November 18, 2003
Medicare: A shell game.
Amy Goldstein and Helen Dewar, Washington Post writers entitled their article, Republican Medicare Plan Faces Challenges. It might have been more appropriately entitled, The Great Congressional Shell Game. When the GOP and the Whitehouse announced they were selling the plan before the 1100+ page document is even completed and before more than just a handful of Congresspersons even know what it contains, I knew it was time for alarm.
Some of the writing is on the wall. With all the good deregulation that brought us Enron, the ExxonMobil suits, the 401K money market illegal thefts of investors funds, and higher utility costs, the new Medicare Bill will turn a corner of good will and regulate where patients can get their care, underpay millions of citizens through recipient paid membership cards, annual deductibles which increase over time, increase pay for doctors and hospitals and do nothing to lower the costs of prescription drugs. There has to be some good things about the Bill, right?
Maybe! One of the proposals appears to be good on its face, but, in fact, may turn out to be little more than a ruse to help sell the Bill. One of the proposals is to permit recipients to purchase medications from Canada at lower costs. Sounds good. But, while the Bill may allow for it, it could begin only with the permission of federal health officials who have openly opposed the idea. This may be a case of what the one hand giveth, the other taketh away.
Sen. Tom Daschle (D) states, "It keeps drug prices high, causes 2 to 3 million retirees to lose drug coverage and coerces seniors into HMOs." Sen. Olympia J. Snowe (R) (Maine), said, "I remain deeply concerned about the specific impact this 'agreement in principle' will have in the real world for millions of Americans who count on Medicare for their health coverage, in particular the untested premium support plan,". Snowe refers to the Bill's proposal to invite private plans to compete directly with Medicare in the future which could lead to a complete privatization of Medicare. The AARP's leaders have indicated favor with some of the proposals but refuse to endorse it until they have a written copy of the Bill for review.
A prescription drug benefit was largely pushed for by Democrats who would now be politically vulnerable to opposing the bill no matter how much of it they disagree with. Some Republicans can comfortably view this Bill as a first installment on the complete privatization of medical care in America leaving quality care for those who can afford it (have earned it) and charitable assistance for the rest of Americans who can't afford health insurance (didn't earn it). In the final analysis, senior citizens are going to get an overhauled Medicare program fashioned in an election year which may do more harm than good and promise a lot now, but, give very little for the participant's dollar later on.
While socialized medicine simply would not fit the American societal model, a single payer plan through the federal government is where America has to end up. It would be so much less expensive to establish today, than it will be a decade or two from now. But, visionaries seem to be a bit scarce in these days of fear and deficits on both sides of the aisle.
Posted by David R. Remer at November 18, 2003 09:45 PMTomPaine.com is carrying an article written by the Medicare Rights Center(medicarerights.org) that summarize the bill. It is available here:
http://tompaine.com/feature2.cfm/ID/9425
Whether America moves to socilized medicine or not, is kinda moot. It is the cost of the medicial services(drugs, dotors, etc) that is killing us. A “correct” solution is one that finds a way to keep the costs from raising quicker than inflation. e.g. Canada price fixing of drugs.
Until someone addresses the cost side of things, we’ll just be shuffling money around. Either higher taxes from my paycheck to pay for gov’t healthcare or higher insurance premiums to pay for private healthcare. I’m getting screwed either way.
Ok, I’ll stop ranting now.
Pheldan, I agree with you, and am convinced now that socialized medicine will not work in America. However, a single payer plan through the federal government similar to what our fearless leaders in D.C. have, could work. The reason it could work is that one provider would be negoitiating for contracts for all the eligible persons. That kind of aggregate buying and negotiating power would exercise the competitive bidding process of free enterprise to reduce the costs of health care in America.
Also, making federal dollars to universities contingent upon University based pharmaceutical research and development could greatly reduce the cost of meds in this country by eliminating the profits of a large of amount of R&D and stimulating private sector pharmaceuticals to become more cost effective and competitive in their Research and Development arenas.
Posted by: David R Remer at November 19, 2003 09:20 AMAye, I agree collective bargaining is a powerful tool. Medicare should be able to use it to get better prices… but I vaguely remember hearing this latest bill prevents Medicare from doing just that.
The federal government does already “underwrite” some drug research and drug companies do make use of that R&D.
As for drug companies becoming more cost effective in their R&D, I’d have shrug and say that really more of a technicalogical thing. Only so many experiments one can run in a day with current technology. If I’m remebering right drug companies typically spend $3-$5 on marketing for every $1 spent on R&D. An SEC filing on a drug company should prove or disprove that.
I believe the underlaying reason why drugs in the U.S. cost so much is because of the IP laws. First one to develop it and patent it can charge whatever the hell like for it. Price tends not to be factor, if the drugs will keep one alive. If a magic pill was patented tomorrow that cure cancer, how much could they charge for it? Which kinda highlights the problem, the focus is on making money not helping people. yeah, yeah, I know that makes me sound like some sort hippie communist. Go flower power. ;)
Its a sticky wicket, balancing the (financial)incentive to produce against the needs of the people. Personally I think a shorter patent lifetime would help, something around 5 years. Gives the inventor enough time to recoup costs&turn a profit, after that generic versions would drive down the overall price of the drug.
David you are right about one salient point: we have a lack of visionaries in leadership positions in this nation. It is clear that health care costs are fueling more than just the Medicare debate, they are also a huge sticking point in labor relations across the nation and could account for at least some American job lose to overseas markets.
I also agree that the government needs to step in and provide a single source for America’s health care needs, at for those below the poverty level, and the disabled. Why not a government formed and owned corporation along the lines of the Post Office, or the FHA, whose express mandate would be to purchase medical supplies and prescription drugs not only for Medicare, but for the Dept. of Defense, the Veterans Administration, and other federal workers as well. Imagine the bargaining power of such an agency. Most Americans do not realize how much money the government already spends buying medical equipment and supplies for VA and military hospitals and prescription drugs for same; the cost is already in the billions of dollars. Add Medicare to that mix; consolidate under one agency, and automatic cost controls are built in, via economies of scale.
As far as socialized medicine, I think a model would work in the United States albeit in a modified form taking into consideration our over obsessive love affair with the free-market economy. Simply, put, those who can to pay will, and those who can’t will have the government foot the bill; adequate health care is not a privilege it’s a right that should be enjoyed by all human beings not just the one who can afford to pay for it.
Lastly, the only way I believe, to control costs, is with government intervention, period. Our free-market system is now too steeped in greed to trust the “market” to hold down costs.
