The war to reform American medicine has been won.

LyndonJohnsonSigningMedicareBillThe transformation began with the enactment of Medicare and medicaid during the Johnson years — which allowed prices to be contained as a growing percentage of bills were paid by large entities, especially the government — and the HMO act during the Nixon years — which endorsed the idea of an efficient system where experts decided on how to treat any problem,  effectively setting limits on volume.

Once the tools were in place to control both price and volume, the rest was just fine tuning,  which is still ongoing.  The basic principles were ratified in Obamacare and are no longer under serious challenge.  The change hasn’t relied entirely on government action, but reflects private sector movement in the same direction. Continue reading The war to reform American medicine has been won.

So What’s the Problem?

healthcare If the good news we’ve been hearing about American health costs in the past few months turns out to be the new norm – it’s too early to tell – then much of today’s political debate is wildly misguided. Consultants predict 2014 will see abnormally low inflation, again. Medicare spending per beneficiary is dropping more than previously anticipated. And new tools provided by Obamacare to constrain costs could accelerate these trends. Continue reading So What’s the Problem?

Adding Doctors Inflates Bills Without Aiding Health

Congresspeople Schwartz and Schock While much of Washington worries about how to constrain Medicare costs, two contrarian legislators want the program to spend $1 billion more annually to fund residency training for new doctors.

Their plan responds to a projected physician shortage. There’s heated debate about whether there will be a physician deficit in the future and, if so, how to best respond. There’s less debate about whether increasing the physician supply will increase our medical bills. It’s intuitive. More doctors will not only bill more so they can make an adequate living, but will order more tests and referrals. Normal economic logic that increased supply drives prices down doesn’t work in medicine. Continue reading Adding Doctors Inflates Bills Without Aiding Health

Means-Tested Medicare Accelerates Down Track

Sample Medicare Card Rich people have paid more for Medicare coverage since the program began in 1966. Subsequent changes have regularly increased the extra amount those with high incomes must pay for coverage. That history often seems totally forgotten in today’s Medicare reform debate about whether the program should be means-tested so as to require upper-income people to pay more.

In fact, that’s been a basic component of the program from the start, which makes the current debate so distracting and confusing. The real question is how much extra the rich should pay. Continue reading Means-Tested Medicare Accelerates Down Track

Recasting the Medical Morality Play

Doctor and patient Many Americans have an unhelpful habit of viewing the health reform debate as a morality play where those who treat us, usually doctors and hospitals, are viewed as the good guys and those who pay for those services, generally insurance companies or government programs like Medicare, are seen as villains.

When a physician suggests another test, we assume that they’re trying to be helpful rather than merely increase their income. When an insurer refuses to pay for a test proven unreliable or has a less expensive alternative, we assume that the decision comes from heartless profit-maximizing bean counters. Continue reading Recasting the Medical Morality Play