Fixing What Already Exists Before Adding More

Virginia Postrel has what seems to be a perfectly reasonable suggestion:

Think about this for a moment. Medicare is a huge, single-payer, government-run program. It ought to provide the perfect environment for experimentation. If more-efficient government management can slash health-care costs by addressing all these problems, why not start with Medicare? Let's see what "better management" looks like applied to Medicare before we roll it out to the rest of the country.

This is not a completely cynical suggestion. Medicare is, for instance, a logical place to start to design better electronic records systems and the incentives to use them. But you do have to wonder why a report that claims that Medicare is wasting 30 percent of its spending thinks it's making a case for making the rest of the health care system more like Medicare.

Of course, I think both Obama and Congress know that either 1) such savings are impossible and/or 2) such savings would require steps painful enough to have millions of users squealing.


  1. Dr. T:

    The estimates of waste in health care are much too low, because the metrics usually assume that the patient was properly diagnosed and received appropriate treatment. Neither is true in a large percentage of cases. My personal estimate of waste in healthcare: 70% for Medicare, 70% for insured patients, and 50% for uninsured patients. Some of this waste is bureaucratic, some is fraud, but much is due to low clinical competency.

    The world of "complimentary and alternative medicine" (otherwise known as quackery) is even worse: the waste is >100%. The same is true with self-treatment with herbal products and nutritional supplements. How can waste be greater than 100% of what was spent? Easy. First, the money spent is almost all waste (only rarely does someone buy a supplement or herb that fixes the problem). Second, when the quackery doesn't work and the patient goes to a physician, the disease is more advanced and costlier to treat. Third, some of the herbal products cause illnesses due to toxicity.

    Retraining the majority of clinicians (physicians, nurse practitioners, physician assistants, clinical pharmacologists, etc.) on the proper approach to diagnosis, the efficient use of testing and consults, and how to save money using trials of therapy or just watching and waiting would save tens of billions per year. Eliminating quacks would save more money, though the libertarian in me says people should be free to make decisions, even foolish ones. Eliminating government and health care insurance bureaucracies would also save a fortune, but I see no way to do that in our current political climate.

  2. jt:

    I just became eligible for Medicare last year, and it's fascinating to see what a lousy deal it offers. First, there's a little matter of the waiting period: Before being allowed to collect any benefits, I had to pay premiums (payroll deduction) for roughly 40 years. Second, the coverage I now get is so full of holes that I need to spend an additional few hundred dollars a month in private coverage just to keep the level of coverage I used to get from my no-frills HMO plan. And the government loses money on this scam? Gimme a break.