Rich Tucker

It’s an iron law of economics: You can’t get something for nothing. And yet politicians love to promise to hand out benefits, but are often reluctant to pay for them. So something’s got to give.

As proof, look across the pond, to Great Britain’s “free” health care system. There, patients “are facing more pain and longer waits,” the Associated Press reports. “That’s because the National Health Service is being forced to trim 20 billion pounds ($31 billion) from its budget by 2015, as part of the most radical changes made since the system was founded more than 60 years ago.” And “free” health care is only going to get more expensive, for taxpayers and patients.

The British government plans to fire some 20,000 health care workers and close a large number of hospitals. Even so, health care analysts there say hospitals are making patients wait for care, in the hope that some will decide to pay for it themselves or die while waiting.

“At some point, we’ll have to look at what the boundaries are of what governments provide and what people will be paying for themselves,” Mark Pearson, head of health at the Organization for Economic Co-operation and Development in Paris, told AP. “At the moment, countries aren’t ready to have that discussion yet, but that breaking point will come one day.”

Maybe it’s time to have exactly that conversation here in the U.S. Medicare would provide the ideal opportunity.

“Before concluding work for the year, Congress must tackle other major issues as well, including figuring out how to avert a scheduled deep cut in reimbursement rates paid to doctors under Medicare,” the Washington Post reported on Dec. 12.

But why? The deep cut is supposed to be a feature, not a bug. In an attempt to rein in Medicare spending, Congress created a payment formula that would supposedly have trimmed reimbursment payments to doctors every year since 2003.

Instead, lawmakers have chosen to override their own price controls. “Congress has voted repeatedly to temporarily extend or increase existing reimbursement rates through deficit spending,” Peter Suderman wrote in Reason magazine. “The temporary patches have substituted for permanent fixes because no one knows how to pay for a long-term fix. But by relying on a series of temporary patches, Congress has made it even more expensive to enact a long-term fix.”

Because lawmakers have voted to cancel the annually-scheduled cuts, physician reimbursement rates are set to plunge by almost 30 percent next year. That’s the cut that the Post notes Congress intends to avoid with the latest version of what’s now called “Doc fix” legislation. But, again: why change the policy every year at the last minute? All year long lawmakers pretend they intend to change Medicare, and they end up not only preserving it, but making it more expensive.

Here’s an idea. Instead of simply passing “Doc fix” year in and year out, let’s actually fix the problem by “bending the cost curve” and holding down Medicare expenses.

Earlier this year, Rep. Paul Ryan introduced a plan that would transform Medicare for anyone under the age of 54. When these people retired, they’d be given a voucher that would be used to buy private insurance.

It’s a solid idea. Retirees could pick and choose what plan would work best for them. They’d have a personal involvement in their health care, and in holding down costs. As for whether these retirees could actually handle the responsibility, remember that they’ve been buying and selling things: houses, cars, food, all their lives. They’ve raised children, held jobs, planned weddings, run businesses. They’re certainly capable of selecting a plan that provides for their health care needs.

These plans don’t exist yet, of course. But they’d spring up if people actually had Medicare vouchers to spend. And the price competition would hold costs down much more efficiently than Congress’ failed spending caps have.

The federal government can’t go on borrowing almost half of what it spends today from tomorrow’s taxpayers. We need to change course, before an iron law of economics crushes us the way it’s already crushing democracies in Europe.


Rich Tucker

Rich Tucker is a communications professional and a columnist for Townhall.com.



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