Map of life expectancy at birth from Global Education Project.

Monday, November 21, 2011

The NYT gets maybe half way there

The Editors, glorying in their anonymous collectivity, take on Medicare spending. They frame the issue correctly -- we need to rein in the growth in the cost of Medicare because we need to keep it universal and comprehensive. If the cost of Medicare continues to grow faster than the economy, it will grow harder and harder to convince the public to continue to pay for it. (Of course, this is a matter of degree. The Editors point with alarm to the projection that Medicare will account for 16% of federal spending by 2021, which Is Just Unpossible! Well no, it isn't, we could do that. But maybe we won't.)

So, The Editors think we should carefully examine proposals to raise the eligibility age, make higher income seniors pay higher premiums, and introduce more "cost-sharing by beneficiaries to deter unnecessary use of medical care." They think all that might be good but they are cautious. Wrong, wrong, and wrong.

Raising the eligibility age would not save any money at all. It would mean that people age, say, 65-67 would still be paying for their health care some other way, or not at all. Since a lot of people are out of the labor force by then, not at all would be a very popular option. But what happens when people that age don't get any medical care is that as soon as they hit Medicare eligibility, they come right in and now Medicare has to pay for all the bad stuff that wouldn't have happened if their health care hadn't been on hold for a few years -- heart disease and kidney disease due to uncontrolled hypertension and diabetes, for example. Baad idea.

Making higher income people pay for their Medicare sounds reasonable, but it would be politically suicidal. The appeal of Medicare is that it's universal. If it becomes a program for low and moderate income seniors only, wealthy people will turn against it -- it will just be "welfare," and we know that's evil.

Cost sharing is an even worse idea because your average senior citizen obviously does not know which medical interventions are worth it and which are not. They'll consume less medical care and medications, but at least half the time, they'll make the wrong choices. Which could end up costing more in the long run.

Then The Editors say that "So-called premium-support or voucher plans come in many flavors — some good, some bad — and would need to be carefully vetted." What all of these plans mean is abolishing Medicare and giving people money to buy private health insurance. Exactly none of the flavors of this disgusting idea are good. Medicare -- a single payer system -- is much more efficient than private health insurance and costs far less to deliver the same benefits. It always will, because it doesn't make a profit for shareholders or multi-millions for its executives, doesn't have to market itself to compete with other payers, and has the market power (should it ever care to use it) to make the medical system behave more efficiently and deliver the goods for even less.

Having tepidly endorsed or at least tolerated all of the really awful proposals that are out there, they are all for payment reform to the extent of moving away from fee-for-service to some form of capitated payment. That's okay although we have a long way to go to prove that it can work well. But, here's what they don't say.

We need to support cost effectiveness analysis and we need to direct resources away from doing stuff that just isn't worth it. Nobody wants to touch that because a former half-term governor of a state with a smaller population than metropolitan Boston will scream about death panels. That's a really stupid reason not to tell the people the truth.


josmary14 said...

Dear Stayin' Alive I agree with your point of view on Medicare spending. As you mentioned, it’ll be irrational to increase the eligibility rate; earlier access to medical treatments and resources improves health outcomes. Also, having a universalized health care program such as Medicare is more effective than different private health insurance programs due to the fact that disparities can be managed collectively. However I disagree on your opinion of rejecting the proposal made by the New York Times to make higher income people pay higher taxes to Medicare. In my opinion this is a great idea and I believe this proposal could work.

Cervantes said...

I agree it would be good public policy, but I don't think it would be good politics. But that's certainly debatable. Anyway, my main point is that we have to address the issue of cost effectiveness and allocation of resources eventually, and we just can't seem to go there.

Anonymous said...

Can’t go there because a health system that is geared to make profit (Medicare being only a part of the nightmarish US system) would lose money if the effects on the end-user were taken into account - instead of just the sale, or delivery of service. If the system was efficient, it would cost less, and there would be less profit.


Cervantes said...

That's basically right Ana, it's all about keeping the gravy train flowing. Obama did sneak the Patient Centered Outcomes Research Institute into the PPACA, however, so there's a foot in the door. Now maybe we can start to force it open.