• The kindest cut

    Jared Bernstein is well worth following. His latest post, which I recommend reading in full, shows why.

    [T]he IPAB is a mechanism to control the cost growth of Medicare, to enforce, for example, the cost effectiveness I talk about here.  I recognize that one can twist this search for more efficient health care delivery into Ryan’s accusation [of rationing], but there is a fundamental difference between “denying care” and insisting of cost effective care.

    Not paying for ineffective care is the kindest cut. One can certainly argue how to do it, to what extent it can be done without harming any patients, and so forth. But to not even try, in the name of “rationing,” is foolhardy. Don’t we want our tax and premium dollars spent wisely, thoughtfully, and not wastefully?

    Do we not ask the same of any other avenue of expenditure? Health care is different for a lot of reasons, but it is not different in the sense that there are trade-offs. We can make them haphazardly and thoughtlessly or we can attempt to do better. I suggest we try “better.”


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    • From an economist’s POV, is there any difference between subsidizing inefficient care and rationing? Take two equally effective treatments, but one costs twice that of the other. If we pay for both, I think we are subsidizing inefficient care. If we only pay the lower rate, requiring people to make up the difference OOP, some call this rationing. To me, it just seems like refusing to subsidize inefficiency. This argument drives me nuts.


      • “Rationing” has almost no meaning since every system rations somehow. Clearly it has been hijacked to imply something nefarious, to conjure up the fear that something that one should get, that one deserves, has been promised, needs, will be withheld. I doubt anyone would argue for an equivalent treatment that costs twice the price if they have to buy it with their own money. To me, that’s enough to say it isn’t “rationing” in the sense it is implied.

        I recognize this gets thorny when we move from “typical” or “average” responses to real-world heterogeneity of treatment effects. How much heterogeneity should we accommodate with public funds? The answer cannot be “all of it” to avoid “rationing.” For, if that’s the answer, we should have no problem extending Medicare to every man, woman, and child, independent of age. How does one justify withholding Medicare from me (“rationing” in the extreme) and not from my mother?