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December 30, 2011, 6:00 am

Laura D'Andrea Tyson: Wyden-Ryan's Unrealistic Assumptions... http://economix.blogs.nytimes.com/2011/12/30/wyden-ryans-un...

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Wyden-Ryan’s Unrealistic AssumptionsBy LAURA D'ANDREA TYSON

Laura D’Andrea Tyson is a professor at the Haas School of Business at the University of California,Berkeley, and served as chairwoman of the Council of Economic Advisers under President Clinton.

In a surprising year-end act of bipartisanship, Representative Paul D. Ryan, Republican ofWisconsin, and Senator Ron Wyden, Democrat of Oregon, offered a proposal to reduce the growthof Medicare spending, envisioning a fundamental transformation of Medicare to a “managedcompetition” or “premium support” system.

Today’s Economist

Perspectives from expert contributors.

In their plan, the government would provide a subsidy to Medicare beneficiaries to choose amongcompeting insurance plans, including the traditional fee-for-service Medicare program.

Mr. Ryan and Mr. Wyden say their system would control the growth of Medicare spending betterthan the current system by encouraging more efficient cost-sensitive decision-making by bothproviders and consumers. This incentive argument has considerable analytical appeal, especiallyamong economists – competition usually reduces costs in most markets.

But the markets for insurance and health services are not like most markets, and there is scantevidence to support the Ryan-Wyden assertion, as Uwe E. Reinhardt noted in Economix last week.The cost savings from managed competition are hypothetical and uncertain – in fact, there arereasons to fear that such a system could actually increase costs.

Despite competition and choice in the private insurance system, Medicare spending has grown moreslowly than private insurance premiums for comparable coverage for more than 30 years.

From 1970 to 2009, Medicare spending per beneficiary grew by an average of 1 percentage pointless each year than comparable private insurance premiums. Between 2000 and 2009, Medicare’scost advantage was even larger – its spending per beneficiary grew at an average annual rate of 5.1percent while per-capita premiums for private health insurance plans grew at 7.2 percent, accordingto the Center on Budget and Policy Priorities.


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Center on Budget and PolicyPriorities

In inflation-adjusted terms, Medicare spending per beneficiary increased more than 400 percentbetween 1969 and 2009 while private insurance premiums increased by more than 700 percent.

What explains Medicare’s sustained cost advantage over private insurance? Medicare has muchlower administrative costs than private insurance (administrative costs account for about 14 percentof health care spending, or a whopping $360 billion a year).

And Medicare has considerable negotiating leverage with providers as a result of its hugeenrollment. Private insurance plans are unable to negotiate payment rates with providers that are aslow as Medicare’s rates, even though Medicare’s negotiating authority is tightly limited and oftenundermined by Congress.

Advocates of premium support point to the Federal Employees Health Insurance plan as an exampleof how competition would work in Medicare. But this plan has been no more successful thanprivate-employer-provided insurance at controlling the growth of insurance premiums.

And traditional fee-for-service Medicare outperforms both, even though its elderly beneficiariesinclude a sizable share of the sickest individuals who are the largest consumers of expensivehealth-care services.

In the Ryan-Wyden version of premium support, the fee-for-service Medicare would compete withprivate insurance plans that offer a standard package of defined Medicare benefits or an actuariallyequivalent one.

All participating plans would take part in an annual competitive bidding process, and the bid by thesecond-least expensive private plan or by traditional fee-for-service Medicare, whichever is lower,would set the benchmark for the federal subsidy granted to Medicare beneficiaries to purchase theplan of their choice.


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A beneficiary who chooses a more expensive plan than the subsidy for which he or she was eligiblewould have to pay the difference; a beneficiary who chooses a less expensive plan would receive arebate.

The Ryan-Wyden plan links the size of the Medicare subsidy to systemwide health care coststhrough the competitive bidding process and assumes that competition will slow the future growthof these costs.

But in an explicit acknowledgment that the resulting cost savings are speculative, the plan alsocontains a backup cap that would limit the growth of federal spending on Medicare per beneficiaryto the rate of growth of nominal gross domestic product plus 1 percentage point. Historically, bothprivate health-care costs and Medicare spending per capita have increased at faster rates.

