There’s No Choice but Change

There’s No Choice but Change

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The outrageous distortions about the Ryan Medicare reform plan are coming from people who are accelerating the program’s path to insolvency.

Medicare is being used as a piggy bank by Democrats, with $575 billion in payment cuts used to finance two massive new entitlement programs in Obamacare. And this April, the president proposed taking another $480 billion out of the program to lower the deficit.

Payments to providers will be cut so deeply that seniors will find it harder and harder to get care. Doctors will stop taking Medicare or go bankrupt. A whopping 87 percent of doctors say they will stop seeing or will restrict the number of Medicare patients they see, further shrinking the pool of providers and further restricting access to care.

The powerful, 15-member Independent Payment Advisory Board will use price controls to meet ever-elusive spending targets. Rationing is inevitable, especially of newer medicines and technologies.

House Energy and Commerce chairman Fred Upton explained, “Last year, Medicare expenditures reached $523 billion, but the income was only $486 billion — leaving a $37 billion deficit in just one year. And with 10,000 new individuals becoming eligible each day, it’s only going to get worse.”

Medicare is $38 trillion in the red, and it accelerated five years toward insolvency in just the last year, according to the Medicare Trustees’ latest report.

Sen. Marco Rubio captured it best in a new video, saying, “Medicare will go broke in as little as nine years … and anyone who is in favor of doing nothing to deal with this fact is in favor of bankrupting it.”

House Budget chairman Paul Ryan recognized that reality with his plan to begin modernizing the program, starting ten years from now. He wants to give baby boomers the option of private coverage in a plan that works much like the one members of Congress have today.

Access to coverage would be guaranteed, and payments would be tailored to meet a person’s age, health status, and income level.

Medicare is a government-run, politically-driven health-care program with so many gaps that people have to buy supplementary coverage. Not surprisingly, one fourth of today’s seniors have voluntarily decided to opt out of traditional Medicare by joining private plans in Medicare Advantage. These plans are competing for their business, offering better benefits often at lower costs to beneficiaries.

Rather than slashing this popular program as Obamacare does, it should be put on an equal and sound financial footing to continue to give seniors choices in the future. This model of seniors selecting from competing private plans is what Paul Ryan is proposing ten years hence, with premium-support payments to help pay for the cost of that plan.

Here are the facts of the Ryan plan: Paul Ryan’s plan does keep the payment reductions in Medicare under current law for ten years; he doesn’t use them to create two massive new entitlement programs but to preserve Medicare.

Beginning in 2022, beneficiaries are guaranteed a choice among Medicare-approved private health options. As the Congressional Budget Office notes: “Plans would have to issue insurance to all people eligible for Medicare who applied.” In other words, all Medicare beneficiaries are guaranteed that a health plan will be available for them.

This is in stark contrast to what would happen to Medicare under current law. Without a serious course adjustment, Medicare will become a third-rate, price-controlled program that rations a lower quality of care through waiting lines and other restrictions. If the antiquated, open-ended, fee-for-service model isn’t reformed, then we will continue to pour deficit-funded dollars into the program or raise taxes to levels that would topple the economy as millions of baby boomers hit retirement.

The only way to save Medicare is to change it.

This post originally appeared at National Review Online.

Grace-Marie Turner is president of the Galen Institute, a public policy research organization that she founded in 1995 to promote an informed debate over free-market ideas for health reform. She is the editor of Empowering Health Care Consumers through Tax Reform and produces a widely-read weekly electronic newsletter, Health Policy Matters.

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52 Comments on "There’s No Choice but Change"


Guest
Jun 30, 2011

Change is the only thing constant in this world, if you stay still, life would pass with all the great opportunities you can be presented along with it. Awesome post!

Guest
MD as HELL
Jun 26, 2011

Peter,

You are clueless.

Guest
Peter
Jun 23, 2011

“TriCare and the Blues all help themselves to a hefty discount. This simply has to stop.”

Wait a second, don’t you negotiate with TriCare and the Blues? Are they twisting your arm to sign their contracts? Why don’t you stop accepting Medicare/Medicaid if they’re so “unprofitable”?

Guest
MD as HELL
Jun 23, 2011

Right now my collections bear little resemblance to my charges. Medicare, Medicaid, TriCare and the Blues all help themselves to a hefty discount. This simply has to stop. There is no honest price in all of medicine because of the feds and their theft by legislation.

So when all must pay the real price, the real price will be a market price, and I will be competitive. Most ED patients have a choice of ED well ahead of any real emergency.

Guest
Peter
Jun 22, 2011

“I will be competitive.”

But aren’t you “competitive” now? And competitive to who, what, everyone else charging the same high prices? This is the hoax of “market driven heathcare”, it’s just a phrase, not intended to lower costs/prices, but just another false trail set up by the industry to pretend it wants to lower costs while keeping everything the same so it can keep calls for government control suppressed.

