Priceless: Chapters 12-14

Chapter 12 of John Goodman’s book Priceless is about patient safety and the malpractice system. This is not an area I have thought much about. If I’ve posted even once on the subject, it wasn’t memorable. So, no comment from me on Chapter 12.

In Chapter 13, it seems John advocates eliminating tax exclusion of employer-sponsored health insurance, in favor of a refundable tax credit. Though this is a worthy idea, it seems to contradict content of earlier chapters in which he argued for expanding the tax exclusion beyond the group market. I think I understand what’s really important to John, that all insurance be treated equally in the eyes of the IRS. However, by seeming to switch how he prefers to see this done and by not emphasizing his main principle, he risks confusing the reader. It is a bit hard to follow his thread.

John is right that crowd-out of private insurance by Medicaid is high: typically, for every two new Medicaid enrollees, one or more (but not as many as two) individuals leave private coverage. (Estimates found via the links here.) In light of this, Medicaid is far more expensive to taxpayers than it appears. Were it made even more generous, that would make it even more costly. However, system-wide (including the substitution of private for public spending), Medicaid expansion costs less (in dollars).

It’s good to see this:

The system described above would not be perfect. Far from it.

Chapter 14 is about Medicare. I know from emails John thinks major reform of the program is politically unlikely. I agree. I’m still going to push back on and flag a few things.

As we have seen, the Affordable Care Act uses cuts in Medicare to pay for more than half the cost of expanding health insurance for young people, but it contains no serious plan for making Medicare more efficient.

I disagree that the ACA has no serious provisions for making Medicare more efficient. To be sure, it does have provisions that just cut payments in crude ways. But it also has many that are aimed at efficiency. One can be skeptical that they will work. Maybe that’s what John means by “no serious plan.” He doesn’t find them serious. But many health policy experts do. I think they’re worthwhile experiments, provided we’re willing to consider some new things if they fail. Some of John’s ideas could be among those new things, as could premium support.

A key problem with the ACA’s reform of Medicare is that it only applies to Medicare. For that reason, the big cuts it promises are not likely to stick. Medicare beneficiaries’ experience cannot deviate too far from that of consumers in the commercial market. It isn’t that the ACA went too far. It didn’t go far enough. Or, if you don’t like the direction the ACA went, pick another one (like John’s). Either way, long term you can’t just reform Medicare. You have to address the whole system. That’s also a good basis for predicting the ACA was not the last major reform.

John’s presentation of figures that show what people get back from Medicare is less than what they put in is very different from what I’ve seen elsewhere (PDF). I don’t have time to figure out why, so I’m just flagging it. Perhaps I am misunderstanding something.

John summarized some of the premium support proposals that have been made. A ton on this by me is on this blog (premium support, competitive bidding).

John offers a solution to Medicare’s woes that includes a dizzying array of options and components. I’d have to spend more time, and perhaps read his more detailed paper (PDF), to understand it enough to comment more fully. I noticed he is proposing government risk-adjustment, something I thought he disliked. Again, confused. I wonder if he’s aware of my market-based risk adjustment idea. Also, I didn’t notice any discussion of the cognitive limitations of much of the Medicare beneficiary population. This is likely to be a chief concern among many defenders of the traditional program and, so, something John will need to address if he hasn’t already.

Chapter 15 will be covered tomorrow. Other posts in the series here.


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