The Ryan-Wyden proposal is ambiguous about what would happen if the cap became binding. Theproposal says Congress “would be required” to intervene and “could” implement policies to changeprovider payments and premiums for beneficiaries.

Congressional intervention to control provider payments would shift the burden of higher-than-anticipated costs to providers from the federal government and would effectively signal the endof managed competition as the mechanism to control costs.

In lieu of such intervention, Mr. Ryan has indicated that the cap would apply to the growth of thesubsidy itself, and this would shift the burden of higher-than-anticipated costs to beneficiaries fromthe federal government.

That would mean that the Ryan-Wyden system would devolve from a premium-support system inwhich the growth of the subsidy depended on actual health-care costs to a voucher system in whichit was delinked from such costs.

The Affordable Care Act of 2010 sets the same target for the future growth of Medicare spending.But unlike the Ryan-Wyden proposal, the act does not undercut Medicare’s ability to control costsby weakening the negotiating influence derived from its national enrollment.

Instead, the act puts Medicare at the center of reforms to create accountable care organizations,reduce payments to hospitals with high admission rates, bundle payments to providers and carry outcomparative effectiveness research. Such reforms are essential to controlling costs and improvingcare.

And only Medicare has the clout and responsibility to accomplish them.

Despite competition, private insurers have been unwilling or unable to spearhead such changes,opting instead to pass rising costs onto consumers through higher premiums and to rely on Medicareto foster efficiency-enhancing systemwide reforms.

That’s why the Congressional Budget Office has consistently refused to recognize large potentialsavings in health care costs from reforms to increase competition among private insurance plans.Indeed, the C.B.O. has concluded that replacing traditional Medicare with competition among suchplans would drive up total health care spending per Medicare beneficiary.


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The Affordable Care Act also creates an Independent Payment Advisory Board, composed ofnonpartisan health-care experts responsible for producing proposals to keep Medicare spendingwithin the target while shielding beneficiaries; increases in premiums and cost-sharing areprecluded. These proposals would take effect automatically unless the president and Congress actedto overturn them.

In 1998, a National Bipartisan Commission on the Future of Medicare, chaired by Senator JohnBreaux, Democrat of Louisiana, and Representative Bill Thomas, Republican of Maryland,developed a premium-support proposal similar to Ryan-Wyden but without an enforceable backupcap on spending. The commission failed to achieve the supermajority required for a formalrecommendation to Congress.

I was a commission member appointed by President Clinton, and at the time I thought premiumsupport was worth trying. Ultimately, however, I could not recommend the commission’s proposalbecause it rested on unrealistic assumptions about the magnitude of the cost savings that wouldresult from competition. I believed competition might ease Medicare’s future financing gap butwould not eliminate it, and I was concerned that the commission offered no crediblecost-containment measures to address this gap.

I have similar reservations about the Ryan-Wyden plan. No evidence supports the plan’s assumptionthat a premium-support system with competitive bidding would control Medicare spending moreeffectively than traditional Medicare.

Nor does the plan contain enforceable cost-containment measures like those in the Affordable CareAct. And the plan’s backup cap on the growth of Medicare delinked from the actual growth ofhealth care costs could shift the burden onto Medicare beneficiaries in the form of higher premiumsand reduced access and quality of care.

This post has been revised to reflect the following correction:

Correction: December 30, 2011

An earlier version of this post misstated the year in which the Affordable Care Act was signed intolaw. It was 2010, not 2011.

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saysomethingWI

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Here's my health care reform plan: Medical providers send all their patients' bills directly tothe patients' Republican congressmen and each of them can pay them out of their$175,000-plus salaries.

Jan. 2, 2012 at 3:02 p.m.Share this on FacebookShare this on Twitter

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6 of 27 1/3/12 5:45 AM

hen3ryNew York

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When it comes to health insurance we don't get to take a test drive. Until we are using it wedon't know how good or bad it is. The system we have now, with private insurance anddiffering standards of care across the companies and the country, isn't helping things. Peopledon't plan where to get sick or have accidents. Cancer patients don't sit down sometime in their20s and say I'm going to have lung cancer when I'm 62 and have it while I'm living in Alaska.What we should be able to count on is health care that is appropriate to our needs, that won'tbankrupt us or our families, and that will be there without us having to fight for it.

