The Blog

Unintended Consequences

Bending the health care cost curve would lead to longer waiting times, fewer jobs, and worse Medicare.

11:00 PM, Nov 18, 2009 • By STANLEY GOLDFARB
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"Medicare Advantage plans are not 'overpaid' if the value of the benefits that they are providing is factored into the calculation. Under traditional Medicare, seniors need to pay an additional pre mium and buy supplemental coverage to secure the missing benefits they need or the extra benefits that they want that are not included in the traditional program. With Medicare Advantage, beneficiaries are getting access to an integrated package of bene fits, just like their fellow citizens who purchase group or individual insurance in the private mar kets, and can dispense with the hassle of two pay ments for separate insurance products. Meanwhile, the reliance of lower-income seniors on Medicare Advantage reduces their reliance on Medicaid, a welfare program, and thus produces reductions in Medicaid spending."

So another unintended consequence will be a gutting of an effective program and a cost shifting of the benefits of the program onto seniors and onto state budgets for Medicaid.

Finally, recent research from the Rand Corporation has suggested that the only effective way to control health care costs will be a "bundled payment" system. This means a fixed amount of money will be available for clinical care and when the money is spent, the care ceases or is deferred--or the provider of care is likely to lose money. This is the managed care scenario so disliked by Americans in the mid-1990's and the inevitable precursor of some form of explicit rationing of care. This may be necessary, but real political courage would consist of a frank acknowledgement of this reality. I guess we will not hear that from our political leaders. More likely, they will ask our forgiveness for this "unintended" consequence rather than our permission.

Stanley Goldfarb MD is associate dean of clinical education at the University of Pennsylvania School of Medicine and a nephrologist.