Friday, April 15, 2011

Grandma Got Run Over By a Voucher

Frank Pasquale

The "sensible liberaltarian" blogosphere is debating the wisdom of turning Medicare into direct cash payments to seniors. I guess everyone's forgotten about the bargaining power of a public option like Medicare vis a vis increasingly concentrated providers. And hey, why bother with the boring big picture of health industry trends when you can spin out thought experiments about brave individuals risking cancer nontreatment by buying cheap insurance? Somehow the hypotheticals never specify whether those who "prefer" cheap insurance do so to buy a few more rounds of golf at the country club, or to find a dinner more satisfying than catfood.

Kudos to Ezra Klein for explaining some kinks in the voucher concept:

Let’s run through the cash-grant world: At age 65, grandma decides to purchase no health-care plan, as she figures she’ll just get one when she gets sick, or maybe just get one next year, or perhaps she just doesn’t want to spend money extending decrepitude. But then she has a stroke and gets rushed to the hospital. Someone is paying for that emergency care. It might be the hospital. It might be the taxpayers. But it’s someone: The paramedics aren’t going to refuse to lift her onto the gurney. And then she needs rehabilitation. Someone is going to end up paying for that, too. Or perhaps she gets leukemia and, in a display of consistency, doesn’t want heroic efforts made to fight it. But are we really prepared to deny her pain meds? Or hospice?

A Limbaughvian social Darwinist might deny the meds, but that position doesn't have much political (let alone moral) appeal. As Ryan Avent notes, the "plan is a good one right up to the point at which society is unable to tolerate preventable deaths on the sidewalk outside of the hospital for those who took it."

For a more serious consideration of the cost-control issue, check out Gregg Bloche's work. In his new book The Hippocratic Myth, he explores the rationing issue in some depth. He also looks at the promises and limits of more macro-level approaches to cost control:

The 2010 health reform law created a “Patient-Centered Outcomes Research Institute,” funded by levies on Medicare and private insurers, to sponsor such research. But the funding level, less than a tenth of a percent of what Americans spend on health care each year, will do little to increase the fraction of medical decisions that rest on science. And the Institute’s governing body — composed mostly of representatives from the hospital, insurance, and drug and device industries, as well as physicians — seems almost designed to enable stakeholders to block studies that threaten their interests. Moreover, multiple provisions in the law (sought by providers and drug and device makers) hobble Medicare’s ability to base coverage decisions on research the Institute sponsors.

Perhaps high health care costs are less a problem of "greedy geezers" than they are a function of a profit motive gone wild throughout the industry.

X-Posted: Concurring Opinions.

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