Jan. 2, 2012 at 1:47 p.m.Recommended1

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MaloyoNew York, NY

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Wyden-Ryan is a straw horse, as are most proposals/arguments to "save" medicare and/or toimprove the rest of the health care system in the USA.

As a society we have two choices: 1) provide a base level of health care to everybody,irrespective of their ability to pay, or 2) health care is a commodity that individuals are free topurchase as necessary. It is not the role of government to provide any assistance.

We don't have the guts to choose either. (BWT, I am aware of public health considerations andthat private charity exists.)

Tea Partiers can't stand the thought that something like this might be "free" to the"undeseving" but even they don't leave people to die in the streets. Liberals seem to be blind toeconomic reality.

Until we decide what we want and are willing to pay for we're going to beat this subject todeath, while not solving anything.

Jan. 2, 2012 at 4:54 a.m.Recommended1

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7 of 27 1/3/12 5:45 AM


jskdnCalifornia

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"Negotiating" lower rates that don't equal to their fair share of the actual costs of the servicesthey represent within the health-care system shifts the costs of that under-reimbursement tothose who don't have "negotiating" power, causing them to pay higher rates that make up forthe short-fall. Private sector insurance growth represents both the increased costs of providingmedical care to those it insures plus the share of the increase in the growth in the costs ofservices received by Medicare beneficiaries that is cost-shifted.

If Medicare payment as a share of the economy are allowed to grow at a rate 1% faster thanthe GDP growth overall, wouldn't they still would be capturing an ever expanding share of theeconomy that, mathematically, would eventually consume all of the economy, just muchslower than the path we are currently on? And wouldn't the growth rate of Medicare's share ofthe GDP also compound as it becomes a larger share of the economy?


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GlenwoodColorado

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A major problem, if not the major problem, is the continual and relentless increase in healthcare cost and health care insurance costs. These costs are increasing at the rate of 8.5% to 10%per year, year after year. We are just about at the point were health care spending is now$8,000 per year per capita.This simply can not be sustained. The runaway cost increases ofhealth care are approaching the absurd, they will need to be addressed.


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8 of 27 1/3/12 5:45 AM

bucs79Jacksonville, Fl

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The comparison between the rate of increase by medicare patients and insurance patients is afalse one. In fact, insurance patients effectively subsidize the treatment of medicare patients.For every 100 dollars spent treating a medicare patient at one nationally known health carecenter, they are compensated for $60. That's a 66% LOSS per patient ($40 lost for every $60recouped). If it weren't for private insurers making up that amount of money medicare wouldquickly be seen for the scam that it is. Changing the entire US medical system to a medicarelike system would do 2 things. 1) show once and for all how hopelessly unrealistic thepromises made by our politicians have been for the past 40 years. and 2) remove USdominance in medical innovation and research. The US basically subsidizes medical researchas one of the only systems which allows pharma companies to pass along R&D costs tocostumers. The rest of the developed world then passes laws mandating that the new drugs beoffered to their citizens at the cost of manufacturing. Since the R&D costs have been absorbedby the US, this incremental revenue is pure profit for the drug companies, so they do it. Put theUS on medicare and watch the pace of innovation in health care drop precipitously.

Jan. 1, 2012 at 1:22 p.m.Recommended1


inchoate but earnesteast coast

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I don't agree with all bucs has written, but s/he is correct that the continual comparison ofrates of change in medicare and private sector insurance costs are at best compromisedand at worst useless. Medicare's particular patient population & its passive paymentformulae, along with the cost-shifting bucs mentioned, conspire to make the aggressivelypromulgated "percent of increase" comparisons a red herring.

That analytical trope is almost as pernicious as the "Medicare administrative costs are farlower than private sector costs" canard. Medicare contracts out its payments processing,and when your formulas present little to no challenge to ANY submitted bill, what'slikely to cost much anyway?

No, there are many good reasons to take issue with the way US health care is done now,and with proposals like Wyden-Ryan. Professer Tyson would do well to leave these twoon the shelf.

