Wednesday, September 05, 2012
More on Competition
The subject of economic competition among the providers of
health care apparently remains too delicate for anyone – even right-wing
Republicans - to take on directly.
The Op-Ed page of the September 4 issue of the Omaha
World-Herald carried a column by Bill Keller of the New York Times commenting
on the predicament of Democratic Congressman Ron Wyden (Oregon ) who co-sponsored what is now known
as the Paul Ryan budget proposals. Those
proposals include an option in Medicare that would allow beneficiaries to
decline traditional benefits in favor of a voucher to be applied to health
insurance purchased in the private market.
Midway in the piece, Keller says that “By introducing a
measure of choice and competition, Wyden hoped to prod health care providers
toward more efficient practices….”
Missing from all this is a description of just how the
Medicare voucher would cause providers to become more efficient while
preserving choice.
The only kind of economically effective competition in
health care that I have been able to imagine is one in which patients gravitate
to providers that offer the highest quality of care at the lowest cost. Patients conceivably could do that themselves
as individuals, but under the Medicare voucher proposal they would have to do
it through an insurance company. The
obvious way for the insurance company to do it is by contracting with the best
providers and not with the others. But
that limits choice.
Maybe some day the advocates of Medicare vouchers will
explain how all that would work, but they haven’t done so yet.