Tuesday, April 24, 2007

Democrats, Republicans, and Medicare Part D

Split-Potomac Soup, or Innovative Prescription?

“Medicare—originally a system in which the government paid people’s bills – is becoming a system in which the government pays the insurance agency to provide coverage..The political news over the last few days has been grim. First, the Senate tailed to end debate on the bill – in effect killing it – that would have allowed Medicare to negotiate over drug prices… Public opinion is strongly in favor of universal coverage, and for good reason: fear of losing health insurance has become a constant anxiety among the middle class. Yet even as we talk about guaranteeing insurance for all, privatization is undermining Medicare.”

Paul Krugman, “The Plot Against Medicare, “ New York Times, April 2-0, 2007


“Republicans won a big victory this week, shooting down a Democratic plan for more government-run health care. The GOP victors, and free-marketer, might send their thank-you notes to Dr. Mark McClellan. Dr. McClellan’s came online and wowed the oldr class. Private companies have flocked to offer a drug benefit, giving most seniors a choice of 50 innovative plans The competitive jockeying has slashed prices form an expect $37-a-month premium to an average of $22. The cost of Medicare Part D for taxpayers was 30% below expectations its first year –unheard of in government.

Kimberley A. Strassel, “Competence Man: The Dr. McClellan Medicare Cure, “ The Wall Street Journal, April 20, 2007


Democratic and Republican “dialogue” about containing health costs has become a non-dialouge. It is like two ships passing in the night, both in the dark and both plowing ahead in parallel courses without listening to another.

As I said In my book Innovation-Driven Care (Bartlett and Jones), “Innovations differ from “issues.” Issues tend to be political, divisive, insoluble, and despairing. Innovations, on the other hand may transcend politics, heal wounds, inspire hope, and even solve vexing problems in a practical and impersonal fashion. Where you stand depends on who benefits – and how much. It boils down to a win-win, win-loss, and loss-loss situations. A win-win is another word for innovation. This analogy may not apply to politics.

When it come to containing health costs, three schools of thought exist: 1) the all government nirvana school; 2) the “let the market decide” school no matter what the consequences ; and 3) the government-market partnership innovation school.

I belong to the third school. We have no other choice. Government now pays for 47% of health costs, but has a miserable record of containing costs. The private sector pays for 53% of costs but lets too many “uninsured” fall through the cracks.

Democrats argue that government-guaranteed universal coverage is the only compassionate, equitable, and egalitarian way to go. Republics assert the American people want a decentralized system offering choice, value, and access to the best and latest technologies, something only “free markets” can offer.

As usual in politics, both parties feel they’re totally in the right. Rarely do they seek some innovation that would split the difference, even if that is the only realistic solution.

In Republican eyes, the current innovative Medicare Part D qualifies as “innovative” because it has achieved 90% coverage and 80% senior approval rating - not a bad prescription for a capitalistic system.

But in Democratic eyes, with that damnable “donut hole, ” absence of “universality, “ and lack of drug price controls by government, it’s a bad, even a disastrous, way to treat the problem.

Irving Kristol’s book Two Cheers for Capitalism (Basic Books, 1978) comes to mind. Why not two cheers for the Medicare Part D plan that covers 90% of seniors and satisfied 80% of them? It works, it lowers costs, it gives access to most prescription drugs on the market. The answer is that we should always try for three cheers – equality and social justice for all. The problem is that a decentralized capitalistic society rarely reaches for utopia and rarely seeks more than two cheers for itself.

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