Jan. 2, 2012 at 8:35 a.m.

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9 of 27 1/3/12 5:45 AM


MBPhila

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Info presented here is very helpful. The link-out to this older article also very helpful:http://prospect.org/article/healing-medicare; it's packed with good info that now reads like are-cap or a primer on the vast array of topics surrounding healthcare reform.

I would like to hear about how Improved Medicare for All proposes to solve problems intraditional Medicare such as:

"Incomplete Coverage. Medicare was designed according to the medical and insurancepractices of the mid-1960s. It excludes prescription drug coverage, "catastrophic" coverage(for conditions requiring long-term care), and coverage for many preventive services--allfeatures of most private insurance plans. Medicare's deductibles and co-payments for inpatienthospital services are higher than most private plans. Compared to private health insurance inthe United States, not to mention universal coverage abroad, Medicare's benefit package isparsimonious.

As a result of gaps in its benefits, Medicare covers only about 50 percent of total health carespending by the elderly. Less affluent households must devote more of their income to healthspending than richer ones--or go without care. This regressivity is offset to some extent byMedicaid programs, which help low-income Americans cover their Medicare premiums,co-payments, and deductibles and buy prescription drugs. However, these programs arelimited to the poorest Medicare beneficiaries, and coverage is incomplete."

We never discuss dental why?

Jan. 1, 2012 at 11:00 a.m.Share this on FacebookShare this on Twitter

BantyUpstate New York

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Dental and vision are two areas that are set aside, largely for historical reasons. Dentistryused to be a barber's purview!

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10 of 27 1/3/12 5:45 AM

Of course, teeth and eyes are part of the body, vision correction is as necessary to healthas preserving range of motion of an arm; it's long past time to fold in dental and visualwith the rest of medicine as far as funding and insurance coverage.

Jan. 1, 2012 at 11:20 a.m.Share this on FacebookShare this on Twitter

scottwhartonLos Altos, CA

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Ms Tyson does a god job of describing while this plan does not help reduce costs. But doesn'tsay what her ideas are to,accomplish this. I'd to hear some democratic oriented economistfrankly discuss how they would cut costs without just trashing the other side, holding upincreased spending forever as sacrosanct, or being disingenuous about how to accomplish thisgoal

Dec. 31, 2011 at 10:18 p.m.Recommended1


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Billl WatsonMenlo Park, California

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Having two systems competing for patients; one private receiving no government funding andthe second public dispensing all government funded care VA style and using all ofgovernments low cost advantages, which can not be matched for cost savings by any privateinsurance or non government healthcare systems, could save as much as $1trillon annuallyform the $2.6 spent last year for health care.

See Phillip Longman's book BEST CARE ANYWHERE Why VA Healthcare Is Better ThanYours.

VA patient outcomes are better than anyone's in the country at any price.

Everyone shopping in the United States, would be paying pennies on every dollar spent,whether they are here legally, illegally, rich, poor, including 40 million tourists annually

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11 of 27 1/3/12 5:45 AM

making it possible for everyone in the United States to receive government healthcare freewhile spending only a fraction of what we spend today.

Businesses and states could eliminate all costs and involvements with healthcare.

For patients using government care there would be no more donut holes, insurance, co pays orcosts period for seniors or ANYONE WHO ASKS to use FREE government VA stylehospitals for civilians where they could receive complete birth to death healthcare,medications, eye care, dental every healthcare need FREE, NO RESTRICTIONS, JUST ASKPERIOD and all paid for by pennies on the dollar sales tax.

Businesses and states could get completely out of all healthcare hassles and costs.

Dec. 31, 2011 at 7:17 a.m.Recommended3


JonathanNYC

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What you are talking about is different competing schemes of paying the same gigantic billsthat doctors and hospitals are charging.

In order to cut costs, you need to eliminate insurance companies and have doctors andhospitals competing on price direct to the customer. Then you will see costs go down!



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juanitameriden,ct

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So, tell me again,if Medicare has better cost containment over time than prvate insurances,why,oh,why, do they want to change Medicare????Are they lying about their reasons for wanting to change Medicare?You betcha.

