The Politics of Medicare
Thursday, March 31, 2011 at 09:30AM An unusually insightful article at Politico on the current Medicare debate over Provenge illustrates the problems of a government-run health care “insurance” program, and why health care costs are rising so quickly.
Provenge is a treatment for prostate cancer that costs $93,000 and prolongs life by 4 months on average. The medicare agency (CMS) has to decide this week whether to pay for it.
The trouble is that CMS is not in a position to weigh the pros and cons and make this decision.
When individuals make decisions like this, they do so by considering the opportunity costs. For an individual with prostate cancer, the question would be: would I rather use this $93,000 to extend my life for 4 months, or would I use it in some other way (enjoy my remaining months, give it to my children, give it to charity, etc)? For a private insurance company, the question would be: if we covered this treatment, what would be the effect on premiums, on the desirability of our insurance, and on profits? In these cases, both the benefits and the costs accrue to the decision-making individual or entity, so that they could be considered together.
But in the case of this government decision, no one entity faces both benefits and costs. If CMS decides to cover this treatment, the benefits go to those with prostate cancer while the costs are distributed among all tax payers. If CMS doesn’t cover it, the benefits and costs are reversed. CMS’s decision won’t bring it more customers, nor drive people away, because people have no choice anyway.
Also, because this is a government decision, the decision-makers don’t face these benefits and costs, but instead face a whole other set of political costs and benefits. If CMS decides to cover Provenge, then the Obama administration loses its talking points about controlling health care costs. If Medicare does not cover it, then the Obama administration will be accused of rationing.
And this is the really bad news: since the Obama adminstration faces these political incentives, but not the costs and benefits of the actual treatment, this decision will likely be made on the basis of politics. It’s not difficult to predict the most likely outcome. In politics, concentrated benefits almost always win out over dispersed costs. Here is Dan Nather at Politico:
"In the political cost-benefit analysis, the amount of grief that CMS, and the Obama administration, could get from singling out one treatment isn’t likely to be worth the money to be saved by not covering the drug."
We’ll see what CMS decides soon, but either way, this illustrates how government insurance works. Decisions are made on the basis of politics, and the drive is to cover everything, leading to higher costs.
Reader Comments (11)
very well-written post!
An unusually insightful article at Politico on the current Medicare debate over Provenge illustrates the problems of a government-run health care “insurance” -lady Masterpiece watchesprogram, and why health care costs are rising so quickly.
Fantastic goods from you, man. Ive study your stuff ahead of and youre just as well amazing. I enjoy what youve got right here, adore what youre stating and the way you say it. You make it entertaining and you even now manage to help keep it wise. I cant wait to go through additional from you. That is really an incredible weblog.
-Dior china mobile phones
Great!This article is creative，there are a lot of new idea，it gives me inspiration.I think I will also inspired by you and think about more new ideas http://www.nhljerseyssell.com/
NHL Jersey made in China
<h1>ugg bailey button sale<h1>
<h1>ugg bailey button chestnut<h1>
<h1>ugg classic tall sale<h1>
<h1>ugg classic tall grey<h1>
<h1>ugg classic short sale<h1>
<h1>ugg classic short grey<h1>
<h1>ugg classic tall sale<h1>
<h1>ugg classic tall navy<h1>
<h1>ugg classic short sale<h1>
<h1>ugg classic short black<h1>
<h1>ugg bailey button bomber<h1>
<h1>ugg bailey button bomber<h1>
<h1>ugg classic cardy sale<h1>
<h1>ugg boots sale<h1>
<h1>ugg classic cardy sale<h1>
<h1>ugg classic cardy black<h1>
<h1>ugg bailey button triplet sale<h1>
<h1>uggs outlet<h1>
<h1>ugg bailey button triplet<h1>
<h1>ugg boots sale uk<h1>
<h1>ugg boots sale uk<h1>
<h1>louis vuitton outlet<h1>
<h1>the north face outlet<h1>
<h1>uggs for cheap<h1>
<h1>uggs on sale<h1>
<h1>ugg boots sale<h1>
<h1>uggs on sale<h1>
<h1>ugg boots outlet<h1>
<h1>ugg boots clearance<h1>
<h1>ugg boots sale<h1>
<h1>cheap ugg boots<h1>
<h1>ugg for cheap<h1>
<h1>ugg boots outlet<h1>
<h1>uggs outlet<h1>
<h1>uggs outlet<h1>
<h1>uggs for cheap<h1>
<h1>uggs for cheap<h1>
<h1>ugg boots sale<h1>
<h1>ugg boots sale uk<h1>
<h1>uggs on sale<h1>
<h1>ugg boots clearance<h1>
<h1>ugg boots clearance<h1>
<h1>ugg boots outlet<h1>
<h1>ugg boots sale<h1>
<h1>louis vuitton outlet<h1>
<h1>coach purse outlet<h1>
<h1>coach purses outlet<h1>
<h1>coach purse<h1>
<h1>coach purses<h1>
<h1>cheap coach purses<h1>
<h1>coach outlet store online<h1>
Unsere Philosophie:
verkauft UGGs Stiefel zu günstigen Preisen. Unser Ziel ist es, unsere Kunden mitden weltbesten UGG Artikel zu einem hervorragenden Wert liefern. Siemayalways finden ein luxuriöses ein, dass Ihre Augen fangen kann, bleibt die Tatsache, dass der Preis wettbewerbsfähig ist. Wir sind ein professionellesRabatt Uggs Online Store exprienced im Umgang in UGGs Stiefel. Unser RabattUggs Online Store sind Sie genau auf alle Arten von uggs Stiefel bezahlt undstellen Sie sicher, sie können unsere Kunden den hohen Anforderungen gerecht zu werden. Als unser UGG Artikel passen Sie Ihr Budget als auch Ihrem Geschmack, Join us.
Tag:
ugg boots sale
ugg boots
ugg boots kaufen billig
ugg boots deutschland
Believe it or not, buy the fake breitling watches market has become a modern fashion trends. replica tag heuer Formula 1 watches in a variety of models and designs. They offer a variety of options for buyers. At the same time, they also brought confusion to customers, poor quality on the market, because there are so many replica omega seamaster watches.
naturally like your website but you need to check the spelling on several of your posts. Many of them are rife with spelling problems and I find it very bothersome to tell the truth nevertheless I’ll surely come back again.swiss replica watches
Multivitamins are the best way to increase stamina level in our body.Multivitamins are best to for the human skin and best for fight against virus.
Boot camp
It is more effective to give approval within the traders in accurate connection, soon after, immediately, in turn, selection and purchase goods.
Unser Ziel ist es, unsere Kunden mitden weltbesten UGG Artikel zu einem hervorragenden Wert liefern. Siemayalways finden ein luxuriöses ein, dass Ihre Augen fangen kann, bleibt die Tatsache, dass der Preis wettbewerbsfähig ist. Wir sind ein - forfait mobile