Tag: health care rationing

Obama’s Fiscal Commission and Health Care Spending

Following up on what Dan and Chris have said …

If the co-chairs of President Obama’s fiscal commission were serious about reducing federal spending and deficits, they would have proposed eliminating the federal deficit, rather than “reduc[ing] it to 2.2 percent of GDP by 2015.”  Yawn. They would have proposed cutting federal spending (currently, 24 percent of GDP and rising) to match federal tax revenue (currently at 15 percent of GDP).  But the co-chairs proposed only to “bring spending down to 22 percent and eventually 21 percent of GDP.”  Not only does that elicit another yawn, but since the co-chairs only asked for half a loaf, they won’t even get that much.

If the co-chairs were serious about reducing federal spending and deficits, they would have proposed a balanced-budget amendment.  They would have proposed block-granting Medicaid.  They would have proposed implementing Medicare vouchers immediately.  (Vouchers are the only way to reduce Medicare spending while protecting seniors from government rationing.  They would also change the political dynamics that repeatedly stymie efforts to reduce Medicare spending.)  Instead, the co-chairs propose the same ol’ failed strategy of trying to limit Medicare and Medicaid spending using government price-and-exchange controls, which they euphemistically describe as “rebates” and ”payment reforms.”  Along the same lines, they propose strengthening IPAB, ObamaCare’s rationing board.  IPAB’s mandate is – you guessed it – to ration care by fiddling with Medicare and Medicaid’s price and exchange controls.  It will therefore inevitably fall prey to the same political buzzsaw.  To appease Republicans, the co-chairs propose unwise and unconstitutional federal rules that would prevent patients injured by negligent physicians from recovering the full amount they are due (euphemism:  medical malpractice liability “reform”).  Finally, the co-chairs propose that if federal health spending continues to grow faster than GDP growth plus 1 percent, Congress should consider “a premium support system for Medicare” (which could mean vouchers) and “a robust public option and/or all-payer system” for people under age 65 – a debate that wouldn’t even begin until 2020.

Fiscal Commission members, congresscritters, and citizens who are serious about reducing federal spending and deficits – and who are looking for specific ways to cut government spending – should instead consult Cato’s excellent web site DownsizingGovernment.org.

My Overdue Response to Jesse Larner

Back in August of 2007, I issued a challenge to Jesse Larner, who blogs at HuffingtonPost.  One week later, Larner took up my challenge in a post that I’ve just finished reading.

Larner very graciously admitted to a couple of misstatements, and I must reciprocate.  I wrote, “I challenge Larner to show where a Cato scholar … describes America’s as a ‘free-enterprise system of health care.’”  Sure enough, Larner found an oped where one of my colleagues wrote, “I live in a country with a free-market health-care system.”  Obviously, I disagree with that claim.  But Larner was right, and I will have to look into this.

A few remaining areas of disagreement:

  • I wrote that Larner “claims that people don’t die on waiting lists in Canada’s health care system.”  Larner responds: “Actually, that’s not what I claimed. I claimed that people don’t often die on waiting lists.”  Canada’s Supreme Court writes that “in some serious cases, patients die as a result of waiting lists for public health care.”  Is some as many as often?  I hope not.
  • Larner: “the Canadian system has problems … [but] it worked better before a series of conservative provincial governments began to de-fund it.”  This isn’t the first time that advocates of socialized medicine have blamed its shortcomings on politicians who (supposedly) oppose socialized medicine.  But it is an inherent feature of such systems that they will inevitably fall into the hands of whatever viable political parties exist in that nation.  As I explained to Paul Krugman, “Unless you have a plan to abolish Republicans, they’re part of your plan.”
  • Larner writes: “a public health care plan is a public good.”  Public good is an economic term with a specific meaning.  A public health care plan is not a public good.
  • Larner: “is Cannon saying that we do not have rationing in the US?”  Hardly.
  • Larner: “In a free-market system, what mechanisms would prevent insurers from cherry-picking their customers, and denying coverage to those who are likely to require expensive treatment?”  The question presumes that insurance should do something that insurance cannot do: insure the uninsurable.  In this chapter of the Cato Handbook on Policy, I explain the (amazing) things that health insurance can accomplish, and why “health insurance markets are completely justified in not covering preexisting conditions.”
  • “So here’s my challenge to Cannon: show me a way that a true free-market system can provide decent coverage to everyone, regardless of ability to pay, without rationing.”  Elsewhere in his post, Larner acknowledges this is an impossible task.  In this magazine article, I explain that there is no way to reform health care that can guarantee that no patients will fall through the cracks.  In this Cato paper, I explain how a free market would minimize the number of people who do.
  • “Cannon is not in favor of universal coverage as a social right.” True, that.  “As a libertarian, he doesn’t even recognize the concept of social rights.”  I believe it was Friedrich Hayek who said there’s no better way to strip a word of its meaning than to place the word “social” in front of it.  Try it yourself .  I suggest using words like security, contract, justice, responsibility…

Medicare Fraud: 1, Anti-Fraud Measures: 0

As the nation contemplates the new health care entitlements that Congress and President Obama just created, it is worth noting an article in today’s Washington Post, which reports on the performance of past efforts to eliminate fraud in another health care entitlement:

More than a decade ago, Congress set out to squeeze the fraud out of Medicare billing at nursing homes, requiring more precise justifications for costs. It created new “ultra-high” billing categories intended to be used for only 5 percent of the patients needing highly specialized care and rehabilitation.

But within a few years, nursing homes flooded the ultra-high categories with patients, contributing to $542 million a year in potential overpayments, federal analysts found.

Since then, the numbers in the ultra-high categories have quadrupled, and the amount of waste and abuse could reach billions of dollars a year…

The article ends with the ominous implication that eliminating fraud in entitlement programs like Medicare will ultimately require government agencies to decide whether certain services are medically necessary.

Death panels, anyone?

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The Cost of Health Care

From a patient’s point of view, the ideal health insurance policy would offer unlimited access to medical services at no charge. Unfortunately, it is not feasible to offer this to everyone.

The key to sustainable health care reform is restraining the use of services that have high costs and low benefits, says Cato adjunct scholar Arnold Kling.  In the video below, Kling examines the challenges facing health reformers and the feasibility of alternative proposals.