POLICY: Now let’s remember a few basic things about Medicare, single payer, vouchers et al, with brief UPDATE

Well either the doppelgangers are firing off or a few people have been reading this blog or the Jungian collective unconscious is working. In any event several of the issues about single payer versus vouchers that have been raised here have been echoed elsewhere.  First Fuch’s co-author Zeke Emmanuel in a guest spot over at Washington Monthly in response to Kevin Drum (the host there) spends some time explaining how insurance organizations (plan sponsors, an intermediary layer, call it what you will) could actually provide some innovation and be allowed to compete over that, rather than risk selection.

May be so, but there are two obvious points. First, there’s no reason why competition amongst that intermediary layer need not be controlled by a single payer system — something like that is starting out in the UK now.  My major point is that a quick Medicare-for-all legislative rush which puts us in one big risk pool is much more politically likely than an attempt to create a formula that gets us to perfect risk adjustment which Congress will pick to death while it’s legislated.  Second, Emmanuel reckons that we won’t get to single payer without a national crisis (and I agree) but then he thinks that the voucher system is palatable enough to somehow sneak past the special interests in the absence of said crisis. I don’t think so. Significant universal insurance reform will be so difficult to do that it’ll need a national crisis.  But then I’d call, say, 80m uninsured Americans a national crisis — or at least one that may show up politically if enough of the uninsured are male Republicans in the south –and we may well get there if current cost trends continue.

Zeke also reminds us that Medicare isn’t such a great program either, and I completely agree. Medicare is basically a welfare program for hospitals and providers, and soon to become one for drug companies too. It’s the fact that it doubles as a way to stop old people from being unable to afford hospital care and thus from dying in the streets that gives it such popularity.  But that income protection for seniors part of it can be preserved while making the overall program better. First off, the amount of money paid to those provider organizations can be reduced (and will be), but they need to improve their productivity and stop delivering "flat of the curve" medicine (i.e. more money with no comparable output). Some hints in this direction include implementing some of the lessons from the Dartmouth crowd’s work on overuse of resources in ICUs. The other part about Medicare is that it can be used as a force for good and to foster innovation. With all its warts that’s what P4P is all about, and I don’t see why Medicare is worse at doing that than private health insurers, which anyway tend to follow its lead.

Finally, I’d like to remind all parties that the gulf between the universal insurance crowd and the single payer crowd isn’t so big, as they both have everyone covered and everyone in a single big risk pool (called America). And with some variations, the Europeans show us that multi "intermediary" systems such as the ones in the Netherlands, Germany and Switzerland can be very effective.

UPDATE: Jonathan Cohn, who seems to be giving it away over at TMPCafe these days instead of selling it at TNR, has some pretty sensible points to make about the eventual similarity between universal insurance and single payer.  He doesn’t quite get to my logical conclusion — which is that we get to some type of government-funded quasi-competitive regulated market via an extension of Medicare’s single payer model — but I think he’ll be there eventually.  And I think he’s in some agreement with me about the politics of all this. i.e. Life has to be really bad and this has to be done once and quickly…..Gramsci called that Fortuna et Opportunta, or waiting for the time to be right and then giving the right legislation (or revolution in his case) a big shove.

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13 replies »

  1. theorajones,
    My Mom lives in Ames. That’s where they pick the leader of the free world at Hilton. It’s not fair but somebody has to do it. Let me understand if I’m understanding you correctly. Are you suggesting that Governor Jeb Bush go to Ames and in the first debate for the next President in ’08 and say, “I know Iowa is the second state in America in percentage of citizens over the age of 85. I understand you have a very fragile population and incomes are a lot lower here than in New York City. I understand you have the lowest Medicare reimbursement rates in America and HMOs refuse to open shop here and hospitals are closing their doors. I know that your Medicare part B premiums combined with your Medigap plan costs many couples $500 a month and in beautiful Tampa Bay the Feds pay so much that seniors have no costs plus RX coverage and health club memberships. But this is all justifiable if you consider statistics from theorajones. As a matter of fact she says we should spread Medicare’s discrimination to all the people of Iowa because you’re just the general public and special interests can tweak a system better than a bunch of hay seeds like you, get real.
    In conclusion I want to address this to Ron’s Mom. You sould get the new Medicare Rx benefit for $35 a month in addition to all of your other premiums in Medicare. We want as much money as we can get in that system so golfing couples in Tampa Bay can get their Viagra covered by federal Medicare funds too. And you really should consider just packin’ up and moving down to Florida before the predicted Baby Boomer rush into the state. You will make more each year with the inflation in your home than the average young Iowa couple makes working for a living. Vote for me because I’m the hurricain and soonamee Governor.”
    I know these Iowa people and they will just listen to Dr. Neil Harl, head of international economics, there at ISU. You would call him a right-wing-nut case because he would say something like, “Competition is critical is free and open markets.” He told me, “If a reporter from the Des Moines Register did an article on the tax-free MSA they would be fired. And my son now lives in Denver with his PHD from Harvard in economics.”
    If I was advising Jeb about those Ames people I would have him say, “I’m a strong supporter of my brother’s tax free HSA. I got HSAs in as an option for state employees in the state of Florida. I believe in more options, more choices, more freedom in Medicare, including tax free HSAs.
    And if I’m elected President I will call for a “Resolution To Apoogize” — 50 years in advance — for failing to pass any legislation to reform Social Security, reminicent of the Lynching Apology. Vote for me so we will have Bush Presidents for 16 years straight in America.”

