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| Issue #9, August 7, 2006 |
Keep Medicare Bureaucrats Out of "Pay for Performance"
Americans pay for a lot of low-quality medical care because third-party payments are typically blind to quality. In fact, providers are often paid more when they deliver low-quality care. Since 1994, private insurers in the United States have tried to correct this by giving physicians and hospitals financial incentives to provide high-quality care. Though "pay for performance" (P4P) can sometimes improve quality, no third-party payer can define quality for patients with diverse conditions and preferences.
Recently, the Centers for Medicare & Medicaid Services has experimented with P4P financial incentives directed at providers. But in a new study, Cato's director of health policy studies Michael F. Cannon argues that the Medicare bureaucracy should stay out of P4P. In "Pay-for-Performance: Is Medicare a Good Candidate?"—due to be published in January by the Yale Journal of Health Policy, Law, and Ethics—Cannon argues that a scheme administered by CMS would undermine the benefits and exacerbate the potential harms of P4P. According to Cannon, Congress can harness the potential of provider-focused P4P incentives while reducing the likelihood of harm by confining P4P to private Medicare Advantage plans and by encouraging greater participation in those plans.
Praise for Crisis of Abundance
Arnold Kling's Crisis of Abundance was selected by the National Chamber Foundation as recommended reading for executives, as well as by the Manhattan Institute for inclusion in its summer reading list. On Tuesday, August 29, the Cato Institute will host a book forum for Crisis of Abundance (additional information below).
Cato Scholars Challenge the Left and the Right at Cato@Liberty
Since the Cato Institute launched its blog Cato@Liberty, Cato health policy scholars have argued for greater individual liberty against scholars from both the left and the right of the political spectrum. Highlights include:
- Michael F. Cannon debates health savings accounts with Matthew Holt of The Health Care Blog, and with Michael Hébert of Doctor Hébert's Medical Gumbo.
- Cannon spars with Stuart Butler over the latest Heritage Foundation proposal.
- Cannon debates the Citizens' Health Care Working Group with The American Prospect's Ezra Klein.
- Cato scholars Michael Tanner and Arnold Kling debate why Americans spend so much on health care.
- Cannon turns to Medicare reform with Matthew Holt, who calls Cato "the thinking man's libertarian think-tank."
Visitors to Cato@Liberty can also read posts on the protectionist policies of the American Medical Association, Congress's misguided attempts to create electronic medical records, protecting the right to conscience for health care providers, and the growing costs of Medicare and Medicaid.
The Independent Reviews Healthy Competition
The Summer 2006 issue of The Independent Review reviewed Healthy Competition: What's Holding Back Health Care and How to Free It, a book by Cato scholars Michael Cannon and Michael Tanner. Robert L. Ohsfeldt a professor of Health Policy and Management at Texas A&M University, writes that Healthy Competition is:
... [I]n Healthy Competition, Michael F. Cannon and Michael D. Tanner provide a concise and highly readable summary of the evidence refuting the case against market competition in health care... Cannon and Tanner... provide a valuable service by accumulating the evidence that demonstrates that although health care is not the "same" as personal computers or household appliances, it is not so "different" that market forces cannot work to consumers' benefit.
Read the full review here.
Locke Foundation Praises Cannon on HSAs
In a June 20, 2006, article in the Carolina Journal, John Hood, president of the John Locke Foundation, comments on a recent Cato Policy Analysis titled, "Health Savings Accounts: Do the Critics Have a Point?"
Michael Cannon, director of health policy studies at the libertarian think tank, has produced one of the better policy studies I've read on any subject in a long time. It takes the concerns of critics seriously – studying carefully and then rejecting some, studying and agreeing with others, and proposing changes that will make consumer-driven health care make more sense for more Americans over time.
Read the review here and the Policy Analys is here.
Briefing on the Massachusetts Health Plan Available Online
On May 23, the Cato Institute held a Capital Hill briefing entitled "Is the Massachusetts Health Plan a Model for the Nation?" Len Nichols, of the New America Foundation, and Ron Pollack, of Families USA, met with Cato scholars Arnold Kling and Michael Tanner to discuss health care reform in Massachusetts. While all agree that access to health care is an important issue, mandating health insurance limits choice and inhibits innovation in the health insurance market. The briefing is available as video, audio and as a podcast.
Cato Podcasts Highlight Health Care Issues
Since launching a daily podcast service in May, Cato’s scholars have weighed in with pdcasts on various health policy issues. Recent commentary includes:
- The Future of Medicaid, featuring senior fellow Jagadeesh Gokhale
- Sicko and Tired of U.S. Healthcare? featuring Michael F. Cannon
- A Critical Look at Health Savings Accounts, by Michael Cannon
- Massachusetts Misses the Mark, by Michael Tanner
Also available on May's CatoAudio compilation, Tanner and Cannon discuss the new Massachusetts health insurance mandate and offer better ways to reform health care (available individually or by subscription).
Upcoming Cato Institute Events
Crisis of Abundance: Rethinking How We Pay for Health Care
Book Forum
Tuesday, August 29, 2006
Cato Institute
Featuring the author, Arnold Kling, Cato Institute adjunct scholar and adjunct professor at George Mason University; with comments by Sebastian Mallaby, editorial writer and columnist, Washington Post, and Jason Furman, visiting scholar, New York University. Moderated by Michael F. Cannon, director of health policy studies, Cato Institute. Click here to register.
Recent Cato Institute Media Appearances
"Research Will Continue, With or Without Federal Funding," by Michael Tanner, San Francisco Chronicle, July 19, 2006.
"How about some healthy competition?," by Michael F. Cannon, Philadelphia Inquirer, June 28, 2006.
"Stop Doing What I Said," by Radley Balko, TCSDaily.com, June 23, 2006.
"Whose Life Is It, Anyway?" by Roger Pilon, Wall Street Journal, June 3, 2006.
"Scrutinizing the Rights of the Terminally Ill," by Mark Moller, WashingtonPost.com, May 9, 2006.
Healthy Competition is a periodic newsletter produced by the Cato Institute. It features news and commentary on current health policy issues from a free-market perspective. If you wish to subscribe to this free newsletter, update your address, or be removed from our list, please click here and follow the instructions. Send feedback to healthycompetition@cato.org.