The Paul Ryan debates

I haven't followed the numerical specifics of his plan (see Krugman, McArdle, and Ezra), which will never be voted on, so at this point I'm more interested in the general problem motivating the reform.  We all know that health care spending has to be restrained in some manner.  There are (at least) two approaches:

1. Have the federal government take a more active role in shutting down or limiting some reimbursements, based on efficacy studies ("death panels").

2. Turn some or all of Medicare into a fixed voucher program and let individuals choose which set of restrictions they will accept from private suppliers ("grandma bangs on HMO door").

As I understand Ryan's approach, he is putting a great deal of emphasis on #2, whereas most Democrats favor #1.

Which mix of #1 and #2 is best is one question; which mix people will accept politically is another.  A third issue is which mix is time consistent and a fourth is which prevents "rationed" people from simply popping up somewhere else in the public health system.  I would start with those distinctions and see which policy direction people need to be nudged in, relative to the path we are on now.  That probably means greater acceptance of both #1 and #2, to some extent.

I believe that #2 works fine for a lot of health care, especially the less controversial and less emotional areas of care, such as laser eye surgery.  Neither #1 nor #2 work especially well, or are especially popular, for end of life issues.

Whatever problems the Ryan plan may have (should we dismiss all ideas from people with overly optimistic forecasts?), I take his contribution to be a nudge in the direction of #2, given the current political equilibrium.  Overall I see this as a healthy nudge, even if you think that relying fully or even mainly on #2 is undesirable, infeasible, and time inconsistent.


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