Health Care Reform: Harder Than It Needs To Be

by Stuart Shapiro

Controlling health care costs has become critical to the nation’s long term health and impossible politically at the same time.  If one thing puts our economy into a tailspin from which it cannot recover, it will be the contradiction of the above sentence.  Yet, ideas exist to deal with costs.  This week three of them got attention from various corners.  Joe Nocera wrote about halting Medicare payments for dubious treatments.

The strangest reaction, though, has come from the nation’s health insurers and the administrators of Medicare. Despite the clear evidence of Avastin’s lack of efficacy in treating breast cancer, they have mostly agreed to continue paying whenever doctors prescribe it “off label” for breast cancer patients. Avastin, by the way, costs nearly $90,000 a year.

Ezekiel Emanuel explained the savings associated with  bundling care.

This is “high touch medicine” or “concierge medicine,” not for rich people who can afford it, but for chronically ill patients who need it.

If high touch medicine offers additional monitoring and services, how can it save money? Arnold Milstein, now a Stanford professor, identified physician groups that were above average in quality but treated patients for 15 to 20 percent less money than average.

Finally the much-maligned supercommittee batted around the idea of premium support.

Members of both parties told the panel that Medicare should offer a fixed amount of money to each beneficiary to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government.

None of these ideas is perfect.  But all of them would reduce costs and possibly provide equal or superior care to what is now given.  The problem is that anyone who proposes them gets screamed at with terms like “death panels,” “rationing,” and taking away Medicare.  Until we can have an honest debate about ideas like these, we will move closer and closer to the precipice.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.