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12 of 27 1/3/12 5:45 AM



bcamardaNJ

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Every mushroom cloud has a silver lining. And one silver lining arising from the pastmiserable decade is this: people are starting to notice that merely spreading "free market fairydust" does NOT automatically solve problems.



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StanAnn Arbor

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I've read the famous "It's the prices, stupid" article in Health Affairs by Reinhardt andcolleagues, and it agrees with this very sensible blog post. I thank Ms. Tyson for writing it, andI hope it has some influence.



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JackPennslyvania

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The simplest thing would be to have a Medicare-for-all system. You let people under 65 buyinto Medicare AT COST.

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13 of 27 1/3/12 5:45 AM

This would reduce the amount of uninsured, and as such make even private plans lessexpensive.

Then allow us to import prescription drugs from Canada.

These two things would probably reduce the budget by $2 trillion over the next 10 years.

On top of this small businesses would have more profit, and wages would rise.

I question Paul Ryan's intentions, as I wonder if he is just pushing this because his initial billwas so radical, and with all the GOP members having signed the pledge for it, now somehowpeople's ideas of the Ryan plan can be this.

Health Care costs have doubled over the last 8 years, which corresponds with these growthrates for private plans, but it would seem Medicare would have gone up by this same amount,if the ratio between the amount Medicare pays for treatment is the same now, it was 8 yearsago. Based on these numbers, if Medicare paid 75% the same for a treatment compared towhat the private insurance pays, now they only pay 50% as much. It seems they aren't payingenough. Maybe private insurance companies have to pay hospitals more to compensate this.



Doc WhoSan Diego

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Obviously, Wyden-Ryan will increase costs, and the profits will go to existing insurancecompany executives in the form of bonuses and other "compensation."

What a swindle.



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Eduardo Siguel, MD, PhD, JDWashington, DC

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When HMOs were expanded, I created the econometric models for comparative effectiveness,cost/benefit analysis and projections comparing health care under HMOs vs. traditional fee x

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14 of 27 1/3/12 5:45 AM

service. I gathered actuarial data from insurers, visited plans and spoke to experts. HMOs werelikely to cut average length of hospital stay by 1/2. At that time, hospitals were inefficient.They repeated tests done outpatient. They were in no rush. It took 1/2 to 1 day to be admittedand evaluation to start. Diagnostic blood tests and X-rays took days. By coordinating Dx andRx, eliminating unnecessary duplication, HMOs improved care, reduced side effects fromunnecessary testing and long waits, improved health outcomes (faster treatment). I saw theeffects on similar patients under both systems. Years later, hospitals were paid by diagnosis,not by length of stay. These savings are already incorporated. Similar "system" savings areextremely difficult for outpatient care.State of the art medicine is far more advanced than current practice because of severe rationingof care. Unlimited state of the art care has an actuarial premium over $1M. Thus, every planmust deny care (via rejections or delays). In my view, all plans are similar scams to disguise orconceal denial of care. Best evidence data does not exist. The probabilities of outcomes givenspecific diagnosis and treatments do not exist (for several years into the future). Differentapproaches are gimmicks to conceal rationing.



Dave SNew Jersey

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None of the plans address address the pricing of medical services. Still out of control and notbased on true competition. Too many economic rents still landing for the providers. We can'tleave tort reform out of the equation. Lets factor that in on the side of reducing costs. Lets getthe politics out and move toward controlling health care spending relative to the economy as awhole. If a medical license is a de facto monopoly, why shouldn't health care providers berequired to accept at least a reasonable (substantial?) percentage of patients from Medicare aswell as private insurance? Out of network should be actively discouraged at the policy level.



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billsecureBaltimore, MD

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15 of 27 1/3/12 5:45 AM

The focus needs to be on health care delivery and its costs, not on the insurance system. Thefact that people lacking insurance pay much more than the insured says a great deal.Competition and the free market system do not apply to health care delivery.

Consumers have little ability to determine the value and appropriate price of a service they arereceiving and it cannot be done via insurance selection. If you guess wrong, get the wronginsurance and become ill or are involved in an accident, you can go bankrupt.

