David R. Henderson writes:
The problem: Doctors cannot legally charge more for a service than the amount that Medicare pays, and Medicare often pays a low amount. That’s a classic recipe for a shortage of doctors.
The problem starts with the Center for Medicare and Medicaid Services (CMS), the federal agency that sets prices for the medical services of Medicare patients. CMS is really a giant central-planning agency. It sets hundreds of thousands of prices. What are the odds that it sets all the right prices? Zero. In fact, with central planning, an organization like CMS cannot ever know what the right price is.
An obvious solution to this problem is to have a free market in healthcare—with no Medicare. But since that is unlikely to happen soon, incremental changes can be made to move closer to a free market. Despite the socialized system of CMS, it’s possible to approximate free-market prices with “balance billing.” In its purest form, doctors would be able to charge whatever they want for their services, and patients would pay the difference between that price and the amount Medicare pays. Today, doctors who accept Medicare reimbursement are not allowed to charge anything more.
With balance billing, many fees would certainly increase—at least for those seniors who are willing and able to pay them. But it would also stem, and even reverse, the exit of doctors from Medicare. And that’s not all. As any health economist can tell you, one of the biggest problems with our healthcare system, one that existed even before ObamaCare, is that the majority of what people spend on healthcare is “other people’s money.” One reason we know so little about prices is that few of us actually pay the price of medical care. Instead, we pay nothing, a small co-payment, or a small percent of the price. The main thing I learned in my two years as the senior economist for health care policy with President Reagan’s Council of Economic Advisers is that health care costs so darn much because we pay so darn little for it. Why hesitate to say yes to a $500 test your doctor wants to order if you know that you will pay only $50 for it?
Read more: Medicare and the Free Market | Hoover Institution.
As Devon M. Herrick concludes his policy brief :
On paper, Medicaid coverage appears far better than what most Americans enjoy — with lower cost-sharing and unlimited benefits. But by almost all measures, Medicaid enrollees fare worse than similar patients with private insurance and often experience worse health issues than patients with no insurance. Wisconsin made a wise choice when it decided to forgo a full Medicaid expansion in favor of a smaller program that would maximize the availability of private coverage for Wisconsin’s low-income residents
Read more: Medicaid Expansion: Wisconsin Got It Right | NCPA.
More on the Medicaid ghetto here and here.
In Forbes, Paul Hsieh, MD writes:
Any government-funded health care system must necessarily set limits on medical spending. No government can issue a blank check for unlimited medical care for everyone. The only issue is where and how it draws that line.
This is an inherent part of any socialized medical system, such as in Canada or the UK. Put simply, if you expect “somebody else” to pay for your health care, then “somebody else” will ultimately decide what care you may (or may not) receive. …
Who should decide what care you receive towards the end of your life — you or an “administrative tribunal” of “experts and wise community members”? If you want to retain control over your medical care, you must retain control over your medical dollars. He who pays the piper calls the tune. Make sure the tune being called is the one you want.
via Who Decides What Medical Care You Receive At End of Life?.
From Peter Suderman at Reason:
The basic issue here is that when you cap prices on services, you end up creating a system in which providers have a huge incentives to bill for more services. As Brookings health policy scholar Dr. Darshak Sanghavi tells the Times, “The notion is you can make end runs around price controls by increasing the number of things you do and bill for.”
Indeed, pricing systems end up creating opportunities for consultants and middlemen to help doctors figure out how to maximize their billing
More: How Price Controls Contribute to High Medicare Bills.
Health care economist John C. Goodman writes:
Paul Ryan proposed a private health insurance alternative to Medicare for future retirees, liberal critics pounced. It’s another scheme to undermine health care for the elderly by “privatizing” and “voucher-izing” the program, they said.
Yet, almost one third of seniors are already in private health insurance plans. They are called Medicare Part C, or Medicare Advantage, plans. And you would be hard pressed to find any Democratic office holder who wants to abolish them. The reason? Seniors choose to be in these plans because they like them better than traditional Medicare.
Read more: Let’s Privatize Medicare – John C. Goodman.
“Obamacare Enrollment is Mostly Medicaid Expansion,” writes John R. Graham. This is bad news, considering the poor quality of medical care available to Medicaid enrollees and the rampant fraud.
The Medicaid Mess: How Obamacare Makes It Worse, by Avik Roy, Senior Fellow, Manhattan Institute
What Medicaid Fraud Looks Like: Mansions, Sports Cars, Klingon Battle Swords, and 30,000 Dubious Claims, by Peter Suderman, Reason.
How could a bloated government bureaucracy achieve such low-cost success? As we found out recently, it’s by quietly sticking veterans on a waiting list and putting off their treatment for months-sometimes until the patients are far too dead to need much in the way of expensive care. Which is to say, calling it a “success” is stretching the meaning of the word beyond recognition. And, while the White House insists it learned from press reports about the secret waiting lists, Press Secretary Jay Carney acknowledges that the administration long knew about “the backlog and disability claims” that have accumulated in the VHA.
The article begins:
Just a couple of years ago, Paul Krugman pointed to the Veterans Health Administration (VHA) as a “huge policy success story, which offers important lessons for future health reform.” He gloated, “yes, this is ‘socialized medicine.'”
Read more: The Veterans Health Administration Really Does Offer ‘Lessons’ in ‘Socialized Medicine’ – Hit & Run : Reason.com.