The new Health Affairs is out and with it a lovely piece of vintage Vladeck.
In a review of a new book on Medicare by old Brookings warhorse Henry Aaron and fast rising UT Longhorn star Jeanne Lambrew, Bruce Vladeck soon turns off the main topic (their book) and onto his favorite–the inevitability of the outcome when Medicare tries to do something about health care costs, and the inability of the political system to do much about it.
Policy analysts make fun of politicians who claim they can balance the budget by eliminating "waste, fraud, and abuse," but with a straight face they then propose to control health care costs by making the system more efficient. Efficiency has hardly anything to do with it. What health care costs are all about is market power and the distribution of monopoly rents. Every other industrialized nation understands that and does something about it. U.S. providers and insurers understand it, too, which is why the more sophisticated providers resist any efforts to aggregate power on the buyers’ side. But the mainstream of U.S. policy analysis just doesn’t seem capable of even framing the question, let alone solving it.
Of course despite me convening panels with Valdeck on them a couple of times, he probably doesn’t think THCB is mainstream policy analysis 🙂
As I’ve been saying for a long time, to rationally rationalize the
health care system, we need to make cardiologists in Miami behave like
cardiologists in Minnesota with a consequent impact on the incomes of
doctors, hospitals and stent & speedboat salesman in high cost
areas (Yes, Jeff, I do mean Louisiana, New York, Los Angeles and Boston
too). If the Federal Health Board has teeth, that’s what it’ll do, and
the AMA, AHA, AdvaMed, PhRMA et al know it. Which is why the PhRMA front organizations have been railing against cost-effectiveness for so long.
We know the question. Sadly we also probably know the answer. Vladceck’s short piece is great fun, nonetheless.