Healthcare Reform Update

Universal healthcare in Massachusetts actually lowered costs.

"A new study by the National Bureau of Economic Research is the first to track hospital costs in Massachusetts, where a 2006 law became a model for national reform. It finds that 93 percent of people in the Bay State are now insured. But despite an influx of patients, total hospital costs haven’t grown more than usual. New efficiencies probably helped: thousands fewer patients now use the ER for routine care or show up because of a preventable condition. And the average length of a hospital stay is down an hour per person. But University of Pennsylvania economist Jonathan Kolstad, who coauthored the study, speculates that the real heroes could have been insurers, who bargained with hospitals. If the same clout is exercised nationally, optimists may be right about reform’s cost savings."

Greedy, irrational seniors don't want other Americans to enjoy their same government run healthcare.

"The very people who currently enjoy the benefits of a subsidized, government-run insurance system are intent on keeping others from getting the same treatment. In part, this is because seniors think of Medicare as an 'entitlement'—something that they have a right to because they paid for it, via Medicare taxes—and decry the new bill as a giveaway. This is a myth: seniors today get far more out of Medicare than they ever put in, which means that their medical care is paid for by current taxpayers. There’s nothing wrong with this: the U.S. is rich enough so that the elderly shouldn’t have to worry about having health insurance; before Medicare, roughly half of them didn’t have it. But the subsidies that seniors get aren’t fundamentally different from the ones that the Affordable Care Act will offer some thirty million Americans who don’t have insurance. Opposing the new law while reaping the benefits of Medicare is essentially saying, 'I’ve got mine—good luck getting yours.'"

Why does Medicare set the price for the services it provides and who created this "Soviet economic" system?

"It was the administration of President Ronald Reagan, with the concurrence of a Congress controlled by the
Democrats."

"The Reagan administration acted after it became alarmed at the inflationary force inherent in a payment mechanism adopted by Medicare at its inception, at the behest of the hospital industry: retrospective, full-cost reimbursement of each hospital for its reported costs."

"After exploring a number of alternatives, most of them probably not politically feasible, the Reagan administration and Congress decided to switch, during 1983-86, to set, centrally administered prices. It’s hardly likely that the Reagan administration or Congress thought themselves inspired by Soviet theory, a notion that has been advanced more recently. These policy makers just thought the new system made more economic sense."