I actually think Paul Ryan is to be commended. If he was simply worried about being reelected in Wisconsin’s fairly liberal 1st district (a democrat represented it from 1971 through 1995) he might not be proposing plans that eliminate Medicare and Medicaid as we know it. He has the courage of his convictions as a conservative who doesn’t think government is the vehicle we should be using to deliver health care to the most vulnerable. I ultimately disagree with him, but there is evidence to support his position. The amount of waste, fraud and abuse in Medicaid and Medicaid, for instance, ends up costing us billions and billions of dollars.
But perhaps before scrapping the whole program we should actually do something to combat these kinds of practices. Ryan’s proposal also fails to address an important underlying problem with all of health care. Its growing costs:
Ryan’s proposal would put Medicare and Medicaid on a budget, at least where federal dollars were concerned. Under his plan, after Medicare started the transition from providing insurance to subsidizing premiums in 2022, the increase in subsidies would be tied primarily to the consumer price index, which has been rising at roughly half the rate of healthcare costs. Increases in the Medicaid block grants would similarly be held well below the rate that treatment costs have been growing.
Ryan’s plan would leave seniors, states and the poor more exposed to ever-higher costs. And regrettably, the plan treats the symptoms of the healthcare spending problem, not the sources. Those include an aging population and an endless stream of expensive new treatments that can extend lives, two factors that no reform effort could or would try to change. But there is much that can be done to eliminate the perverse incentives in the healthcare system that deliver the biggest financial rewards to those who perform the most treatments on the sickest patients.
Ryan doesn’t address that issue, at least not directly. But the healthcare reform law Congress enacted last year, which Ryan wants to repeal, tries to fix the system’s warped incentives by trying out new ways to deliver and pay for care that emphasize coordination, quality and value. The law calls for the lessons from successful trials to be applied more broadly across Medicare, in the hope that they will filter into private insurance plans as well.
But as I argue in my new book Too Expensive to Treat?, while we definitely should eliminate waste and fraud, and try to encourage market forces to drive down costs, we will never escape the following hard and disconcerting truth of the human condition: we have virtually infinite health care needs coupled with radically limited health care resources. Until we come to grips with this fact, honestly and forthrightly, the unfortunate fiction that we can provide for 100% of everyone’s health care needs will continue to drive us further and further into massive debt. Debt which is now starting to take a serious toll on our economic future and the well-being of future generations.