people who previously would have been cared for by the NHS or in care homes.

Jenny Owen, president of the Association of Directors of Adult Social Services (Adass) and director of adult social care for Essex County Council, said the council estimated that it would need to find £4 million of savings. “If you do not increase council tax by 1 or 2 per cent it will be a reduction in services.”

Andrew Lansley, the Conservative health spokesman, said that the plans were being rushed through for electoral gain. “While in an ideal world we want to give free care to as many elderly people as possible, it is simply not affordable, particularly since we are in the throes of a debt crisis. The reality is that Gordon Brown will only be able to pay for this through cuts to the NHS and higher council taxes.”

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Australia: Corrupt health bureaucrats finally carpeted

TWO unidentified Queensland Health staff face disciplinary action following a financial probe into the Royal Children's Hospital. Two staff subject to the long-running investigation have been served with show-cause notices asking them to explain why action should not be taken against them. Queensland Health director-general Mick Reid would not reveal their identities, insisting both public servants had to be shown natural justice and be allowed to respond within 14 days.

The move comes after The Courier-Mail revealed that a Queensland Health ethical standards probe was investigating allegations including:

• RCH boss Doug Brown and former finance manager Alan Fletcher, now the chief financial officer for the Queensland Children's Hospital, processed an $8000 no-interest loan of taxpayer funds to a senior colleague for overseas travel.

• Mr Brown approved $6500 worth of luxury beauty treatments for 65 nurses as part of an alleged payoff following a dispute sparked when new staff scored free parking.

• Junior staff paid for wedding and baby gifts such as cookware for colleagues out of hospital funds.

Mr Reid said he was now acting on recommendations relating to "a number of matters" after the CMC completed a review of the Queensland Health ethical standards probe. "I have issued show-cause notices to two Queensland Health staff that were subject to the investigation," Mr Reid said in a statement. "As is standard procedure and in accordance with natural justice, the officers have been given 14 days to respond." It is not known whether Mr Brown and Mr Fletcher are the subjects of this action.

The moves came as Health Minister Paul Lucas criticised his department's handling of the affair, saying the two-year investigation had taken too long. "It has taken longer than I thought it should have," Mr Lucas said.

The Opposition has called for a broader inquiry into all public hospitals, with leader John-Paul Langbroek saying the allegations raised serious questions.

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His 'Highness' or His 'Highhandedness'?

The more we read about Obama's health care scheme and his handling of it the more obvious his arrogance and contempt for the people become. This is stunning behavior, really, for any administration (and his party), but especially one that holds itself out as a servant of the people and a model of transparency.

Just consider headlines from the past few days: "Obama Reneges on Health Care Transparency: As a Candidate, President Obama Promised to Put Health Care Reform Negotiations on C-SPAN," "White House REFUSES To Discuss Broken C-Span Promise," "Dems Will Bypass Conference Committee To Get Health Care Passed," "Sources: Obama, Dems to sidestep GOP on health care," "Hatch: Healthcare bill 'rich' for challenges on constitutionality," "AP sources: Obama OKs taxing high-end health plans," "Obama Pushes for Quick Health Care Deal," "Conference Committee Bypassed," "House Will Vote on Pro-Abortion Senate Bill" and -- get this one -- "Pelosi: 'There Has Never Been a More Open Process.'"

Seriously, who do these people think they are? No wonder they always assumed the worst of former President George W. Bush and then accused him of sinister motives he never had and actions he never committed. As I've noted before, they were projecting. They knew how they would behave if in power. Now, once again, they're proving it.

Think about it. Obama promised at least eight times -- memorialized in video recordings -- that he would air health care debates and negotiations on C-SPAN for all to see. If you watch the videos, you'll notice that he was even wearing that smug, self-righteous look as he made his deceitful pledge, as if to say: "When I take over, we are finally going to return power to the people. We'll be open and transparent. We won't behave as Washington politicians are used to behaving. We're better than that. We're morally superior."

But now, his highness is not only not going to air the negotiations on television; he and his party are making sure to negotiate behind closed doors, period. Even the Republicans -- you know, that other political party -- will not be invited or permitted to participate in the discussions.

It gets worse. When pressed to respond to the open-and-shut claim that he deceived the people in promising a transparent process, he simply says -- through his disgraceful surrogates -- that he isn't going to be bothered to discuss it. He doesn't have to explain himself. He's the messiah. Who are we to doubt -- much less question -- him?

Keep in mind, folks, that this is a bill the public has clearly indicated it does not want passed. Americans are not ready for socialized medicine. But Obama and his party don't care. They are forcing it down our throats as quickly as they can, unilaterally -- to borrow their favorite term to criticize President Bush's foreign policy.... A question for you lingering Obama supporters: How is his "man of the people" facade looking to you now?

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An Entitlement Certain to Grow In Spite Of 'Firewalls'

One of the main arguments President Barack Obama and other Democrats have made on behalf of the health care bills that have passed the House and the Senate is that they would reduce the federal budget deficit in the coming decade and in the years following as well. Their claim is backed up by the official cost estimates provided by the Congressional Budget Office that show modest improvements in the budget outlook through 2019 if the bills become law. But there are important reasons to be very skeptical that a final health care bill will improve the nation’s budget outlook, both in the short and the long term.

For starters, neither bill addresses the impending cut in the fees paid to physicians under the Medicare program. There is bipartisan opposition to these cuts, but the cost of fixing the problem would exceed $200 billion over 10 years. Consequently, congressional Democrats aren’t providing a permanent solution in the health care bills; they are in effect understating the cost of the reform program they have promised to deliver. If the so-called “doc fix” were included in the accounting, the health care reform effort would no longer be a deficit reducer at all.

