In my post on Sunday (found here) I argued that Alabama was not spending enough on Medicaid. I did argue that we were paying for poor care and receiving it, but I also argued that rather than reduce the amount we are spending, we need to use a little more money differently and make people healthier. Jonathan Cohn in the New Republic posted a commentary today that bolstered my arguement. First, he acknowledges that to folks looking for money (as are the Alabama legislators), Medicare and Medicaid seems like a good place to look:
The rising cost of Medicare and Medicaid is the single biggest reason that, in the future, federal revenue won’t keep up with federal spending. The gap isn’t going to close unless health care spending comes down. And if it doesn’t close, future generations will be stuck with higher taxes, cuts to other federal programs, and/or potentially crippling deficits.
He also points out that there are some strongly held opinions about how the programs should be transformed:
Conservatives see Medicare and Medicaid as expensive government programs that interfere (wrongly, in their view) with the free market. If they had their way, they’d enact the sorts of changes Paul Ryan proposed in the House and Mitt Romney promoted on the campaign trail. Medicare would turn into a premium-support scheme, in which seniors would use vouchers to buy private coverage and the guarantee of benefits would be weaker than it is today. Medicaid would turn into a “block grant,” in which the federal government would write the states a check and allow them to spend it as they see fit.
He then argues, as I did, that the problem isn’t “bureaucratic waste” but systematic decay:
On the contrary, Medicare historically has held down costs as well as, if not better than, private insurance on a per capita basis. That’s thanks, in part, to the administrative advantages of a centralized government program and Medicare’s enormous power to set prices. Medicaid is cheaper still, to the point where, honestly, it’s underfunded. The programs keep getting more expensive, relative to inflation, because medical care keeps getting more expensive—and, in the case of Medicare, because of the increase in the number of people coming on the program. That’s due to a variety of factors: paying too much for services and to the people who provide them; delivering a lot of treatments that are unnecessary, unhelpful, or even harmful; focusing too much on acute treatment when we should be focusing on preventative care and other ways of keeping people healthy.
And he points out in the rest of his essay that the Affordable Care Act offers many opportunities to convert the $3.6 trillion we spend in taxes on health care into less than $3 trillion and coincidentally have a healthier, happier population. One of the profound change agents is the Center for Medicare and Medicaid Innovation, which unfortunately has been specifically targeted as a threat to the status quo. I hope that reason prevails and we elect to reduce costs by improving care rather than denying care to sick people.