There are two possible solutions, single payer or price controls for health care services. Weneed to pressure the delivery system to control costs. These are the only ways it can be done.Remember the prescription costing $1500 replacing one compounded by pharmacists that cost$20? Typical.

How many prostate biopsies or colonoscopies being performed are needed versus done toenhance the incomes of those performing the procedure. Most health services consumers don'thave, can't get and lack the expertise required to to make good medical decisions. Example...someone has had a moderate headache for about a month. Should they wait and see, have anX-ray, a CAT scan, an MRI, a PET scan, or try aspirin for a week?

Back to where I started: "The focus needs to be on health care delivery and its costs, not on theinsurance system. Focusing on insurance accomplishes little."



workerbeeFlorida

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"Advocates of premium support point to the Federal Employees Health Insurance plan as anexample of how competition would work in Medicare. But this plan has been no moresuccessful than private-employer-provided insurance at controlling the growth of insurancepremiums."

Each year Federal employees receive a list of private insurance companies from which theemployee has to make a choice or keep her present insurer. The list of insurers is really a cartelof companies, none of which is fundamentally superior or inferior to the other cartel members.The employee gets only what she pays for: the higher the premium, generally the better thepolicy, and vice versa, and there is no "single-payer" government option. So, even thoughthey're government employees, their health insurance options are completely privatized. PaulRyan (Republican) is working on behalf of the health insurance lobby to, ultimately,completely privatize health insurance availability for everyone and to get the government outof the healthcare insurance business.

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16 of 27 1/3/12 5:45 AM



JDKJJKNY NY

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As a retired federal employee, I am happy to read a comment that accurately describesthe federal health benefit system.The fact is that back when a large majority of private sector employees were receivingfree health insurance, federal employees were paying a portion of the total premium cost.In fact, when I first went to work in the federal sector, my health insurance benefits didnot match the benefits I received in the private sector. Unfortunately for private sectorworkers today, most companies have copied the federal program by imposing employeepremium payments for their health insurance.



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Debbie R..Brookline,MA

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I wonder how many congress people have experience with the lowest cost policiesavailable to them?

When you're healthy, any policy is adequate. When you're sick, not so much.



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inchoate but earnest20.


17 of 27 1/3/12 5:45 AM

east coast

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Medicare's passive payer model wasn't especially good when devised 50 years ago. It's nobetter now. Trumpeting the slow growth of Medicare spending is spurious, since the base fromwhich the computation begins is also important - and conveniently absent from this overview.

The "Medicare has low admin costs" lie is the vilest sort of distortion, and a blot on Krugman'sreputation (he has the highest profile I know of among the naifs who insist on repeating it).

I'm not at all convinced Paul Ryan has changed his spots, but I AM convinced that thosehewing to shrill defenses of Medicare-as-is, or as-morphed-into-single-payer, are every bit asloony as him.

Dec. 30, 2011 at 11:28 a.m.Share this on FacebookShare this on Twitter

Don McCanneSan Juan Capistrano, CA

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Conservatives have challenged the claim that Medicare's administrative costs are low byadding in other governmental agency costs that they contend were left out. But theyweren't left out.

According to the 2011 KFF Primer on Medicare Spending (a highly credible resource):"The costs of administering the Medicare program have remained low over the years –less than 2 percent of program expenditures. Administrative costs include all expensesby government agencies in administering the program (HHS, Treasury, the SocialSecurity Administration, and the Medicare Payment Advisory Commission). Alsoincluded are the cost of claims contractors and other costs incurred in the payment ofbenefits, collection of Medicare taxes, fraud and abuse control activities, variousdemonstration projects, and building costs associated with program administration."

Compare Medicare's less than 2 percent administrative costs to those of private plans thatwill struggle to stay under the 15 to 20 percent administrative costs plus profits permittedby the Affordable Care Act.

With the facts at hand, who is guilty of "the vilest sort of distortion"? Certainly not PaulKrugman.


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18 of 27 1/3/12 5:45 AM


inchoate but earnesteast coast

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Don,

You may recall from grade school that 2% of a high number can be a greater quantitythan 10% of a lower number. Medicare's passive payment formulae both make"administration" of check-cutting apparatus simpler, and the ratio of admin. costs topayments lower.