In addition, CBO expects the financing provisions of the bill to produce revenue and spending reductions that more than offset the growing cost of the new health entitlement expansions contemplated in the legislation. That would be no small feat, because the entitlement spending is expected to increase at a very rapid rate indeed, just as Medicare and Medicaid spending have for more than four decades. By 2019, the Medicaid expansion and the subsidies for health-insurance premiums in the exchanges are expected to cost about $200 billion annually, and grow at an eight percent rate every year thereafter.

On paper, of course, CBO is right. The “pay fors” would grow at an equally rapid rate, as they are currently written in the bills. But that’s only because they assume key indexing provisions that function like a tightening of the vise over time.

The House bill includes a new surtax for upper income taxpayers, while the Senate passed an increase in the Medicare payroll tax for high earners as well as a new excise tax on high-cost insurance plans. In all instances, the thresholds used to determine tax liability would be set in ways that capture more taxpayers over time. The threshold for application of the Medicare payroll tax hike — $200,000 for individuals — would not be indexed at all to keep up with inflation. Nor would the House-passed income-tax surtax.

Meanwhile, the threshold for what constitutes a “high-cost” insurance plan would be indexed below expected medical inflation. Consequently, in 10 or 15 years’ time, many more Americans would find themselves in plans deemed to be unacceptably costly.

CBO also gives both the House and Senate bills credit for substantial savings in the Medicare program. A large part of that would come from shaving off a half percentage point every year from the normal Medicare inflation update for hospitals and other service providers; that annual cut assumes improvements in productivity.

Both the Chief Actuary of the Department of Health and Human Services, as well as CBO, have essentially raised serious doubts about whether such a perpetual cut in payment rates can be sustained without leading large numbers of hospitals and other service suppliers to drop out of the Medicare program, and thus harm beneficiary access to timely care. Nonetheless, that’s what the House and Senate sponsors of the health legislation are relying on when they claim their bills will improve the nation’s fiscal standing.

But even if all of the offsets work out as planned, which is not likely, the House and Senate bills would still create substantial budgetary risks because of the pressures for entitlement expansion they would unleash.

Both bills assume the new entitlement spending can be held down with the so-called “firewall” provisions. These are the rules that essentially preclude individuals from gaining access to premium subsidies available in the exchanges. If an employer offers "qualified" insurance coverage to a worker, the employee really has no choice but to take it if he wants to avoid paying the penalty for going uninsured. But these rules would create large disparities in the federal subsidies made available to workers inside and outside the exchanges.

Gene Steuerle of the Urban Institute has calculated that, under the Senate bill, a family of four with an income of $60,000 with employer-sponsored health care would get $4,500 less in federal support outside of the exchange than a similar family inside the exchange would get in 2016. And there would be many tens of millions more families outside the exchange than in it, according to CBO. Today, there are about 127 million Americans under the age of 65 with incomes between 100 and 400 percent of the federal poverty line, but CBO expects only about 18 million people will be getting exchange subsidies in 2016.

If enacted as currently written, it’s entirely predictable what would happen next. Pressure would build to treat all Americans fairly, regardless of where they get their insurance. One way or another, the subsidies provided to those in the exchanges would be made more widely available, driving the costs of reform well above the $900 billion limit the administration has set for the initiative.

The president has said that he wants a health reform bill in large part because it’s necessary to get better control of the federal budget. But the bills that have been developed in Congress fall far short of his stated objective. The new entitlement expansions are certain to occur, followed quickly by irresistible pressure to make them even more widely available and generous. Meanwhile, Congress would have to show heroic restraint to allow the tax increases and spending cuts to play out as written. That’s a recipe for another unfunded federal program.

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Congress on Health Care: Sticking It To The States

In their quest for universal health care coverage, liberal lawmakers have come to a harsh awakening. As it turns out, insuring everyone is expensive! So, in an attempt to make good on their vast promises without going beyond President Obama’s $900 billion spending limit for health care reform, the Democrats have turned to Medicaid as a means to expand coverage in both the House and Senate health care bills.

Momentarily putting aside the question of whether expanding the nation’s worst program counts as reform, expanding Medicaid poses yet problems, using Medicaid to cover the uninsured is appealing to federal lawmakers because they can share the burden of paying for it with the states. Most state officials, unlike Congress, actually have to balance a budget.

In a recent paper, Heritage scholar Dennis Smith outlines why the states are simply incapable of carrying this burden, regardless of how high the federal matching rates are. Smith points out that, though state general fund expenditures over the last 32 years have increased at an average rate of 5.6 percent each year, in 2009 expenditures actually decreased. This trend is expected to continue into 2010.

In their budgets for 2010, states made across the board spending cuts. 30 states made cuts to their K-12 education budgets, 30 states cut higher education, and 28 states even made cuts to Medicaid. And yet Congress expects these same states to increase spending on Medicaid by adding more people to the program.

Adding to these dim prospects is the fact that states have become more and more dependent on federal funding to meet their budgets. Federal funding for the states has increased 21.2 percent, mostly due to the stimulus bill. When these funds expire, which they will, it will be up to the states to either make further cuts to state programs or somehow come up with the funds themselves.

The states are currently facing a fiscal crisis. Adding to their financial obligations will only result in more drastic cuts to other state programs. Since Medicaid and education account for the majority of state spending, and states will be forced to increase spending in Medicaid, it only seems logical that budgetary cuts will be made to education, another area in which reform is needed. Federal lawmakers should take these matters into account when voting for a mandate on the states to increase their Medicaid spending.

Expanding Medicaid does not count as health care reform. True reform would include restructuring Medicaid as it currently stands, an issue which has been excluded in the current health care reform bills.

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