American Elephants

How Do You Solve a Problem Like Medicare? Just Pretend. by The Elephant's Child

Democrats are ready and eager to attack Paul Ryan on the basis that “He wants to end Medicare as we know it.” Terribly tempting for Democrats, who have a long history of trying to scare seniors on the basis that their opponents want to take away their social security. And they’ve already started. The pushing granny in her wheelchair over the cliff ad is not recent. But as usual, they haven’t thought things through.

Seniors, God Bless them, are the parents of the boomers. They are completely aware that the kids they gave birth to turned into a huge generation that changed everything about America. For the last 60 years every advertiser has been catering to this immense generation, and every sociologist has been studying their every move. So warning seniors on Medicare that these hordes of  Post War Babies are about to destroy Medicare, as they started turning 65 last year, and will continue in ever-increasing numbers for 12 more years, isn’t really a surprise.

In 1945, the year the war ended, there were 2,873,000 births. In 1946, there were 3,426,000. In 1959, the peak year of the baby boom, there were 4,313,000. They influenced everything, not through any qualities of their generation, but simply because of their numbers. For a real look at the baby boom generation, see Landon Y. Jones: Great Expectations. It’s great fun, but important to understanding how their sheer numbers changed everything.

Social Security and Medicare were both premised on the same idea. Rising numbers of people paying in to the trust funds would provide for the smaller generation of seniors and provide a real safety net for everyone. At the same time that massive numbers of boomers got old enough to retire,  innovation and improvements in medical technology meant that people were living longer.

“Doctors,” says John Goodman who heads healthcare studies at NCPA, “are the only professionals in our society who are not free to repackage and reprice their services.”

In medicine, by contrast, no one ever sees a real price for anything. No patient. No doctor. No employee. No employer. Providers are paid based on rates negotiated in advance. And there can be a different payment rate for every third-party payer. Patients rarely see these rates. But even if they did see them, they are inconsequential to behavior, since the patient isn’t paying them anyway. Doctors, therefore, do not compete for patients based on price. And since they are not competing on price, they do not compete on quality either.

Everyone is left with perverse incentives. The patients’ incentive is to overuse and misuse the system, since they mainly pay for care with time and not money. The providers’ incentive is to maximize against the third party payment formulas. When everyone acts on these incentives, they do things that make costs higher, quality lower and access more difficult than would otherwise be the case.

The best thinking of the leading healthcare thinkers on the Left is” to double down and give us more of the same.”

That is, doctors would be even less free to compete for patients based on price and quality, patients would be even less likely to ever face a real price for any service, and perverse incentives would become even more perverse than they are now.

The Left has a long time obsession with suppressing doctor’s fees. It seems to be from not thinking too deeply about the nature of the problem. The cost of a major operation is shocking. Doctors are all rich, therefore the way to solve all problems of cost  is to cut back on doctors’ reimbursement.. The numbers of doctors dropping out of medicine, choosing to do something else is startling, and surveys of doctors say that large numbers plan to retire or quit — at the same time that there is a big shortage of doctors and medical schools cannot keep up with the need. The Left’s concept of the practice of medicine is not appealing to doctors who care about taking care of their patients.

So Paul Ryan is trying to save Medicare for future generations by reforming it, and because we have a little time before the biggest numbers of boomers hit 65, there are ways to accomplish this. Democrats want to:  1) Pretend there is no problem. 2) Pretend that Medicare will not be bankrupt in 10 years and kick the problem down the road. 3) Buy time by saving money by cutting medical providers’ reimbursement.  There are consequences to each of these ideas. There is a real problem — bankruptcy in 10 years. We can’t afford to wait, for it shortly won’t be fixable. Cutting back on reimbursement to medical providers means people on Medicare or Medicaid will have a harder time finding a doctor who will see them. This is already happening and will only grow worse.

The Left’s other big idea is to cut back on the expense caused by people in their final years. Limit services, refuse operations, limit treatments to what is cost effective. Not promising.

ObamaCare took $716 billion out of Medicare to fund ObamaCare between 2013 and 2022. ObamaCare contains more than 160 provisions that impact Medicare. Obama’s claim that his new law is protecting seniors and protecting Medicare is absurd. But then ObamaCare has always been a fraud.

You will be hearing lots about how “radical” Paul Ryan’s plans are:  Julia, they said, would be dead and in her grave. Romney, the Obama campaign said, murdered Joe Soptic’s wife, now Paul Ryan is intent on killing off all the old folks.  Gutter politics. Keep in mind the simple fact that the Left offers no solutions, no ideas, and prefers to ignore an all too real problem.


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