Medicare: The Problem and the Solution?
The White House proposes to lower the unmanageable costs of Medicare by ... expanding it.
2. Government-run health care isn’t the ticket to innovative, dynamic, consumer-friendly care. Yes, our current health care market falls short of this ideal in many ways. It is largely a product of WWII-era wage restrictions and tax policy, which ushered in a system of employer-provided care and moved us away from having consumers purchase health care or insurance directly. It made employers the middlemen, made insurers less responsive to consumers, made consumers less price-conscious, and left those without employer-provided insurance on the outside looking in.
Now, having inherited this imperfect system, the way to fix it is to change the tax code to stop penalizing people whose employers don’t provide insurance. Whether you get a tax-break for health insurance shouldn’t depend on what kind of job you have. That policy is fundamentally unfair. And with a substantial new tax credit in hand, millions of Americans could far more easily afford private insurance, which would also inject needed life into a free market that has been sapped of much of its vigor by poorly conceived government meddling.
What we don’t need is to break down the entire system of employer-provided coverage and force millions of Americans off of their employer-provided insurance and onto government-run care. If President Obama’s “public option” passes, millions of employers will choose it — for millions of unsuspecting employees.
3. Medicare pays doctors, nurses, and hospitals only about 75 cents on the dollar per procedure. So, if the whole system moves toward government-run health care, medical professionals will take a financial hit, and fewer people will choose to work in that field. Do those who doubt this also doubt that lower salaries drive away teachers?
4. The combination of fewer medical professionals and the pressing need to control costs would lead to the inevitable result of all government-run health care: rationing. There are only two ways to control costs — through having a vibrant free-market in which competitors vie for the business of value-shopping consumers, or through having the government ration care.
Government-run health care is the horse, not the cart, on the road to higher costs. Adding more horses will only pull us further and faster in the wrong direction.
Under a government monopoly, the quality of health care and the freedom of consumers would diminish, while costs, tax-bills, and deficits would rise. Americans would lose all around.
But that’s exactly what we should expect when someone correctly identifies the problem — and then says that the solution is to expand the problem.
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The author, the director of the Benjamin Rush Society, was the senior speechwriter for Secretary Mike Leavitt at the U.S. Department of Health and Human Services
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20 Comments
1. John Moore:While the general tenor of the post is correct, there are a few problems…
1) The comparison of Medicare costs to private costs is inappropriate. Medicare, by charter, cares for older, sicker people than private insurance. Hence it is hardly surprising its costs have risen more.
2) The supply of doctors in the US has long been artificially constrained by the AMA’s refusal to graduate more MD’s. The high ratio of applicants to medical school to those accepted shows that plenty could leave the field and there would be those eager to step up to the job.
3) The private system has glaring holes in it – it is unaffordable to many, and utterly unavailable (outside of employer-based insurance) to those with pre-existing conditions.
The government will do a worse job than any alternative, but the current system is on the rocks and foundering, and that is not just due to government.
Jun 25, 2009 - 11:37 pm 2. Marc Malone:I actually have a free solution to the whole healthcare situation. I’m serious. I have an actual solution. The question is, how do I put it into the right hands? I don’t want to give it to Obama, so that he can claim it. (I’d like to give it to Palin and drive the Left nuts.)
Jun 26, 2009 - 12:01 am 3. The Shadow:Marc Malone:
We are all waiting with baited breath for your brilliant solution.
Jun 26, 2009 - 8:45 am 4. The Shadow:I, like most people who work, have the plan my employer choses and changes about every year looking to save money
Jun 26, 2009 - 8:46 am 5. moron:“2) The supply of doctors in the US has long been artificially constrained by the AMA’s refusal to graduate more MD’s.”
The AMA does not graduate MDs nor does it have any control over that process.
Jun 26, 2009 - 8:50 am 6. Sherab Zangpo:“Under a government monopoly, the quality of health care and the freedom of consumers would diminish, while costs, tax-bills, and deficits would rise. Americans would lose all around.”
Well, Americans are BAD and must be punished for being bad, so the Apologizer in Chief thinks that this is the RIGHT solution.
And he will also punish the evil American with cap and trade (that will increase the cost of electricity).
Then he will teach the Americans a lesson with new taxes on EVERYTHING (VAT).
