Have Nationally Recognized Economists Given Up on Meaningful Heath Care Reform?
The Brookings Institution and the American Enterprise Institute are two well-respected national think tanks. Brookings leans to the political left and AEI to the political right. Last week, health care policy analysts from the two organizations submitted recommendations to Senator Lamar Alexander (R-TN) on ways to contain health care costs. (here)
Sen. Alexander is the Chairman of the Health, Education, Labor, and Pensions Committee and asked various groups to submit health care cost-reduction proposals. The Brookings/AEI recommendations are important because of the analysts’ diversity of political thought.
As outlined in Health Affairs (here), the recommendations include:
- Expanding mandatory bundled-payment programs through federal legislation.
- Reforming Medicare benefit design and Medigap cost sharing.
- Expanding site-neutral Medicare payments.
- Boosting funding for federal anti-trust enforcement.
- Encouraging development of all-payer claims databases through federal action.
- Removing state regulatory barriers to provider market competition.
- Ending surprise out-of-network medical bills through federal legislation.
- Increasing Medicare payments for primary care and reducing them for other services.
- Reforming payment for physician-administered drugs in Medicare Part B.
- Revising Medicare Part D's protected classes and its reinsurance program.
- Offering greater financial incentives in Medicare Part D for use of generic drugs
- Limiting the tax exclusion for employer-sponsored insurance.
- Reforming Certificate of Need Laws.
The importance of these recommendations is not in their details. The critical issue is that a diverse group of nationally recognized economists cannot remember Economics 101 – if someone else is paying for a service or a product, people will use as much of that service or product as they possibly can.
Well over 80 percent of health care in the U.S. is paid for by someone else, a third party. Only the recommendation from Brookings/AEI limiting the tax exclusion for employers even begins to address the third-party-payer issue. If the country is serious about retaining quality while holding down health care costs, the solution is to allow patients, as consumers of health care, to make their own health care decisions. (here)
These recommendations are more than disappointing. They essentially start with a premise that the U.S. health care system is a sinking ship and simply rearrange the deck chairs. They do not suggest meaningful reform to Medicare and Medicaid, nor repeal of the costly and burdensome Affordable Care Act, nor a change in the federal tax code to give individuals the same advantages as employers.
What these recommendations do say is that the government should remain in charge of our health care system and government bureaucrats should continue to make our health care decisions. Polls vary by how the questions are asked (here), so it is still unclear how Americans truly feel about a single-payer, “Medicare for All” health care system. What is clear is that the country is definitely marching in that direction.