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Friday, December 23, 2011
Politics ... Public Policy ...

I have said several times here on my blog soapbox (and on my web site) that I think that a voucher system is the best way to get the health care cost crisis from ruining our economic future.  I wouldn’t say that vouchers are a “perfect” way, nor would I claim that a voucher system would have no side effects (most all good medicines have some).  But I do think that it’s the best of the list of messy options available for health care reform (this list includes notorious characters such as: do nothing at all as things continue to worsen; socialize all medical practice; socialize the payment system i.e. “single payer”; continue over-regulating medicine and insurance with overly complex, contorted, no-longer-understandable laws and myriad agencies – i.e., Romneycare, Hilarycare and now Obamacare; or get government completely out of medicine i.e. survival of the richest).  A voucher system can be tweeked in many ways as to promote economic fairness and maximize access to good health care. (I won’t say GUARANTEE ACCESS TO THE BEST HEALTHCARE, as most politicians do; I have higher standards of veracity than most of them, which still isn’t saying much these days).
 
So, I was rather pleased to see that Senator Ron Wyden, the thinking man’s Democrat when it comes to health care issues, has teamed up with GOP social program slasher Rep. Paul Ryan to promote a new plan for the overhaul of Medicare, one that relies heavily on vouchers to get costs under control.  I’ve only read the summary of the plan, I’m not familiar with all the details, nor the devils that no doubt lie within.  However, on the surface, it seems promising.  First off, it won’t affect people 55 and over (which includes me, to be quite honest!).  We will still get the old-fashioned, high-cost Medicare that everyone has come to hate and yet crave at the same time.  But younger people would face a choice between old-fashioned Medicare and a cost-indexed “insurance support system” that is basically a voucher to purchase a comprehensive health insurance plan. 
 
Actually, that’s not such a new thing; the Medicare Advantage program has been around since the GW Bush days as an option to all Medicare recipients.  Medicare Advantage isn’t exactly a voucher; there are just a few pre-set private insurance policies offered by a handful of private insurers, which Medicare pays directly once someone signs up.  But it still presents some limited competition and choice regarding what you do or don’t get at what price in meeting your health needs. 

Remember, good old-fashioned Medicare has a lot of gaps and co-pays too, some of which are filled under the Medicate Advantage options.  But, the Obama Administration does not like Medicate Advantage, and so the new health law cuts payments to insurers to general Medicare levels, even though about 19% of Medicare recipients signed up for it.  This sounds fair, until you realize that many medical care providers (doctors, labs, clinics, hospitals) take a loss on services under regular Medicare, and make it up by charging higher prices for younger, non-Medicare patients under private insurance.  The private insurers won’t have any incentive to participate in Advantage if they would have to play the same game as they now play with health care providers under old-fashioned Medicare.
 
I gather that the Ryan-Wyden plan would try to revitalize and expand the Advantage option, or something like it.  Although good old fashioned Medicare would still be available, I suspect that by 2025 or 2030, when the Ryan-Wyden plan would be in full swing, almost no doctors or hospitals would take regular Medicare anymore, given all the political pressures to control costs by lowering Medicare reimbursement rates.  I suspect that this plan foresees old Medicare ‘dying on the vine’, as most people move over to the new voucher system whereby they choose one of many plans (hopefully many) offered by private insurers.  These plans would all be regulated by the Medicare bureaucracy so that no one is denied an essential health care measure (again, though, I would hesitate to say “GUARANTEE that no one is EVER denied”; but hey, is good old fashioned Medicare perfect in that regard?  I suspect not).
 
Personally, I have a problem with the idea of forcing a voucher system on old people.  Vouchers only work if the users have the time to put energy into shopping around, finding out what the different insurers will and won’t cover and looking into their reputations as to how easy or difficult they are to deal with.  This is fine for a middle aged family shopping for car or home insurance.  But should we expect an 85 year old grandpa with declining eyesight and memory to spend a few hours on a web site pondering all the features of 10 different policies?  You might say that his family should help him; but the days when most 85 year olds had family networks to support them is gone.

A lot of people have already panned the Ryan-Wyden plan.  Some examples here and here and here. Basically, they don’t trust competitive markets, not even with government oversight. (Good old Paul Krugman went so far to say that “the [Ryan] voucher will kill people, no question”). Some critics say that vouchers won’t help to control medical care costs. That may be true in the short run, but in the long run they certainly could, if a new type of health care organization emerges, one that both guarantees a certain level of health care for a fixed price (like a health insurance company) and at the same time provides it. There would be incentive for entrepreneurs to find new and more efficient ways to provide health care if a truly competitive market for voucher revenue develops. Most importantly, entrepreneurs would come up with BETTER care techniques; government-based cost controls at best attempt to maintain current care techniques and levels, and often make things worse.

The Ryan-Wyden plan takes advantage of the federal debt crisis to introduce an important form of reform to the health care system. I’d rather see standardized federal vouchers introduced as a replacement for employer-based health care policies. But given the debt crisis, the political opportunity lies with Medicare. A voucher system could work for those over 65 who are still in good shape and have the mental and physical ability to do some reading and research to select the best medical care plan, and then adapt to the requirements of the particular provider arrangement that they choose (i.e., finding doctors and clinics and hospitals within their selected care network, and budgeting for whatever co-payments are required). For those too frail and feeble-minded to keep up with all this, a more socialized mechanism would be needed.

So, I would send Senator Wyden and Congressman Ryan back to the drawing board on this proposal. It has promise, but is not fully developed. But it’s a miracle in itself that a Democrat and Republican can agree on anything these days and work out a compromise blending elements from differing governing philosophies. I hope that Wyden and Ryan can craft a humane yet market-based scheme that controls costs while protecting and extending health lives for seniors; they got pretty close on their first try, and they should take it the rest of the way.

◊   posted by Jim G @ 10:50 pm      
 
 


  1. Jim, See your blog on Steve Jobs for my comment on the above. Once again I say: I plead either old age or an electronic glitch. MCS

    Comment by Mary S. — December 25, 2011 @ 11:54 am

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