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June 17, 2011


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Ricardo's Ghost

A couple of points:

- the danger isn't Medicare, it's healthcare costs in general. If you think the costs of Medicare are getting out of hand, look at the costs of private health insurance which ordinary Americans (and importantly, their hard-pressed employers) are trying to cope with.

- their has been a huge amount of work done by health economists over the past 50 years looking at healthcare markets and why they are so difficult to deal with, and why solutions you might try elsewhere don't work out with healthcare. Importantly, they've also studied ideas that might work.

- the object of the exercise is to contain costs and raise the healthcare of the American people in general. But accepting this has consequences: it may be that Medicare needs to be more restrictive about what it will pay for (i.e. not for more expensive treatments that don't deliver significantly better outcomes); that even if you reform Medicare you may need to raise additional revenues to pay for it; that the best outcome for the country might be for greater government involvement.

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