Medicare and Health Care Costs

If you need any further evidence that the two major political parties have wildly different and entirely incompatible approaches to health care policy, check out Ezra Klein’s piece on how Ds and Rs view the relationship between Medicare and health care costs:

There is a sense in which the fundamental health-cost theories of Republicans and Democrats have become perfectly contradictory. Republicans believe Medicare is the singular problem contributing to the relentless growth in health-care costs, and the only way to truly fix our health-care system is to turn Medicare into a voucher system, breaking it up among private and public options and letting competition work its will.

Democrats look at the lower prices paid in single-payer countries as well as the lower prices paid by Medicare in this country and come away with a very different conclusion: We could be paying much less and getting much more, but the insurance industry, at the moment, doesn’t have enough power via-a-vis hospitals and other providers.

Medicare, as the nation’s largest payer, is thus the most promising solution to health-care costs, and Medicare should be using its bargaining power to lead the private market — in particular, by persuading hospitals and other providers to make overdue, but difficult, reforms to how they deliver care.

Beyond that, the arguments can get confusing. Sometimes Republicans seem to identify health care inflation strictly with rising public costs; shifting those costs to beneficiaries, from that perspective, “solves” the problem. Other times Republicans appear to believe that over-utilization of health care is the only real problems in the system; thus, exposing patients to more of the costs generated by their demands for care will “bend the curve” of health care costs. More direct reductions of costs via the use of the government’s leverage “distorts markets” and can’t, according to conservative dogma, possibly work.

How do you find a “compromise” between people with such diametrically opposed ideas of how the health care system works? Beats me.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.