Tuesday, December 08, 2009

Medicare for me?...

One of the ideas being batted around in the attempt to find a compromise health bill is to lower the eligible age for Medicare to 55. This looks at first blush like a brilliant political move becuase even as critics of reform scream about "not socializing medicine", they shout equally loud about keeping hands off Medicare (the most socialist form of health care we have).

Apparently socialized medicine is bad for other people.
There may be a solution coming soon. Medicare may shortly have a buy-in for individuals between 55 and 64 years of age. This could solve a great many problems. The doctors and hospitals would get paid. The insured would be able to continue with their services and with their personal physician in most cases and the Medicare system would have money coming in to offset the expense of treating this group of people.
In addition, statistics show that people age 55 to 65 usually have less medical issues and less medical treatment than most people 65 and older. As a group, they have taken care of themselves better, they are healthier – or at least, the onset of serious health issues that come with age haven’t set in yet – and they tend to see the doctor less, using prevention rather than a cure.
The Medicare Buy-In may take a little time to put into place. Lawmakers are working out the details that would help cover the over 5 million boomers between age 55 and 64 who are uninsured. There would be premiums on a monthly basis to the tune of a few hundred dollars, but the premiums should be less than keeping up with payments for the insurance from the old job and COBRA. [More]

There are intriguing implications for this action. First, would it affect jobs by eliminating one big reason older workers are hanging on?  If so, this might free up some openings for younger workers who are facing a dismal job market.
New data shows that older workers are staying on the job longer causing younger job seekers to be squeezed out of the job market.

A new report by the Pew Research Center's Social and Demographic Trends project revealed that the recession is having a very different impact by age. The downturn is keeping older adults in the workforce longer and younger adults out of the workforce longer.

But according to local employment agencies it is not just the recession causing older workers to stay on longer, they want to keep working and employers want them. [More]

Another consideration is how this might impact rural America, where health providers have long felt improperly compensated.
This is a totally fair complaint. If we’re going to have two different houses of congress, I think it would make sense to elect one of them on some non-geographical basis so as to cut down on the level of parochialism. And if we’re going to have geographically based representation, it ought to be done fairly, not with a system that lets North Dakota have much more representation than Los Angeles County which has 15 times the population. And if we’re going to have an unfair system, it would be nice to at least see some more high-mindedness from the people representing the giant empty square states.
All that said, there’s a real issue here that’s been lurking in the background of a lot of these health reform debates. The system Medicare uses to determine how much money doctors and hospitals get for treating patients contains a heavy geographical component. In other words, the same procedure gets a different level of payment depending on where it happens. Not surprisingly, the political result of this is that everyone is perpetually convinced that their area is underpaid. And in particular, politicians from rural areas believe very strongly that Medicare is underpaying their health care providers.
But is this actually true? I’ve been trying to figure it out for months and . . . it’s hard to say. This post on the Health Beat Blog is an excellent primer on how Medicare payment works. But merely knowing the facts doesn’t really answer the question. That’s because a big part of the issue is a somewhat normative dispute over what we should be trying to accomplish with our policy. In general, the costs of things are lower in rural areas. But when you get into highly specialized medical care, it’s very inefficient to try to provide them in low-density areas. This is why hospitals are generally clustered in central cities. And for people who live in low-density portions of metropolitan areas, the fact that you might need to travel a ways to get specialized medical care isn’t such a big problem—you’re more concerned about getting treated than about the long commute.
But in large swathes of the United States, there’s just no major urban area anywhere even vaguely nearby. Washburn, ND is four hours from Fargo and almost eight hours from Minneapolis. Naturally, people who live in rural areas would like as wide a range of services available to them as possible. So to them an appropriate reimbursement rate is one which is high enough to attract such a level of provider-capacity, and anything that falls short of that constitutes “underpayment.” But from a metropolitan perspective, that’s backwards. It’s just that like how you don’t see art house movie theaters in rural areas, it’s not possible for provision of certain services to be viable in some places without overpaying to specially subsidize them. [More]

Finally, doesn't this seem like a public option by steps?  With even more Americans enjoying the benefits/costs of Medicare, the comparisons will be even more available. I could see gradual rolling downward in the entry age as politics permit.  Especially if the alternative private solutions simply continue their current trajectory of costs and coverage even after their reforms.


Anonymous said...

--as a canadian I still find it baffling an advanced western country such as the US does not have or does not want a national health care system to be available to all....thinking if it is just finances,,how does that compare too military funding???-regards-kevin

Anonymous said...

Oh, goody. Another plan to strip mine everyone under 50 to pay for another entitlement. How many more wealth transfers can we have to the Boomers? I realize their HC are higher, but aren't they in their peak income years? Too bad we'll be broke by the time us younger folks will be able to cash in.

Brian in Central IL said...

In regards to the healthcare piece as a Canadian please elaborate on the reports we hear so often in regards to the state of Canadian Healthcare, Essentially long waits to see doctors, growing dissent amongst Canadians to move to a US system, quality of care. Funding is a major component, especially if tax dollars support items people do not support. Also, a component exists regarding free enterprise.

As for the military I do not think that to be a legitimate comparison. If military were to privitize that opens a whole host of issues, the least of which who is in charge. See the ending of the movie State of Play (awesome movie BTW with Russell Crowe.)

someguy said...

Your snide observation that apparantly socialized medicine is "bad for other people" implies a hypocrosy in those that are against socialized medicine but take advantage of medicare. That would mean you are equally hypocritacal for criticizing farm payments but still trying to maximize your own. You can act in your own self-interest since we are all taxpayers and paying for the benefits that are there, without feeling it is the wisest course of action. I think you might be accused of being hypocritical, not for taking the farm payments, but for criticising others who actively participate as benificiaries of government programs they don't support.

