First, read Greg Mankiw's expalination of how supply and demand affect healthcare reform:Here are some basic principles of supply and demand: If a government policy increases the demand for a service, the price of that service tends to rise. If the government prevents prices from rising, shortages develop. The quantity provided is then determined by supply and not demand. In the presence of such excess demand, the result could be a two-tier market structure. Consumers who can somehow pay more than the government-mandated price will be able to purchase the service, while those paying the controlled price may be unable to find a willing supplier.Then read this:
A plan to slash more than $500 billion from future Medicare spending -- one of the biggest sources of funding for President Obama's proposed overhaul of the nation's health-care system -- would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday.
The report, requested by House Republicans, found that Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.
Congress could intervene to avoid such an outcome, but "so doing would likely result in significantly smaller actual savings" than is currently projected, according to the analysis by the chief actuary for the agency that administers Medicare and Medicaid. That would wipe out a big chunk of the financing for the health-care reform package, which is projected to cost $1.05 trillion over the next decade.
More generally, the report questions whether the country's network of doctors and hospitals would be able to cope with the effects of a reform package expected to add more than 30 million people to the ranks of the insured, many of them through Medicaid, the public health program for the poor.
In the face of greatly increased demand for services, providers are likely to charge higher fees or take patients with better-paying private insurance over Medicaid recipients, "exacerbating existing access problems" in that program, according to the report from Richard S. Foster of the Centers for Medicare and Medicaid Services.
Though the report does not attempt to quantify that impact, Foster writes: "It is reasonable to expect that a significant portion of the increased demand for Medicaid would not be realized."
1 comment:
First, a single payer system would be the best way to go, but it is not politically possible. What a shame.
Second, I still note that critics of the proposals have no alternative. Yet the status quo is not acceptable, although it someone thinks it is, I'd like to hear the argument.
Third, health care, even in the US, is not some typical free market like the market for soft drinks or television sets. The economics are entirely different, as written about perhaps best by Nobel Laureate Ken Arrow.
Fourth, critics don't seem to care about the millions that would actually gain health insurance. Even that study in cited in the WaPo article concedes that. And let's face it, there are so many studies out there, and of course, each side touts the findings that benefit their argument. That same study has opinions that the Democrats can run with.
Firth, at it's root, this is also a moral issue. As TR Reid, the author of "The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care" notes, in our country, the moral argument always gets lost amid the noise about details: insurance company employment levels, hospital reimbursement rates, malpractice premiums, etc. Other industrialized democracies got to universal coverage by starting with a moral decision.
Here's what we do know: the status quo is unacceptable, and has a huge human cost. We know other advanced countries achieve better results for less money with universal health care. At the very least, we can learn from them. If someone has a better idea, I'd like to hear it, rather than just criticism of the proposals out there.
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