Sunday, October 07, 2007
Competition and Ambivalence
From time to time I contribute to an organization called Citizens Against Government Waste (CAGW), not because I subscribe to all of its right wing political positions, but because I think that with all of the lobbying groups that are pressuring the federal government to spend more money, there ought to be at least one pushing in the other direction.
Recently CAGW got its knickers in a knot over a report by Medicare Trustees indicating that the Medicare Hospital Insurance Trust Fund is now spending more on benefits than it takes in. The surpluses that the Fund has realized since its founding in 1965 have been “borrowed” from the Fund by the federal government. The money has been transferred from one branch of the federal government to another and not counted as part of federal deficits.
But now that these “borrowings” have to be paid back, the Fund has moved from the income side of the federal government’s ledger to the expense side. Given the magnitude of the deficits already being incurred, that is cause for alarm, at least in the eyes of CAGW.
One of the remedies suggested by CAGW is “reforming Medicare to eliminate the deficits in the program.” After paying lip service to reducing waste, fraud, and abuse, CAGW recommends the encouragement of “true competition among private insurance plans to hold down costs.”
Being politically conservative in outlook, CAGW is comfortable with the idea of competition. I find it interesting, however, that it focuses on insurance plans and not on providers. I wonder how CAGW thinks that insurance plans are going to hold down the cost of health care unless they can get providers to do so. It didn’t suggest how it thinks the plans should go about doing that.
One answer would be to get providers to compete, as well. But CAGW apparently isn’t willing to go that far.
We continue to be ambivalent on the issue of whether or not there should be market competition among the providers of health care. Anti-trust says there should. Certificate of Need says there shouldn't.
Until we resolve that, the route to health care reform will remain murky.
From time to time I contribute to an organization called Citizens Against Government Waste (CAGW), not because I subscribe to all of its right wing political positions, but because I think that with all of the lobbying groups that are pressuring the federal government to spend more money, there ought to be at least one pushing in the other direction.
Recently CAGW got its knickers in a knot over a report by Medicare Trustees indicating that the Medicare Hospital Insurance Trust Fund is now spending more on benefits than it takes in. The surpluses that the Fund has realized since its founding in 1965 have been “borrowed” from the Fund by the federal government. The money has been transferred from one branch of the federal government to another and not counted as part of federal deficits.
But now that these “borrowings” have to be paid back, the Fund has moved from the income side of the federal government’s ledger to the expense side. Given the magnitude of the deficits already being incurred, that is cause for alarm, at least in the eyes of CAGW.
One of the remedies suggested by CAGW is “reforming Medicare to eliminate the deficits in the program.” After paying lip service to reducing waste, fraud, and abuse, CAGW recommends the encouragement of “true competition among private insurance plans to hold down costs.”
Being politically conservative in outlook, CAGW is comfortable with the idea of competition. I find it interesting, however, that it focuses on insurance plans and not on providers. I wonder how CAGW thinks that insurance plans are going to hold down the cost of health care unless they can get providers to do so. It didn’t suggest how it thinks the plans should go about doing that.
One answer would be to get providers to compete, as well. But CAGW apparently isn’t willing to go that far.
We continue to be ambivalent on the issue of whether or not there should be market competition among the providers of health care. Anti-trust says there should. Certificate of Need says there shouldn't.
Until we resolve that, the route to health care reform will remain murky.
