Tuesday, October 02, 2012

Fee-For-Service Isn't "Market-Based"?

It's that time of year, when pretty much every columnist is tempted to phone in a column, putting words in the mouth of the President or his challenger that supposedly represent the truth, a message that they are convinced will win the race, or... allows them to easily meet a deadline. Among today's examples was this lazy example by David Brooks, his usual effort to put his own spin on the present set of Republican talking points. It's banal, and I was ready to ignore it until I hit Brooks' criticism of the Obama Administration's attempt to control healthcare spending by evaluating the efficacy of treatments,
The second approach, favored by me, is to scrap the perverse fee-for-service incentives and use a more market-based approach. I think there’s ample evidence that this could work, but, to be honest, some serious health economists disagree.
As expressed, the statement is an incoherent mess. In our market-based economy, if you want goods you pay for them. If you want services you pay for them. What does Brooks imagine to be more market-based than paying the fees required by people who is selling you their services.

In an effort to make sense of Brooks' argument, I headed over to Romney's website, and found this:
• Medicare is reformed as a premium support system, meaning that existing spending is repackaged as a fixed-amount benefit to each senior that he or she can use to purchase an insurance plan....

• “Traditional” fee-for-service Medicare will be offered by the government as an insurance plan, meaning that seniors can purchase that form of coverage if they prefer it; however, if it costs the government more to provide that service than it costs private plans to offer their versions, then the premiums charged by the government will have to be higher and seniors will have to pay the difference to enroll in the traditional Medicare option
In other words, Brooks is distorting Romney's proposal - rendering it incomprehensible in his retelling - to avoid disclosing that what Romney wants to do is replace Medicare with vouchers. Romney doesn't care whether health insurance is offered on a fee-for-service basis or on some other basis - he simply wants seniors to purchase it from private insurance companies, while constructing a premium structure that will discourage seniors from buying - or leave them unable to afford - traditional Medicare coverage.

Brooks goes from incoherent to insipid:
I’m willing to pursue any experiment, from any political direction, that lowers costs and saves Medicare. Democrats are campaigning as the party that will fight to the death to preserve the Medicare status quo. If they win, the lesson will be: Never Touch Medicare. No Democrat or Republican will dare reform the system, and we will go bankrupt.
The Democratic Party worked very hard to reform Medicare, hampered not by a lack of willingness to make the effort but by lockstep Republican opposition. Brooks knows that the Republican hope was that, between demagoguery, obstructionism and , the reform effort would fail. The goal was not to offer a better alternative - that can be seen from the fact that the "best" Romney is willing to do is propose vouchers for a future set of seniors - but to prevent a reform that would strengthen and perpetuate the program. Through "Romney", Brooks whines that "Congress wrote provisions in the health care law that have already gutted the power of the advisory board", but the Republicans in Congress could have prevented that from happening or could help fix that problem right now. Instead they demagogue about "death panels" and "bureaucrats deciding your care."

When it's private plans, the Republican complaint is that Obama's reforms were going to make you change your insurance plan, put bureaucrats between you and your doctor, make you change your doctor.... But when it's Medicare, the goal is to strip seniors of their present plan, Medicare, and subject them to the vagaries of market forces rather than guaranteeing a predefined set of services in the tradition of comprehensive health insurance. There's no attempt at consistency, but that's only a problem if columnists like Brooks aren't willing to post incoherent nonsense to spackle over the cracks and holes in the healthcare policies his preferred candidates want to impose upon the nation.

If the Democrats win, it will be that much harder for the Republicans to voucherize Medicare, but it is absurd to pretend that the only party that displays any serious interest in reform and cost containment will suddenly stop working on those reforms. Given Romney's effort to distance himself from his own health insurance reform plan, there's simply no credibility to Brooks' suggestion that he would "pursue any experiment, from any political direction". The only plan he's openly favored is voucherization, walking it back only when he realized the backlash that plan was about to create. Under Romney, we're not going to be looking at ideas from Japan, Europe or Canada, or even Massachusetts. If he gets his way, we'll be looking at vouchers.

The charitable interpretation is that Brooks is trying to put the best spin - the least offensive mendacity, inconsistency and incoherence - on what Romney might say about Medicare, and that Brooks is not himself attempting to hide the facts of Romney's plan. But given Brooks' history, there's little reason to view his column as anything other than an attempt to burnish Romney.

Update: Dean Baker addresses a number of the factual errors and faulty assumptions Brooks includes in his "speech".

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