  2. Sure, Ron. It is a rank injustice that New York gets more money to care for Medicare patients than does Des Moines. Gosh, is there a difference between New York and Des Moines?
    And hey, if you’re arguing that states should get back from the feds what they give, I really don’t think you’ll get much argument from New York, which sees 16 cents of every dollar it sends to the feds distributed to other (mostly red) states. And as a Florida resident, you seriously need to stop harshing on California–their taxes are subsidizing your lifestyle!

  3. You know, that whole discussion at Drums’ place really moved me over into the “we need to argue for Medicare for all” camp which, to be perfectly honest, is someplace I never expected to be.
    I agree with what you’ve posted above, and would like to add one additional point. From a policy perspective, it’s far easier in the US to privatize than to un-privatize. If we really start missing insurance companies, it’s not like it would be too terribly difficult to start up a Congressionally mandated demonstration and then expand it. I’m certain that there’d be a few lobbyists more than willing to draft some legislative language…
    From a realistic perspective I think that in the context of a national crisis a “Medicare for all” public consensus wouldn’t actually eliminate insurance companies–the sausage-making process would leave us with some sort of hybrid system. But you know, even if that didn’t happen and we instead ended up with a “Medicare for all” system, that’s really not a bad place to begin. It’s easier for special interests to tweak a system than it is for the general public, you know?

  4. Exactly Abby,
    California, where they say they have it all
    They got riots, fires and mud slides
    They got sushi in the mall
    Shake and bake with the quakes
    And Democrats run amuk
    Are you a vegan Matthew or a pretenditarian?

  5. I came out here for Berkeley, and I was sorely disappointed to find I missed the Free Speech Movement by over a decade and now the students all belonged to business organizations and carried cell phones. 🙁

  6. Matthew,
    I’m sure you’re quite clever, but California is such a screwy state. I think people who choose to move there must be a bit mad, not that cleverness and madness must be mutually exclusive.

  7. Now that you’re quoting Gramsci, can we start talking about health industry Hegemony?

  8. Ron,
    That made my day. You can’t move, because you have to take care of your neighbors’ plants. I love it!

  9. My “mum” has already been saved by the Mayo Clinic in Rochester, Minnesota. In Iowa they didn’t have a clue. I’m not saying care is better in Florida either. Todays Tampa Tribune is reporting that a dermatolgist here is finally barred from surgery. He was diagnosing everyone with cancer for Medicare reimbursements. He operated on one man 122 times.
    If you google Medicare Savings Accounts your friend Dan Parrin pops up first and says, “Insider: Medicare Savings Accounts can now be offered by law, by insurers to seniors. The problem is that while the law that allows it, it also puts significant constrains on the insurer that, I believe, means no insurer will offer a Medicare Savings Account.” He doesn’t say what the problem is but I think it is that providers are not resrtricted to Medicare discounts. So this can be fixed if anybody cares. We agree on Medicare private plans (HMOs).
    I work all over but I live in Tampa Bay. I can’t leave because my neighbors are from England and the government has kicked them out of the country at least until October so we have to take care of their plants. They Email us complaining about the perpetual rain over there and how much they miss the Sunshine State. We are knee deep in Brits down here.

  10. Ron, this is a function of the way Medicare HMOs get their, money which is based on overall Medicare costs in that area, which are a function in turn of provder behavior. Florida has the most expensive end of life care because a combination of medical culture and Medicare incentives allow it. If Florida docs were forced to behave like docs in Minnesota and spend 2/3 less resources on end of life care (with actually better results!), Medicare would cost less there, and therefore the payments to private plans would be lower (and save the taxpayer money). I agree that the private plans in Medicare system now is nuts, but it’s the fundamental changes in payment incentives to providers that are needed, and they can be done from within either a regulated private system or Medicare. And not an HSA in sight….
    BTW shouldnt you be in Iowa and your mum in Florida? havent you got it the wrong way around?

  11. The problem with Medicare is that it discriminates against certain states. In Iowa my mother doesn’t have an HMO option in Medicare like we do here in Tampa. My mother pays $171 a month for a Medigap insurance plan and $78 a month for Medicare part B. Of course her coverage doesn’t pay for Rx either.
    In Tampa Medicare pays so much to Medicare HMOs that they are advertising that there is no cost to enroll and no monthly premiums and the HMO will pay the $78 a month for the part B premium and also covers Rx. My Mom would save $249 a month plus her Rx costs by moving here under the palm trees. For a couple that would save them $500 a month plus their drug costs. These Tampa HMOs should be advertising in Des Moines, Iowa suggesting that couples should move to the Sunshine State and save enough to purchase a new Hummer.
    Iowa politicians are going crazy because everybody pays the same Medicare tax, yet Boston, New York City and Tampa get huge Medicare reimbursements and Iowa gets the lowest in the Nation. It’s kind of silly that HMOs are suppose to save money yet tax payers pay so much more for them. Oh yea, I forgot to mention in Tampa you get a health club membership too.
    One big pool doesn’t really help if certain states are discriminated against because they have less political pull in the House of Representatives.
    Maybe Hillary Clinton will go to Iowa and support Des Moines getting as much as New York City in Medicare reimbursements. I don’t really think she will want to discuss that discrimination. New York City HMOs are making money hand over fist in Medicare.
    If we do have “Medicare for All”, like Senator Ted Kennedy wants, everybody might as well leave the state of Iowa and move to Boston so they can have medical coverage. Last person out of Iowa please turn off the lights.