• Medicare vouchers, the movie

    Jared Bernstein alerts us that,

    The Republican House Budget Committee has a snazzy YouTube video up featuring Rep. Paul Ryan defending his plan to voucherize Medicare. […]

    The basic flaw is that Ryan and his video pretend that the R’s Medicare plan gives consumers the power to negotiate directly with health care providers, who can thus use their voucher-driven bargaining clout to hold down prices.  But, in fact, that’s not how his plan works at all.  Under his plan, seniors get to negotiate with insurance companies, not service providers (doctors, hospitals, etc.). […]

    A few minutes in, the graphic complains that under the Affordable Care Act, a panel of “15 unelected, unaccountable bureaucrats decide how much, or how little, Medicare will pay doctors and which services Medicare will, or will not, pay doctors to provide for their patients.”

    Bernstein then explains, again, what’s wrong with this characterization. He did not mention that Rep. Ryan, though he doesn’t use the term “rationing”, strongly implies that Medicare will ration and, in contrast, private insurers would not. Finally, Rep. Ryan tells us that lower Medicare payments encourage providers to shift costs to those who are privately insured.

    I’ve already responded to similar claims regarding rationing and cost shifting. About the latter, Uwe Reinhardt recently delivered an astute observation,

    If hospitals simply shift costs to private payers whenever Medicare pays them less, does that not indicate that private payers have insufficient countervailing market power in the market for hospital care? And if that is so what supports the faith that private payers can control hospital prices and health spending per capita “through competition”?

    Rep. Ryan has never answered these questions. He could have done so in his nifty video. It’s a shame, because he is so good at explaining things. He really could be educating the public about how our health system actually works (and doesn’t), not how he perceives it or wishes it to work. In fact, the first couple of minutes of the video are quite good. I wish I could produce one half as good, but with twice the fidelity to the evidence.

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    • Can someone who supports the Ryan Plan just answer these two questions?

      1. If the Ryan plan is so great why are we waiting 10 years to implement it? Why doesn’t he proposed it go into effect immediately?

      2. If private insurance can control medical costs, why hasn’t it done so for the last 30 years?

      Anyone?

      I didn’t think so.