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Everyone Wants a "Free Lunch"
I learned long ago that "there is no such thing as a free lunch." This wisdom seems to have been lost in the debate about the government-run health plan. At the heart of the debate is simple economics: how much coverage at what cost.
Neither the public nor private sector has solved this problem in the last 40 years. The private heath insurance industry sets its rules and pricing according to what it can sell to companies. Even with higher co-pays and other limitations, these premiums have become unaffordable for many employers.
The federal government's current "public program," Medicare, is even worse off. By 2030 or sooner, rising Medicare costs will devour the federal budget.
In the "public vs. private" controversy, the debaters are ignoring these facts and playing on the usual public fears -- profit-hungry insurance companies that limit care vs. big government that eliminates competition and choice.
The sobering fact is that regardless of insurance, only a new delivery model will break the medical inflation curve. The private insurance sector is unlikely to take this risk. However, the "big dog," -- Medicare -- can take the lead since no provider can survive without it.
This reality is slowly dawning on the body politic. Through Medicare, the federal government has tremendous leverage to transform health care delivery and lead the way for universal coverage. The converse is also true. If Washington is inept at solving Medicare's woes, we cannot afford universal coverage, much less Medicare itself.
We should use Medicare to change both health care delivery and our national conscience. Our country needs a system where patients and providers get everything they need -- not necessarily everything they want.
In health care, as in life, there is no "free lunch".
By
Mark Kelley
|
August 4, 2009; 12:55 PM ET
| Category:
Health Care Reform
,
Health costs
,
Public option
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Posted by: lensch | August 7, 2009 12:25 PM
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Thanks for the comment. There are some other important differences between Medicare and private insurance:
--Medicare has negligible administrative costs and no marketing costs.
--before Medicare Part D, all Medicare patients paid for their outpatient prescriptions.
Thus, even with no marketing expense and limited exposure to pharmacy costs, Medicare is destined for insolvency.
I agree that the government should use its leverage to reduce both pharmaceutical and medical device expense--but that will not be enough. We must curb our appetite of "everything for everyone" and provide effective coverage that is economically sustainable. Otherwise, even Medicare could disappear.
Posted by: MarkKelleyMD | August 6, 2009 10:39 AM
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It would be easier to believe what you say, Dr Kelly, if the US were the only country in the universe. There is no need to reinvent the wheel. Other countries with government run systems get better health care as measured by all 16 of the bottom line public health statisics, and they do it at less than half the cost per person.
I am a mathematician. If you look at the figures, you will see that because of the waste of for profit insurers and the maketing costs of the drug companies, we can easily give an improved Medicare to everyone at no more than we are now paying. Then we can work on the difficult problem of improving of delivery system. And people will not be dying or going bankrupt because of lack of insurance or underinsurance.
Posted by: lensch | August 5, 2009 10:47 AM
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The comments to this entry are closed.
"Medicare is destined for insolvency."
I'm sorry, but this comment, which I get all the time drives me up a wall. If we put in the money we would save by the elimination of for profit insurance (overhead and compliance costs), Medicare will have plenty of money even if we give it to everyone.
Furthermore, even if we don't change it at all and it continues to rise as it has, we can afford it at least until 2050. As Uwe Reinhardt has computed, under very conservative assumptions, we will have 77% more in per capita GDP (in real dollars) after paying for Medicare in 2050, than we currently do. If you want I can post his computation.