I also think it's misleading to talk about medical inflation. The problem isn't inflation, it's that new and better medical capabilities cost a bunch of money. We spend more of our national income on medical care, but we're buying better stuff. I do feel we have to address the fact that we probably can't afford to 'everything possible' for everyone. The question is who and how will care be rationed. I believe the free market is a better rationing mechanism than government.

someguy said...

Another comment I would like to make about the talking point repeated over and over by the left that everyone who has Medicare is satisfied, so how can you say socialized medicine is bad?"

The obvious reality is that socialized medicine (or socialized anything) can work great if you can define a privelidged class and force the rest of the public to subsidize it. Then it's a great deal for those who benefit and, if the public agrees with the validity of defining the privelidged class as deserving, then it will 'work'. It can't work the same way when everyone is in the privelidged class and there is noone outside it to subsidize it.

Anonymous said...

re: canadian health services--generally excellent-- true examples--father felt sick--went to hospital and had body scan and 6 hrs. later remove cancerous colon section and re-attach...myself--stomach pain in afternoon--doc sends me too hospital--do exploratory that night and remove appenditic...cost to us 0...true some get caught in red tape,,like getting in wrong line at bank or food outlet but (and wife is operating room tech) I would believe most are 95% immediate treatment...health services take better care of our people than the people do of watching there own health...free colonoscopy,bloodwork,physicals,ect...can't imangine going to merge and then wondering if i am going to lose the family home.

John Phipps said...


Your comments about hypocrisy are certainly right on. I welcome the day when I can afford to back up my repugnance to ag subsidies by not signing up. However, when I investigated it, such action has long-term penalties for landowners - not just operators. And frankly in our cash rent market, giving my competitors a $25 acre headstart doesn't work for me yet.

I did sign up some farms for ACRE simply because it lowered my payment, and felt slightly more honest. I assuage my conscience a bit by reminding myself I also respect the will of the majority.

But in the final analysis, my actions can be construed as hypocritical. At least I don't use heavily subsidized crop insurance.

Given your remarks about a privileged class, I am surprised you don't support reform to remove it. While the free market can allocate some resources like finance brilliantly, it has not been found effective in allocating humanitarian needs: the poor simply die from hunger and disease. What free market mechanism can you point to that delivers health care to the indigent.

It is this collision of economic efficiency and compassion that require a blend of methods, I believe. Our system looks remarkably different when someone you love is born with congenital or hereditary health problems, or your insurance becomes unaffordable.

someguy said...

John, I don't feel you're a hypocrite for taking farm subsidies. You outline the reasons that it doesn't make sense to turn down offered benefits because essentially, you are already paying for them, either as a taxpayer, or as a competitor to those that are taking them. My point is that simply that those who criticise an expansion of Medicare, or even the basis for it, don't give up their right to the benefits they are already paying for through taxes and/or the inflated medical costs that result from a system that requires doctors to overbill, because they know they aren't going to get what they actually bill for.

I think it's a little absurd to say that a market allocation of medical resources will result in a state where "the poor simply die from hunger and disease. What free market mechanism can you point to that delivers health care to the indigent."

Clearly both our society, and many of us as individuals through support of charitable institutions, are not willing to accept the poor dieing from hunger and disease. That doesn't happen in any but the most extreme case now. Nobody advocates eliminating medicaid and/or laws requiring emergency rooms to treat people. That's a straw man arguement that often emerges to justify a complete governent takeover of the system. The market allocates resources in medicine the same way it does with food...another human necessity that the poor don't have to do without. Individuals evaluate costs and benefits they receive and behave accordingly.

Anonymous said...

someguy: Do you really believe the poor should be content with health care only in emergencies? I don't know if you have children but I don't see how I could tell another person that they shouldn't care about routine checkups, preventative medicine, etc. for their kids. Also, it simply doesn't make sense for you to trumpet the success of free market medicine but then say you don't want to repeal medicare/medicaid. Either you believe in the free market or you don't. If you believe that we should keep medicare, then you believe some socialized medicine is necessary. Then contention then is that the U.S. has found the optimal balance between free market and government intervention. I personally cannot see how anybody could draw that conclusion, especially based on the myriad examples of better care available in other countries. Our system today works pretty well for the middle and upper classes. If that is all we care about, then let's keep it like it is. Otherwise we need to make some changes. You admit that less government support (removing medicare) is not the right approach. What else is there to try aside from greater government support?

John Phipps said...


The examples you cite are clearly extra-market, and not found on p/q curves. In fact, the solution you find adequate - mandating emergency rooms treat everyone - is about as socialist as you can get.

Worse still is such a system is stunningly inefficient as comparison to other systems of health care can show.

Finally, free markets are not a binary decision exempt from any curbs or constraints. We operate at one point between free and state controlled markets, other countries are at other points along the continuum.

Most importantly, it is the power of the state through laws such as patents and contract sanctity that make markets free. The two systems are intertwined and interdependent.

someguy said...

Your statement that markets are not binary is exactly my point, John. (I didn't say say I wanted the poor to only have access to Emergency Rooms....another straw man arguement you build up to knock down. I clearly said that the existence of the ER requirement, PLUS Medicaid, which gives the poor access to office care and 'government-run' health care.)
The present system is rife with examples of modifications to the pure free market system, and I never said that should be changed. My point is that we need to maintain the basic incentives at the margins of free markets that allow for the behaviours that make a market more effective, e.g., pricing ability to recoup investment costs of new drugs or medical equipment, some incentives for 'customer service' because private insurance allows choice of providers, variation in earnings of medical specialties based on market forces determining demand, etc.