Obama’s RationCare is not so caring.
Maybe they’re not quite going to be “death panels,” but there’s no denying that Obama’s “federal option” single-payer health care system will ration health care, and the older one gets, the less likely the government will be to approve one’s health care expenses. Obama has replied “so what?” because technically the private market rations health care right now. But that’s missing the point. Markets ration everything — from your food to home to gasoline — based on price, not on a government bureaucracy that just gives yea or nea decisions.
Yes, the U.S. “rations” by ability to pay (though in the end no one is denied actual care). This is true of every good or service in a free economy and a world of finite resources but infinite wants. Yet no one would say we “ration” houses or gasoline because those goods are allocated by prices. The problem is that governments ration through brute force—either explicitly restricting the use of medicine or lowering payments below market rates. Both methods lead to waiting lines, lower quality, or less innovation—and usually all three.
A lot of talk has centered on what Sarah Palin inelegantly called “death panels.” Of course rationing to save the federal fisc will be subtler than a bureaucratic decision to “pull the plug on grandma,” as Mr. Obama put it. But Mrs. Palin has also exposed a basic truth. A substantial portion of Medicare spending is incurred in the last six months of life.
From the point of view of politicians with a limited budget, is it worth spending a lot on, say, a patient with late-stage cancer where the odds of remission are long? Or should they spend to improve quality, not length, of life? Or pay for a hip or knee replacement for seniors, when palliative care might cost less? And who decides?
In Britain, the NHS decides, and under its QALYs metric it generally won’t pay more than $22,000 for treatments to extend a life six months. “Money for the NHS isn’t limitless,” as one NHS official recently put it in response to American criticism, “so we need to make sure the money we have goes on things which offer more than the care we’ll have to forgo to pay for them.”
Before he got defensive, Mr. Obama was open about this political calculation. He often invokes the experience of his own grandmother, musing whether it was wise for her to receive a hip replacement after a terminal cancer diagnosis. In an April interview with the New York Times, he wondered whether this represented a “sustainable model” for society. He seems to believe these medical issues are all justifiably political questions that government or some panel of philosopher kings can and should decide. No wonder so many seniors rebel at such judgments that they know they could do little to influence, much less change.
Mr. Obama has also said many times that the growth of Medicare spending must be restrained, and his budget director Peter Orszag has made it nearly his life’s cause. We agree, but then why does Mr. Obama want to add to our fiscal burdens a new Medicare-like program for everyone under 65 too? Medicare already rations care, refusing, for example, to pay for virtual colonoscopies and has payment policies or directives to curtail the use of certain cancer drugs, diagnostic tools, asthma medications and many others. Seniors routinely buy supplemental insurance (Medigap) to patch Medicare’s holes—and Medicare is still growing by 11% this year.
The political and fiscal pressure to further ration Medicare would increase exponentially if government is paying for most everyone’s care. The better way to slow the growth of Medicare is to give seniors more control over their own health care and the incentives to spend wisely, by offering competitive insurance plans. But this would mean less control for government, not more.