I'm no fan of the way things are done in US health care now. Neither am I a fan ofmisleading defenses for Medicare that detract from the solid points that COULD bemade.


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The unrealistic assumptions here are the ones made by Democrats regarding Republicaninterest in making healthcare more affordable for the consumers of healthcare. What they areinterested in is lowering costs for those who subsidize healthcare.



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Milton RechtMount Kisco, NY

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19 of 27 1/3/12 5:45 AM

Governments do not lower costs. They increase costs to the user outside of governmentaccounting, which appear to lower government costs but merely shift these costs to end users.

By paying below market rates, as Ms Tyson's chart indicates, the number and quality of ofmedical providers decreases, waiting time increases as well as denial rates for service.

Additionally, out of pocket medical expense increases to offset government's lower paymentrate, as in England where people buy secondary medical private insurance to supplement theirgovernment health insurance, or as in Canada where people travel to the US for faster andbetter medical care.

Furthermore, administrative costs is a red herring, since there are many other governmentfunctions that Medicare relies on that are outside of its accounting statements and measuredcosts, but which are included as costs for private insurers.



Read All 4 Replies

McDruidSan Jose, CA

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A number of studies have looked into the assertion that Canadians are using US healthcare to cut wait times or get better care. All have come to the same conclusion: Thenumber of Canadians doing this is almost non-existent.

Note that there are times when Canadians do utilize US health care for reasons of accessor expertise, but these are approved by, and paid by, their Canadian health insurance.



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20 of 27 1/3/12 5:45 AM

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If gov'ts don't lower costs, how is it that other countries manage to spend far less onhealthcare per capita than we do, while covering more people?



Look AheadWA

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The insurance industry is happy to participate in programs like Medicare Advantage or Part D,where the government guarantees their payment at a premium to the public option cost.

I wonder whether anyone has ever asked the health care insurance industry how interestedthey are in bidding to insure the Medicare population, with ballooning obesity related chroniccare issues looming and no ability to control cost drivers?

While I strongly support the Affordable Care Act for the many benefits it provides in coverageand cost containment, I would still like to see a basic public option for all ages that is paid forby a Medicare type tax without a wage cap. If someone opts for a more expensive private plan,they pay the difference rather than me.



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rplertTacoma, WA

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It has been roughly 50 years since Kenneth Arrow published his seminal article in TheAmerican Economic Review on why there was an inherent market failure extant in the healthcare market and why market pricing solutions were bound to fail. Since then, all the empiricalevidence goes to show that he was correct. Isn't 50 years of data sufficient for us to move onand get this productivity sapping sector of our economy under control so we can invest ourcapital in more useful things?

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21 of 27 1/3/12 5:45 AM



R. LawFlorida

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Very nice, Ms. Tyson - of course the point to remember is that driving all such discussion arethe underlying demographics of baby boomers which make health care one of the few growthindustries.

As such, Ryan-Widen are in league to make sure that private industry provides the services, ata profit and with as little regulation as possible, instead of the proven results of Medicare's lesscostly administration.

In service of this reality, and consistent with less regulation meaning costs will be harder torestrain, the fragmenting of provider-ship into more entities to ' compete ' with Medicareseems more and more like what most states see now in the regulation of utility rates, withmany states having the model of some sort of Public Utility Commission which determinesacceptable rates.

Not many serious people would hold up this regulatory model as something to emulate,especially since you point out what very well seems to be the bait-and-switch tacticsRyan-Widen regarding premium support quickly devolving into the Never-land ofvoucher-dom.

Perhaps the solution is making Congress's health insurance subject to the same scheme,instead of the current ' premium support ' they now enjoy ?



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The latest proposal to overhaul Medicare, like its predecessors, uses unrealistic assumptionsabout how increased competition would lower health-care costs, an economist writes.

The Biggest Cut in Unemployment Benefits 13 Comments


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The federal stimulus, now expired, brought with it substantial benefits for the unemployed thathave also now expired, an economist writes.

How Politics Came to Dominate Payroll Tax Debate 10 Comments

Lower payroll taxes were originally a Republican idea, and just why they turned against it issomething of a mystery, an economist writes.


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