Government should set the rules, not play the game
In the comments to my earlier post on health care, Wisewon, who's always worth reading on these matters, offered a fair critique of positing Medicare as the answer to our health-care woes:
Medicare is comfortable with just simple pricing pressures using leverage and calling it a day. So its not like a more rational compensation system is on the horizon -- particularly from Medicare. One underdiscussed topic is how far behind Medicare is around paying for outcomes. There are a number of payers that are moving much further in the direction that you suggest.
So ... you've got a proposal to push physicians to have patients in the 55-64 category be accepted via Medicare, using the hammer approach to reimbursement, rather than anything sensible that you've suggested. So even physicians that would agree that the reimbursement system should be reformed, could still reasonably be concerned with Medicare buy-in.
This is right, so far as it goes. Medicare isn't an innovative payer, and it's not doing the cool, wonkish stuff that policy types would like. If you're looking for an end to fee-for-service medicine, Kaiser Permanente is a lot further along than Medicare. Hopefully, the Medicare Commission, alongside some of the other delivery-system reforms, will change that. But the transition won't be quick, if it happens at all.
That, however, is why I emphasized the importance of bring the health-care system within the confines of a budget, rather than simply changing the way doctors get paid. There are plenty of other countries where doctors get paid for volume but the system is a lot cheaper than it is here. And statist though I am, I'm not confident that the government, or health wonks, really know how to design delicate policies that will change behavior enough to bring costs.
That's why I like the idea of caging the health-care system within a budget -- and it doesn't have to be Medicare's budget. It could also be a voucher plan that still uses private insurers, as Zeke Emanuel and Victor Fuchs have suggested.
The fact that the majority of the system -- workers and people on Medicare, and Medicaid -- don't feel the cost of their premiums makes it impossible to control costs. A budget that we actually stick to, for better or for worse, would force the system to spend something close to what we can pay. And I'm happy to let the private market figure out how to do that, or at least try to figure out how to do that. The government should set the constraints and the private market should decide how to live within those constraints. It's possible that that won't work in health care and more detailed interventions will be necessary, but we should at least give it a shot.
Photo credit: Li Ming Xz -- Imaginechina.
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