Guest
Jun 22, 2011

Don’t you also accept Medicare and Medicaid and get to save in a tax deducted 401k as well as deduct expenses from before taxable income?

Guest
MD as HELL
Jun 21, 2011

Don’t be obtuse. I will be competitive.

Guest
Peter
Jun 21, 2011

“You mindlessly infer that I am charging too much and paid too much.”

But you also say:
“Decrease the money chasing the services and the price per service will go down.”

Which would infer that you also think we are paying too much for everything medical. Just who’s pocket do you want to cut costs with if yours is not included in the, “price per service will go down”.

Guest
Jun 21, 2011

It’s not a question of emergency. It’s a question of “buy or die”, maybe not today, maybe not tomorrow, but soon and probably painfully too.
Other markets, healthy markets, allow for the existence of non-consumers by choice. Health care does not. “Bread” does not either and many empires went down in smoke when people couldn’t afford “bread”.
And no, health care is not exactly like “bread”, since last I’ve looked you don’t sell life preserving items for a dollar.

MD as HELL, while I do sympathize with your perception that you are not paid enough, I am forced to view your plight on the background of millions of people being unable to pay the current rates, let alone what you believe the rates should be. The “market” cannot bear your expectations without creating large segments of non-consumers, and since you are not selling luxury cruises, this is not acceptable. You may call this socialism, I would rather call it vintage American fair play.

Guest
MD as HELL
Jun 21, 2011

There are no healthy markets when the government is involved, such as wheat and food.

Thre are plenty of nonconsumers of healthcare. To assume that the mandate is necessary because everyone will use healthcare sooner or later is a shallow arguement. Each individual could save and grow a healthcare fund on their own were it not stolen by Uncle Sugar for his own politically favored classes of voters. Uncle sugar is not entitled to take what is mine and give it to someone else directly. If he is, then kiss the country good-by.

Guest
Jun 21, 2011

“Each individual could save and grow a healthcare fund on their own ”

Oh yeah, this is particularly true for small children of young parents just starting out….

“Uncle sugar is not entitled to take what is mine and give it to someone else directly”

Interesting…. do you feel the same way about Uncle Sugar paying for residencies?

Guest
MD as HELL
Jun 21, 2011

Peter,

It is you who get to use the hospital, nurses and equipment. I accept payments from the patients on Medicare and Medicaid, programs which steal a fortune every day from doctors and hospitals. As for 401k deductions, I hardly think that compares to the free money in a pension, public or private.

You mindlessly infer that I am charging too much and paid too much. Do you want me there or do you want a nurse practitioner with 18 months experience?

Guest
Peter
Jun 21, 2011

“I am not supported by either the hospital or the tax payor.”

You work in the hospital ER don’t you? If you do don’t you get use of hospital purchased equipment, services and hospital administration and nursing, which may also get public support and maybe tax deducted donations? Don’t you also accept Medicare and Medicaid and get to save in a tax deducted 401k as well as deduct expenses from before taxable income?

My point about firefighters was meant to show that what someone will pay during an emergency to survive is not a good judge of what the provider’s income and value is really worth – as you seem to prefer. No doubt you prefer negotiating the firefighters income/benefits at budget/tax time through your local government and not when they’re at your door on an emergency. I would gladly pay you out of my taxes and provide for retirement, negotiated at a non-emergency bargaining table with your doctor association.

Guest
Barry Carol
Jun 21, 2011

“Most health care does not involve emergencies.”

Exactly. That’s why we COULD have a market for healthcare services with adequate price and quality transparency tools available to both referring doctors and patients. If needed, we could also have special rules that apply to hospitals and other out-of-network providers for care delivered under emergency conditions.

Guest
MD as HELL
Jun 21, 2011

Are you a fireman? If you are then you spend most of your time being ready to fight a fire. You train a lot and learn new techniques and use new equipment. You also work for the government. You are paid by my tax money.

I am not a fireman. I spend most of my time being ready to save your bacon. While waiting for you and Margalit, I care for lots of arsonists and citizens alike with relatively less acute needs. I receive only money from bills that are paid. I am not supported by either the hospital or the tax payor. My income is about 40 cents on the dollar before taxes and insurance, thanks to five finger discounts and theft by legislation. I buy my own benefits, including retirement.

As for Margalit’s comment, I am sure you can see the intent of my remark. If you can’t, than actually explains a lot.

There really would be a market in health care. Most health care does not involve emergencies. Those of us in Emergency Medicine are not out to gouge anyone in a time of need. We just do not need to be abused either.

Guest
Peter
Jun 21, 2011

I’ll be sure to go out for quotes and interview eager practitioners.

How much are you willing to pay the local fire department to save your burning house and save your trapped kids? Care to go out for quotes?

Guest
Jun 20, 2011

“How much are you willing to pay a 29 year ER doc for saving your bacon?”

When put this way, it shows exactly why you cannot have a “market” in health care….