In the Times this morning, Paul Krugman, who clearly opposes Paul Ryan‘s Vouchercare plan, nonetheless acknowledges that “medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on.” Writing in The Washington Post, Robert J. Samuelson convicts “spiraling health spending [as] the crux of our federal budget problem. In 1965 — the year Congress created Medicare and Medicaid — health spending was 2.6 percent of the budget. In 2010, it was 26.5 percent. The Obama administration estimates it will be 30.3 percent in 2016. By contrast, defense spending is about 20 percent; scientific research and development is 4 percent.” Samuelson, who finds much to like in Ryan’s plan, calls it “shock therapy” that would theoretically empower medicare beneficiaries to “shop for lowest-cost, highest-quality insurance plans providing a required package of benefits”, and would force the health-care delivery system “to restructure by reducing costs and improving quality. Doctors, hospitals and clinics would form networks; there would be more “coordination” of care, helped by more investment in information technology; better use of deductibles and co-payments would reduce unnecessary trips to doctors’ offices or clinics.” Samuelson then asks the $64,000 question: “Would it work? No one knows.”
But as Samuelson makes clear, “few doubt that today’s health-care system has much waste: medical care that does no good; high overhead costs. . . .In one survey, 20 percent of patients reported that doctors repeated tests because records were unavailable; the health-care sector has twice as many clerical workers as nurses and nine times as many as doctors; care of patients with chronic conditions is often slapdash, so that, for example, only 43 percent of diabetics receive recommended treatment.” And as Krugman makes clear, cost containment is a goal that can be realized. “Consider Canada, which has a national health insurance program, actually called Medicare, that is similar to the program we have for the elderly, but less open-ended and more cost-conscious. In 1970, Canada and the United States both spent about 7 percent of their GDP on health care. Since then, as United States health spending has soared to 16 percent of GDP, Canadian spending has risen much more modestly, to only 10.5 percent of GDP. And while Canadian health care isn’t perfect, it’s not bad.”
It seems to me that what the president needs is a medical cost containment czar, someone who, wherever possible, will use the power of the executive to rewrite rules and procedures and write or rewrite or suspend regulations that would save money; and where the power of the executive does not apply, to get Congress to act to save money. In this atmosphere of frugality, empowering someone to go into every hospital and clinic and turn over every bedpan in a quest for savings is both good government and good poliitics.
Now, who could do it? You need somebody with business credibility. An efficiency expert. Someone who has run big organizations, and who knows government and health care. Say, is that Mitt Romney doing anything worthwhile?
[Cross-posted at JamieMalanowski.com]