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Tuesday, March 09, 2010

Get your gub'mint hands off of my Medicare

Funny but, in a way, the President's plan really does threaten Medicare.

Countries where health care prices are negotiated centrally with the government at the national or provincial level – for example, because they have a single public payer for health care – pay much lower prices and their medical inflation rates are lower. (Here's a good article about price vs. quantity; it's a pdf.) Yet this plan does nothing to change the status quo in the U.S. It includes some pilot-project-type programs to see whether Medicare can cut some services without reducing quality. (We are assured this will never affect the quality of health care for the elderly, but it surely won’t be tested on Lloyd Blankfein.) But the “structure” left in place is still based on private health insurance – i.e., decentralized price determination, or what Obama likes to call “choice and competition.”

But it gets worse. The decentralized private payment system will inevitably start crowding out the public insurance we already have, especially Medicare. With continued double-digit medical inflation, the slow-motion dismantling of Medicare isn’t a possibility, it seems like an eventual certainty. (Just look at the current deficit hysteria, which is now being propitiated by the White House and its independent commission.) We are on a moving train going in the wrong direction; instead of turning the train around, this bill tries to solve the problem by having us all run towards the caboose.


But, as Greenwald explains, running for the caboose is all this President ever seems to do.

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