Who pays?

Matt sent me an email link to this article with the cautionary admonition "about why more government control over who pays what can break bad."

Matt may be surprised to see that I agree to a large degree. Government is very powerful, and misuse of that power (whether due to ideology, overzealousness, incompetence or corruption) is very dangerous. Medicare is a great example of a government program which far exceeds its original mandate with many pernicious effects. The effect of the 800-lb gorilla on the market for healthcare services has been enormous -- much of it to the detriment of providers, whose ability to market their services is extremely curtailed by the de facto price controls imposed by CMS. CMS has also become a de facto regulatory body for the delivery of health care -- in many ways this was good and necessary. But the overzealousness of the regulators (i.e. the Joint Commission) has also greatly increased the cost and burden on health care providers, and stifled innovation. EMTALA was enacted through the auspices of medicare; and while EMTALA was an inarguable good, the way it was enacted allowed the government to impose this requirement on health care providers while performing an end-run around the need to fund it.

For the record, while the idea of "medicare for all" single payer is appealing, the reason I do not support it is that giving government the monopsony on health care would exacerbate these problems.

This does not mean that I have flipped to a free-marketeer. Nor do I want to privatize or eliminate Medicare. What I favor is a mixed approach, where limited government funds are disbursed when they are the only viable approach to a given problem, and where governmental intrusion to the markets is restrained and regulated.

Having said that, it needs to also be pointed out that private industry funding for health care is not a lot better if unregulated. The insurance industry is no less aggressive in trying to depress or deny payment to providers and benefits to subscribers; their size and monolithic political power has allowed them to greatly influence legislatures to their benefit. Industry is also ideological in terms of what it will fund (abortions, contraception, experimental treatments), and is less accountable than public agencies.

We chart a narrow course between scyllis and charybda, and the balance is very tenuous. Which is why I was glad to see that all three democratic plans for health care reform still preserve both public and private entities as payers. The solutions they offer are not perfect, but at least seem to promise to achieve universal coverage without worsening the situation.