After all that, Americans will no longer be able to be bad. And they will stop going around disturbing decent people like Hussein (Saddam) and Chavez.
Welcome to the new, GOOD, America !
Brought to you by the Internationalist Subversives Inc.
Thank you for the opportunity to comment.
Jun 26, 2009 - 8:55 am 7. jimpres:I am over 70 and went to the Dr yesterday and he said I don’t accept medicare. Seems to me that is like not having medical insurance.
Jun 26, 2009 - 9:28 am 8. Hotpatch 6:I am 66 and am on MEDICARE, not because I like it but because I have no choice. It is a good thing I have private medical insurance, as MEDICARE is rather “ungenerous” in their payments to providers. So many providers are not eager to see MEDICARE patients. Can you blame them? After all, doctors do not provide medical care as a public service, they do it for money. Nothing wrong with that (unless you are a Democrat).
Jun 26, 2009 - 9:45 am 9. Abu Infidel:It’s going to have to be rationed. Most of your lifetime medical expenses are used in the last few months of life. We should focus on keeping people comfortable during their last days intead of doing one costly intervention after another.
Death is a part of life.
Jun 26, 2009 - 1:06 pm 10. Caestal:From the standpoint of someone who deals with Medicare and private insurances in his job, I have to say that I wish we could have universal healthcare, or some variation of it as proposed by President Obama, but when I think about what Medicare has already done to US healthcare, I realize the odds of actually coming up with a working alternative are incredibly dismal.
Jun 27, 2009 - 1:50 am 11. canuck:“Medicare pays doctors, nurses, and hospitals
only about 75 cents on the dollar per
procedure.”
That is only part of the problem. Medicare pays 75 cents on the dollar of the price that *they* set as the price of the procedure. Additionally, just to accept Medicare, you have all sorts of extra paperwork and expensive restrictions on your actions, *even on patients who do not have Medicare*. Eventually, you are left with the choice of either taking a loss or not taking Medicare at all… or massively increasing the costs paid by everyone.
I am over 70 and went to the Dr yesterday
and he said I don’t accept medicare. Seems
to me that is like not having medical
insurance.
No, believe me, if you ever have to go through a time without medical insurance, as I did for the ten years after I left the military, you will see the difference. Bad coverage is a world apart from no coverage.
This article is good but understates many of the problems actually created by the M&M’s…Medicare and Medicaid. For hospitals they are able to recover about 82% of their actual costs (Many of them silly to meet Federal regulations) through a combination of DRG (single payment for a diagnosis irrespective of acuity or cost) and a number of clawbacks. For us in 2007 with high Medicare population it meant shifting $802/insured bed/day just to compensate for the M&M shortfall. If the insured base is eroded, hospitals with high M&M usage will either fold or ration care. There will be a parallel system for “payers”.
The arguments made by the first comment poster are spurious. His first point is meaningless when one considers that those that are actually keeping the system afloat (those patients with insurance or self-paying) are going to abandon (or be forced to abandon) the role of supporting the underfunded when they join the government plan, irrespective of acuity.
Second, point is nonsense. The AMA can’t even speak for doctors let alone restrict Medical school size and admissions. Government under the Clintons reduced the GME positions creating our specialist shortage which will get worse when Medicare funding is diverted. Your next generation of General Surgeons are training right now in Bangladesh. The AMA has no role; any new medical school will be financed by government and will not be private…not a great business model.
Finally, his point of “unfairness” is only valid for a small segment of the “uninsured”. Of the “47 Million”, ten million were (2007) illegals, eleven million were eligible for the M&Ms and and many millions were simply not willing to spend the money on insurance even though they made more than $75,000 per year and were employed. One to two million are on transition between jobs at any one time (making the two year average is a better evaluation).
The concept of throwing out the whole for a few is what we heard from Barney Frank and Chris Dodd…one of them is obviously writing here today under the non de plume of “John Moore”.
Jun 27, 2009 - 6:03 am 12. tom:I am still waiting for an answer to why Bush et al made it illegal for Medicare/Medicaid to negotiate prescription drug prices….
Jun 27, 2009 - 8:35 am 13. medical coverage:Government run programs will always be run less effectively than programs that are market based. Market-based medical insurance policies look to the private sector for insurance coverage rather than the government. Supporters of market-based policies believe they are the only way to give the consumer control and choice, as well as fostering competition to keep costs down and quality high.
