There is a common thread that unites many of the major news stories of the day, from the report on torture from the Senate Intelligence Committee to the sharp decrease in the number of doctors accepting new Medicaid patients to the spike in local government debt in China. It’s an idea that’s familiar to anyone who’s ever taken an introductory economics course: incentives matter.
Even as Medicaid rolls expand by some 9 million people, the number of physicians willing to accept new Medicaid patients is shrinking:
In 2011, 31 percent of doctors said they wouldn’t take new Medicaid patients, compared to 18 percent of doctors who said they weren’t accepting new privately insured patients, according to a Health Affairs study. The study, which was the first to take a state-by-state look at the issue, found lower Medicaid reimbursements rates made doctors less willing to accept new Medicaid patients.
The reason for that is simple: Medicaid reimbursement rates are signficantly lower than either private insurance or Medicare reimbursement rates. And in Illinois at least a physician may need to wait nine months to be paid the state’s portion for services. That’s how far Illinois is behind in its reimbursements.
In the case of China not only were local officials receiving strong encouragement from the central government but given the way business is done in China (or here in Illinois for that matter) a little bit of all of that lovely money inevitably but miraculously made its way into the coffers of those very same local official or their families. What’s not to like?
If the incentives for intelligence officials to torture prisoners and lie to Congress about it are high enough and no punishments are forthcoming for doing either, it is inevitable that both will happen again. The Civil Service Code prohibits most of the obvious punishments, e.g. an across-the-board pay cut, but it doesn’t prohibit intelligence officials who lie to Congress under oath from serving lengthy jail sentences. If Congress is serious, that’s what should happen.
