NOW IMAGINE NO VOUCHER...:

Ending Medicare 'As We Know It' (Robert Samuelson, 6/06/11, Real Clear Politics)

[T]wo things are clear.

First, as Medicare goes, so goes the entire health care system. Medicare is the nation's largest insurance program, with 48 million recipients and spending last year of $520 billion. About 75 percent of beneficiaries have fee-for-service coverage. If Medicare remains largely fee-for-service, the rest of the system will too.

Second, few doubt that today's health care system has much waste: medical care that does no good; high overhead costs. In a paper, Cutler documented some evidence. In one survey, 20 percent of patients reported that doctors repeated tests because records were unavailable; the health care sector has twice as many clerical workers as nurses and nine times as many as doctors; care of patients with chronic conditions is often slapdash, so that, for example, only 43 percent of diabetics receive recommended treatment.

Fee-for-service is open-ended reimbursement; the government's main tool to control Medicare's costs is to hold down reimbursement rates. Doctors and hospitals respond by ordering more services to offset the rate limits. For all its flaws, say Ryan's critics, this system beats his. Indeed, the Congressional Budget Office has estimated that in 2022, Ryan's plan would be more than a third costlier than the status quo, because Medicare's size makes it more effective at restraining reimbursement rates.

If CBO is correct, Ryan's plan fails; beneficiaries' out-of-pocket costs would roughly double to cover the added cost. But CBO may be wrong. When a voucher system was adopted for Medicare's new drug benefit, CBO overestimated its costs by a third; the Centers for Medicare and Medicaid Services' overestimate was 42 percent. When fundamental changes are made to a program, the green eyeshade types can't easily predict the results. Moreover, as health expert James Capretta notes, "managed care" plans in the Medicare Advantage program in 2010 did not have higher costs than Medicare's fee-for-service for similar coverage.

Under Ryan's plan, incentives would shift. Medicare would no longer be an open ATM; the vouchers would limit total spending. Providers would face pressures to do more with less; there would certainly be charges that essential care was being denied.

...and, instead, you have to draw down money from your own HSA to pay for this nonsense.

Posted by oj at June 6, 2011 5:21 PM
Tweet   

Follow @brothersjudd