Jun 27, 2009 - 11:30 am 14. medical insurance:Market-based policies are more cost effective for the government – and therefore the taxpayers- than publicly funded healthcare. According to the Kaiser Commission on Medicaid and the Uninsured, January 2005, if every uninsured individual was covered by a government program such as Medicaid, the cost to the federal and state governments is approximately $2000 each. If, however, low-income and modest-income Americans could purchase their own health insurance by utilizing a $1000 tax credit, the federal government would save 50% of that money. With over 45 million uninsured Americans, that savings would be substantial indeed.
Jun 27, 2009 - 11:31 am 15. venividivici:Market-based insurance would not only be more affordable health coverage, it would also provide consumers with more choice. Because savings come from a tax credit, the option to choose insurance companies, policies and doctors is left to the person who purchases the insurance, not a group of politicians. Health insurance needs vary widely from one individual to the next and having the ability to choose the options that work best for an individual’s circumstances is fundamental to quality health care.
12. tom:
I am still waiting for an answer to why Bush et al made it illegal for Medicare/Medicaid to negotiate prescription drug prices….
Jun 27, 2009 – 8:35 am
Probably because less drug company profitability means less drug company R&D means less new drugs.
I know that Leftists think people just do stuff like create new drugs for the sake of creating new drugs, but, in point of fact, it takes some kind of monetary incentive to spur people to put in the long hours necessary to produce innovations.
If you idiots could get that through your thick skulls some day, I would be very happy.
Jun 27, 2009 - 12:02 pm 16. Juliet:In my area so many doctors are not taking any government insurance new patients. I have a non Medicare/Medicaid govnerment insurance and have been looking for a doctor for months.
Jun 27, 2009 - 12:13 pm 17. Caestal:“Government run programs will always be run
Jun 28, 2009 - 1:26 am 18. Rubicon:less effectively than programs that are
market based.”
The only exception to that I have run across is in the Military. Because we didn’t have to worry about things like frivolous lawsuits, the “right” to whatever treatment a patient heard about on Oprah this week or getting sued if we told someone “you don’t need medical attention, go away” we are able to provide rapid medical attention to the people who actually needed it, at the level they needed it and in a reasonably cost-efficient manner. I can’t speak to the VA system, but the actual in-Service medical was top notch.
The idea that government bureaucrats would decide what, or even ‘if”, I get medical treatment, is frightening. Lets face it, does anyone really think politicians, their friends & allies, would not get whatever they wanted/needed? Not one politician is proposing putting members of Congress into any of the proposed plans we see today. Why? Lets be real here, we will also have those w/ the money going elsewhere for treatment. There are a number of Central American countries that have set up ‘health care centers’ to treat those willing to pay. Ironically, those systems are actually cheaper than ours. (Probably because they pay less for just about everything.)
Jun 28, 2009 - 11:17 am 19. Dan:The point is, (& I hate using this term but I am not sure how else to describe those who fit into this category), the elite, will get whatever they want since they can pay for it & afford to go where treatments are available.
Just as Canadians come to America health care shopping, so too will many Americans go international shopping for health care elsewhere since a great deal of it will not be available here. That is not a solution to the problem, its just the answer those with the means will employ.
Once we drag members of Congress & the government bureaucracies into whatever system these clowns come up with, then is when we will see a real effort to create a service oriented system that delivers quality care at reasonable prices.
I traveled in Eastern Europe in 2006 with a class of MBA students. On of our objectives was to learn about corruption in these societies. We talked to several people from Prague Czech Rep; Bratislava Slovakia; Vienna Austria; Budapest Hungary and a couple from Croatia. All of these people had government run health care. Each person told of the necessity to bribe their doctors in order to receive prompt and proper medical attention.
Jun 28, 2009 - 5:57 pm 20. CSwinson:What we will have here is government rationed health care, a shortage of doctors and if you can afford to grease the skids you can have medical treatment and due to government inefficiency and corruption this will cost us more than our current system. I guarantee it.
I have a solution to our high medical prices – it is the same solution to most of the problems in America today – unemployment, cost of healthcare, schools etc. Deport all the illegal aliens who are using our resources without paying for them.
Jun 29, 2009 - 12:59 pm