Paul Revere is in his 20s, and is concerned about the impact of the growing national debt on his generation. Not much younger than when his namesake made his historic ride, he works in the wake of a tea party to warn his fellow patriots of impending doom - unless they exercise the courage to act now. He will be posting regularly at ConservativeHome on spending issues to encourage his fellow patriots to find that courage.
Now that the repeal-and-replace Obamacare debate is under way, we should turn our eyes to America’s entitlement problem so that the two discussions can run side-by-side. We will never tackle our deficit crisis as aggressively as we need to if we don’t get more serious than most congressional members seem willing to be about entitlement reform.
We should be pursuing both health care reform (e.g., taking on Obamacare) at the same time we are tackling Medicare dysfunctions, guided by common principles such as eliminating waste, lowering costs through competition in a marketplace, and ending special interests in health care.
Here is a list of where we could be most aggressive:
- Institute Mayo/Dartmouth Atlas-style payment reform to Medicare. Approximately one-third of Medicare (nearly $150 billion) is inefficiently or fraudulently spent, and much of that is due to the payment system Medicare uses. Currently, doctor reimbursements encourage a higher quantity of care as opposed to a higher quality of care. Incentivizing doctors to follow up with patients post-visit; look at alternatives besides specialized surgeries and operations; and to work with a team of doctors instead of one doctor who may not have the breadth of knowledge necessary to deal with a patient’s health issues will not only save money but also increase the quality of each patient’s medical experience. There are certain weaknesses to this approach, particularly how it puts government officials in charge of how medicine is practiced. Since Medicare is already a government-run program and is not going to be eliminated anytime soon, however, we might as well put those government officials toward a more effective practice of medicine.
- Institute medical tort reform. States such as Mississippi, Arizona and Texas have enacted tort reforms in recent years, and it has been a boon to the states. While tort reform is certainly not the be-all end-all of our medical costs in this country, it will have a measurable impact. The New America Foundation’s Shannon Brownlee, in her 2007 book Overtreated: How Overspecialization is Hurting America, says tort reform would only save about one percent on annual costs, and a CBO estimate said tort reform would save $5 billion per year in Medicare, but I suspect those estimates are low. A 2010 Health Affairs symposium on tort reform, for example, had various estimates on the impact of medical tort reform, eventually averaging out at $55 billion in savings per year— equivalent to 2.5% of all health care spending in America. Other estimates in this 2009 article critical of conservative support for tort reform range from $20 billion to $60 billion annually, and 1.5% of annual health care costs in America. This is real money.
- The Washington Examiner’s Tim Carney wrote a column in early 2010 entitled “Down with the health insurers.” I could not agree more. Rather than work in a market dictated by customers, prices and competition, the health insurance industry works in a market dictated by government mandates, special favors and an exemption from monopoly laws created after World War II. Related, the insurance industry is allowed oligopolistic control of individual state health care costs and coverage, since a proper interstate market of health insurance does not exist due again to special favors from the federal government. This must end, and market-based competition must again thrive.
- Change both the existing and the health care law-based employer exclusion tax laws. Currently, the individual health care market is paid for with post-tax dollars, while the employer-based health care market is paid for with pre-tax dollars. This gives the latter an advantage in costs and affordability. The health care law has begun to change this, but in the wrong direction. Instead of giving the individual insurance market the same freedom as the employer-based market (thus increasing the number of insured persons, as well as lowering their tax burden, always a bonus to struggling families), it gave the employer-based market the same disadvantage, as well as the associated expenses, of the individual market. Companies such as Caterpillar immediately stated they would lose tens of millions of dollars due to the change, and thus would have to drop coverage. As of the writing of this book, Caterpillar, McDonald’s and over 200 other large companies have received exemptions from certain components of the health care law for the employer exchange and other cost-related reasons. Once again, a law that increases the size of government gives advantages to certain well-connected compatriots.
- Set GAO on Medicare fraud. $60 billion a year in Medicare is wasted through fraud alone. It’s time to stop wasting so much of the taxpayer’s income on frivolous and inefficient (as well as criminal) spending.
- Repeal the new health care law. $500 billion in taxes over 10 years is not the way to pay for health care reform, and neither is an insurance mandate giving health insurance companies more power than ever before.
- Immediately begin phasing Medicare into a state-run program, which is where all social programs belong anyway. States are more efficient and more accountable than the federal government.
- States may choose to end Medicare in the long run, something I support. However, federalism would allow each state to experiment with their individual Medicare programs and do what is best for their respective citizens.
- Use the savings from the aforementioned reforms to make the ever-more-expensive “Doc Fix” deficit-neutral. To push off reform of the “Doc Fix” is to continue to play games with Medicare recipients and their patients.
Over the years, liberals have correctly argued that rising health care costs inhibit coverage for many Americans. Similarly, the moderate Democrats key to passage of the health care law in 2010 said the insurance mandate would be a requirement when eliminating discrimination on the basis of pre-existing conditions. These left-of-center individuals are completely right…and thus undercut their own support for the health care law.
The Affordable Care Act was supposed to reform Medicare and the larger American health care system for the better. Instead of focusing on costs, though, it focused on coverage. This is the same thing Massachusetts did…and cost has skyrocketed. This is the liberal dream, however - equality of outcome, otherwise known as universal coverage.
As a conservative, I would get rid of the ACA in its entirety and start revamping health care with what I have described above. Pre-existing conditions or not, if costs drop 30% coverage will be more affordable than it is now and will be under the ACA. Cost is the main concern because a) it is the government’s job to provide for the maximum amount of freedom— in the case of health care, to provide universal opportunity for coverage; and b) equality of opportunity, a far better goal for society than equality of outcome, would be better served by lowering costs enough so that Americans can get coverage on their own terms, not on the terms of the government.
As it currently stands, Medicare both underpays compared to the private sector by nearly 30% (thus making private insurance more expensive) and provides for immoral controls over individual citizens. If the American people really want quality health care with greater coverage, they should work to maximize freedom and cost-efficiency, not government control and cooked books.