Tuesday, March 4, 2008

Future of Medicare

I, for one, like Medicare. I saw the service my aging and ailing mother received when she had her Medicare delivered through a private insurance company...several of them, because they kept dropping her until she eventually had no choice. She, a good conservative Republican, hates Medicare.

In Indiana, since leaving Florida, she has been on Medicare. From my perspective, the one who pays her bills and takes care of her. medicare is far, far, superior. The coverage is better and the paperwork is reduced.

Having said that, an article in yesterdays NYT on Medicare http://www.nytimes.com/2008/03/03/us/politics/03qhealth.html?ref=us

suggests the Medicare is in serious trouble and none of the current presidential candidates are really addressing it, and the Dems, who do, their plans won't help. This analysis, unlike most which posit that it is demographics that is driving the problem, suggests otherwise. An excerpt:

Peter R. Orszag, director of the Congressional Budget Office, said, “The bulk of the projected increase in spending on Medicare and Medicaid is due not to demographic changes, such as increases in the number of beneficiaries, but to increases in costs per beneficiary.”

And what is driving those costs?

“Most of the long-term rise in health care spending is associated with the use of new medical technologies,” the budget office said in a recent report. It suggested that more selective use could save substantial amounts — a prospect that alarms manufacturers of some medical devices.

The article continues on about the problems. There were two items that were not mentioned. One, that the system is unsustainable because medical providers can't make any money and two, what if everyone was covered by Medicare, with younger, healthier folks helping to pay for the older folks. Private insurance has a huge disincentive to hold onto older, sicker, patients, while Medicare, well, the economics are different.

2 comments:

Robert Guell said...

Medicare is a looming financial disaster that will hit us in the second term of whomever wins this Presidential election.....and no one is talking about it. Consider this (for both why costs per patient per year are rising and lifetime costs per person will likely rise):
Medical science has figured out how to separate regenerative cells from other cells in human organs and a company, Tengion, is already growing new replacement bladders from patients' own cells (thus eliminating the concern for rejection.)
Consider this: When organ failure is the ultimate cause of death for most people who make it into their 80s and 90s, what prevents us from simply perpetually regrowing those failed organs? Who will pay for THAT?!?
Dr. Steiger "likes Medicare" and seems to want to extend its umbrella and costs to everyone. But to what standard of care are we going to make everyone entitled? The best science has to offer? If you make the moral argument (like most liberals I know will and most consistent pro-lifers I know will) that we have to pay anything we can, then we will quickly run into a financial death spiral.
If we get to a point where we really can replace our organs, we need to face reality and extend the retirement age into the late 70s or early 80s. We simply cannot afford to have 60% of the population dependent on the earning capacity of the remaining 40%.

Robert Guell
Professor of Economics
Indiana State University

Anonymous said...

Rationing of medical care is already occurring. We (and especially conservatives) like to pretend that it is a matter of choice, that there is a market for medical care and we are making rational choices about it. That we might instead, make a rational but collective decision about that rationing, simpley strikes, fear into the conservative soul.

I personally am not in favor of extend life at any cost. Nor am I in favor of if you have the coin and can afford it you can get whatever you want (like buying likely stolen organs for transplants).

The mistake that Prof Guell is making, however, is that quality of life as well as life extension have far less to do with the expensive medical technologies and new procedures, than with basic kinds of things, like public health, altering behaviors, etc.

We'd need fewer livers if we could eliminate problem drinking; reduce obesity and diabetes and you are going to reduce medical costs quite a bit. Just a 10 lb weight reduction is like a 35lb weight reduction on knees which are designed to wear out.

BUT, there is very litte money to be made in such approaches, whereas, new organs, well, that is a different thing.

If we can curb pollution with a cap and trade system, why not do the same with health related behavior? 10 pounds over weight? More tax on you (it could be collected at the doctors office).

The problem is not going to be solved by throwing out the old and ushering in a new. It will be sovled with small but significant changes (and I don't mean incremental tax increases).

A basic health care system should be guaranteed and paid by tax money. If you want a face lift or botox, that comes out of pocket. Those are easy decisions to make, the harder ones are who pays for prostate cancer? Eventually all men get it. But most of us are going to get it when we are pretty old. have the surgery? Why? Should it be guaranteed that you get it if you want it? If you have the coin sure. But if you don't? Eventually it is going to kill you, but something else is more likely to, even if you ignore it, if diagnosed at 79.

We are refusing to collectively make those decisions, instead, hiding behind "let the individual (market) decide."

Tom Steiger
Professor of Sociology

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