While there is agreement among economists and health care experts that overall the US has highly inflationary health care expenses over the long term - certainly compared to other relatively wealthy countries with high-quality medical care and much better health outcomes - Uwe E. Reinhardt
@ New York Times Economix shows, once again, that the locus of this "out of control" spending isn't Medicare:
It’s the season of holiday cocktail parties, demanding intelligent
chit-chat over Chardonnay. In such data-free environments it is always
safe to say, “Medicare spending is out of control!” Wise heads will nod,
because it is a credo with wide currency.
After all, as I explained in my previous post,
traditional Medicare, which still attracts about 75 percent of all
Medicare beneficiaries, affords its enrollees free choice of providers
and therapy. In the jargon of health-policy wonks, it is “unmanaged.”
Thus, it would not be surprising if unmanaged Medicare spending were,
indeed, out of control.
But some caution is in order. A really
wise guy in the crowd, one familiar with relevant data, might challenge
you with: “Oh, really? In what sense is Medicare spending out of
control?”
That query might have been prompted by the following data.
Kaiser Family Foundation
These data, most of which have been published
by the Office of the Actuary, Centers of Medicare and Medicaid
Services, of the Department of Health and Human Services (see Table 16),
show that in most periods Medicare spending per Medicare beneficiary
has risen more slowly than per-capita spending under private health
insurance.
The exceptions are the period 1993-97, when private
managed-care plans appeared to be able to hold down their outlays on
health care better than did Medicare, and 2002-7, because there was a
jump in spending as Medicare began, in 2006, to cover prescription drugs under the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
So
anyone claiming that “Medicare spending is out of control” can fairly
be asked to explain on what data that assertion is based. The responses
might be interesting.
Two objections might be raised to my interpretation of the data.
Kaiser Family Foundation
