"Traditional Medicare works better, and more cheaply, than most private-insurance plans."
. . .
At a seminar organized by the Brookings Institution last December, Aaron, along with two other experts on health-care policy—Judy Feder, a professor at Georgetown, and Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities—explained why he now thinks it would be dangerous and foolhardy to switch to vouchers, and why sticking with a modified version of the existing system is a much better idea for seniors. “My text today is the remark attributed to John Maynard Keynes,” Aaron wrote. “When the facts change, I change my mind. What do you do, sir?”
And what are these facts?
1. Traditional Medicare works better, and more cheaply, than most private-insurance plans. With tens of millions of enrollees, Medicare can exploit its bargaining power to pay health-care providers less than private insurers do: that is the great advantage of a single-payer system. Typically, doctors and hospitals receive twenty or thirty per cent less from Medicare for a given procedure than they do from private insurers. They don’t like it, but they need the business.
2. Medicare’s big challenge is demographics, not cost inflation. We’ve all seen the projections: if nothing is done to constrain it, spending on retiree health care will virtually swallow the federal budget. But what’s driving that spending is the growing number of enrollees—another million and a half Baby Boomers every year—rather than rising spending per person. “[W]hen it comes to what health-care costs per person, Medicare’s growth rate is remarkably low,” Feder pointed out—about three per cent a year over the next decade, according to the latest projections, which is considerably less than the cost inflation in the private-insurance sector.
MORE. . .
http://www.newyorker.com/online/blogs/johncassidy/2012/08/privatizing-medicare-a-supporter-recants.html
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