Paul Krugman discusses government versus private health care but unfortunately chooses the wrong types of health care to compare. He uses the V.A. as an example of a good government program as compared to the private HMO’s in the Medicare Advantage plan. As someone who has seen the effects of these programs first hand, as opposed to by measures such as customer satisfaction or articles written as part of political debate, I would say that both programs have serious problems.Krugman would have had a stronger argument if he had compared the government Medicare program to Medicare HMO’s.
Health care programs are judged based on criteria which a large system with a good computer system, like the VA, can game much more easily than smaller groups. Krugman is likely right that improvements have been made, but I see far too many examples of poor care provided to use the VA as an example of quality care provided by the government. Others also see this, and using the VA as an example like this undermines the arguments of those who use it as a favorable example. The Medicare program, in which the government is single payer but private physicians provide the care would be a far better model than the VA.
Krugman is more accurate in his assessment of Medicare HMO’s:
Meanwhile, the Bush administration is pursuing a failed idea from the 1990’s: channeling Medicare recipients into private H.M.O.’s. The theory was that H.M.O.’s, by bringing private-sector efficiency and the magic of the marketplace to health care, would be able to do what the V.A. has achieved in practice: provide better care at lower cost.
But the theory was wrong. Years of experience show that H.M.O.’s actually have substantially higher costs per patient than conventional Medicare, because they add an expensive extra layer of bureaucracy and also spend heavily on marketing. H.M.O.’s for Medicare recipients prospered for a while by selectively covering relatively healthy older Americans, but when the government began paying less for those likely to have low medical costs, many H.M.O.’s dropped out of the Medicare market.
In 2003, however, the Bush administration pushed through the Medicare Advantage program, which offers heavy subsidies to H.M.O.’s. According to the independent Medicare Payment Advisory Commission, Medicare Advantage plans cost the government 11 percent more per person than traditional Medicare. Oh, and mortality rates in these plans are 40 percent higher than those of elderly veterans covered by the V.A. But thanks to the subsidy, membership in Medicare Advantage plans is surging.
On one side, then, the administration and its allies in Congress oppose expanding the best health care system in America, even though that expansion would save taxpayer dollars, because they’re afraid that allowing a successful government program to expand would undermine their antigovernment crusade and displease powerful business lobbies.
On the other side, ideology and fealty to interest groups make them willing to waste billions subsidizing private H.M.O.’s.
Remember that contrast the next time you hear some conservative going on about excessive spending on entitlements, and declaring that we need to cut back on Medicare and Medicaid benefits.
