There are times when I genuinely wonder whether I am taking leave of my faculties and reading this op-ed in the Washington Post written by physician William R. Brody was one of them. For the life of me to this very moment I can’t determine whether it was intended seriously or as satire.
So why not let Congress continue to decide how much, in total, it is willing to obligate to Medicare spending each year? Then create an autonomous agency, like the Federal Reserve, to oversee and determine how Medicare dollars should be spent.
Members of this Federal Medicare Reserve would consist of a Board of Governors and a chairman, nominated by the president and confirmed by Congress, who would be charged with defining how the system should operate and how dollars should be allocated. There could also be a series of regional Medicare Reserve Boards that would provide more local oversight over Medicare payments.
There is a precedent of sorts for such an agency. Before the Federal Reserve System was created, our nation experienced numerous financial panics. The Fed has not eliminated all problems, of course, but certainly in the past year we have seen its ability to mitigate them. Its quick, expert work last year allowed our citizens and other countries to maintain confidence in the U.S. banking system.
In much the same way, a Federal Medicare Reserve would be responsible for keeping the Medicare system financially solvent while providing effective health care. Its creation recognizes that — like our monetary system — Medicare policy requires a steady hand, an informed understanding of the system, freedom from undue political pressure and a long-term view. Health-care policy is not amenable to management by a group that regularly raises campaign contributions from special-interest factions.
Apparently, Dr. Brody hasn’t been paying attention to the news lately. Is there anybody, including Alan Greenspan who was responsible for the policy, that doesn’t believe that the actions of the Fed, ideologically motivated, in keeping interest rates too low for too long wasn’t one of the key elements in the near-collapse of the financial sector the anniversary of which passed just a few days ago? Or that the New York Federal Reserve, the analog of the “regional Medicare reserve boards” he advocates, was demonstrably unable to ensure the health of the New York banks for which it was at least nominally responsible? The lesson of the last year isn’t how wonderful the Federal Reserve is but that it is inadequate to the task on its plate. For goodness sake, Alan Greenspan has written that very thing himself.
Also, make special note of this aspect of the Brody Plan:
So why not let Congress continue to decide how much, in total, it is willing to obligate to Medicare spending each year?
That his plan would actually save money depends completely on Congress’s willingness to limit the money that the Medicare system spends. If Congress had that commitment, the Medicare Reserve Board Dr. Brody proposes wouldn’t be necessary and the Board provides no cover that would empower the Congress to change its profligate ways.
Additionally, in his plan there is an implication that physicians, too, are incapable of restraining themselves and will continue to treat as long as there’s money on the table to pay for the treatment. A charming picture of the medical profession.
“Additionally, in his plan there is an implication that physicians, too, are incapable of restraining themselves and will continue to treat as long as there’s money on the table to pay for the treatment. A charming picture of the medical profession.”
Incentives don’t matter? Why should I stop making money?
Wasn’t this Daschle’s program? I guess the theory is that you eliminate some lobbying with politicians would be the theory for why this might work. Hard to believe these regional boards could be isolated from interest groups.
This did make me think of the Swedish (could be Swiss as I mix up those two) model where you have individual areas of the country running their own health plans. I occasionally wonder how that would work here if we did that on something like a county by county basis, or maybe small groups of counties.
Steve
There is a kernel of truth to the problem, even if his solution is laughable. What he’s proposing is, of course, a system of rationing — which we are avoiding doing as much as we possibly can, hence runaway costs.
The issue that we need to ration care is pretty new — when Medicare was developed, there were many fewer pharmaceutical treatments available; surgeries were simpler, survival rates were lower, fewer people made it to 65, and a lot of those that did were healthy until they died or until pretty close to that time. Now we can do a lot more, what we can do often costs more, and we’re a lot better at keeping people alive longer with chronic conditions — good if you like living, hard if you’ve got to foot the bill.
We need to figure out how to ration, therefore, in a way that suits our societal definition(s) of fair, or just shut up and admit that healthcare can and should cost a fortune.
Steve, if your position is that physicians are just medical retailers, then they should be regulated just like any other retailers are. The current system assumes that physicians are professionals operating under a code of ethics.
While the idea of a “Federal Medical Reserve” is laugable, its purpose would be to ration healthcare to control costs. Can we actually get away from a system where healthcare is rationed? Obviously not. If our current system rations healthcare based on price shouldn’t any reform center on the elimination of subsidies and policies that hide the true cost of healthcare from the recipient. Only when subsidies are removed and true costs are contemplated can rational consumption and pricing take place. Reform that centers on controlling the price of healthcare or access to healthcare will inevitably lead to shortages and surpluses. Since rationing based on price works reasonably well for almost all other goods and services in our economy, why should healthcare be different?
Congress already has this power doesn’t it? If so then this notion of his is just flat out stupid or not thought through.
Yes incentives matter Steve. Physicians already have it within their power to limit what procedures are done, what treatments are prescribed, etc. They don’t because they can make more money by not limiting things. A fee for service set-up is part of the problem. Insurance companies know this and want to limit things, but they are excoriated for this. No, much better that a bureaucrat in Washington DC do it.
No, not really. The price mechanism is a way of rationing resources. Its a damn good one. We don’t use it for health care and therein lies the problem. Note the is covers both the SUPPLY side and the DEMAND side. Entry into medical professions is severly limited. Can we say higher prices. Demand is largely unrestrained because people do not see or even feel the real burden of the costs they impose on the system. Add them together with a fee for service setup and wow look at those prices go!
And no politician will likely be able to solve this. Remove supply bottle necks and nurses, doctors, and other medical professionals will not be happy. They will start the rent seeking machine going. Try to restrict the demand side and people may not get all the care they want, or wont like paying more of their share. Especially the elderly who are some of the largest consumers. No solution exists without getting them to reduce consumption, and that is political suicide.
Nope, we’ll likely get some abortion we call reform that will not do a damn thing. In 15 years things will go completely off the rails and real reform will be forced upon us.
Good point. But keep in mind that for how badly the Fed acted, they were at least able to act swiftly in response to changing circumstances when it did hit them – which is part of having a board like this; it gets away from Congress’s infernal slowness (and Congress can always just re-take its delegation if it wants to).
So the logic runs like this…
The Fed is partly responsible for the current financial crisis and also the recession, but that is okay becuase they are responding quickly and fixing the problem. So if a mugger eventually returns part of the money he stole, he gets a free pass too?