Strengthening Constitutional Self-Government

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Patient-Centered Vs. Bureaucrat-Centered: The Battle Of The Decade

"Our approach lowers the government's health care bills by reducing the cost of health care itself. - President Obama on Wednesday.

This gets to what will be one of the most important arguments that we are going to have about health care and entitlement policy.  As Yuval Levin explains, President Obama believes that American health care can become more affordable, and fairer by having a group of bureaucrats decide what procedures are paid for and what the cost of those procedures should be.    

Conservatives need to hit this very hard and constantly.  This isn't about whether we spend less on Medicare.  President Obama wants to cut Medicare.  President Obama has already cut Medicare by hundreds of billions and is now proposing another cut of over a trillion and he is not done yet (wait until the cuts he proposes if he gets reelected.)  This is about how we structure an affordable Medicare system. Obama wants to empower bureaucrats to tell you what services you will get.  They will sometimes deny you services by just telling you no.  They will sometimes deny services by setting arbitrary waiting lists.  They will sometimes deny care by under reimbursing healthcare providers so that seniors will not be able to get appointments.  Obama will try to argue that you will then have the option of paying for whatever care the government refuses, but that isn't really true.  In a health care system where providers are oriented to the government as the main client, individual elderly consumers will be marginal and the costs of procedures in a such a bloated and inefficient system will be prohibitive.  You will have nowhere to go after the government bureaucrat tells you no.  That is what we have to look forward to under Obama-style entitlement reform (along with higher taxes, lower growth, fewer jobs, blighted futures for the young...)

In a consumer-driven system, companies would compete for your business by developing lower cost business models that can offer the same level of care at a lower price (my personal caveat to this is that such an approach would work best if there was an even more consumer-oriented health care system for those under 65 years old.)  If you don't want to pay extra to cover a high cost, low success rate procedure, you have more money in your pocket.  In a bureaucrat-centered system, they just tell you no and you are not even financially better off for being forced to forgo coverage.

There are several political problems with consumer-oriented and patient-centered health care reform (low levels of public comprehension, the lack of interest in such policies on the part of much of the right-leaning populist media), but one of the biggest problems is that it is counterintuitive (if you spend more out of pocket, you can end up with more take home pay etc.)  The best argument in favor of consumer-centered and patient-centered health care is real life experience.  That is why it would be very helpful if the Republican presidential nominee who stands up for patient-centered health care reform has a record of instituting patient-centered policies that save the government money while maintaining access to health care.

Run Mitch Run.   

Categories > Politics

Discussions - 2 Comments

Just to be clear, we're talking about eliminating health insurance now and just basically letting/making people buy health services a la carte? Because there's no problem with "bureaucrat-centered" health care that you describe here that isn't true of bureaucrat-centered private health insurance. I don't really see the advantage of private bureaucracy over public bureaucracy, frankly. But I also don't see the advantage of not having money for health coverage when an emergency strikes that far exceeds what's available in my health savings account. What am I missing?

Joel, within a more widely liberalized health care market (a component of which would involve converting Medicare into a defined contribution program), providers would be oriented toward producing lower cost alternatives and consumers would have the option of not paying to cover some procedures, and in return having lower premiums and more take home pay. As Capretta and Miller describe their preferred health care reform (which I prefer to the version in Ryan's Path To Prosperity), the government would define a base coverage and companies would compete to attract customers based on their premiums and coverage (and premium support would vary according to the situation of the particular senior.) Some plans would offer more coverage than the government-defined base and customers could choose to pay more to get the extra coverage. Or companies could build provider networks that allowed them to offer more coverage at competitive premiums. Either way, seniors could calculate the marginal utility of extra spending on health care coverage by comparing benefits, risks and costs of expanded coverage vs. alternative uses for the money. A government-dominated system just tells you no and you are no better off. We are not however talking about an HSA-type system for this population (though it would probably be advisable for other populations.) We are talking about putting a limit on total spending, but we are going to get that anyway.

I do have concerns about Ryan's particular approach which I have mentioned elsewhere.

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