General principles for evaluating Medicare reforms

You’ll be hearing lots about the Paul Ryan entitlement reform proposals, but here are a few more general points to keep in mind:

1. As health care develops, it becomes impossible for Medicare (or Medicaid) to cover every treatment.

2. One reform option has government experts rule which treatments are eligible for coverage, with varying degrees of Congressional input.

3. Another option is to let individuals choose in advance which treatments they will be covered for, and which not.

4. #3 can but need not be bundled with voucher and privatization ideas.  Without privatization, the government offers people different Medicare packages and they choose one over the others.  Government may also recommend a Medicare benefits package for an individual, without requiring that it be chosen.

5. Most plausible policy reforms involve some mix of expert restrictions (#2 )and individual choices (#3) and the real question is to figure out the right mix of the two approaches. When evaluating #2, do keep in mind the potential input of Congress, if only as a background threat.

6. Does individual choice (#3) make more sense for nursing homes and dental care (preferences really matter?), but maybe expert judgment (#2) makes more sense for cancer treatments (expertise really matters?)?  I am not endorsing that comparison, it is simply an example to illustrate the issue at hand.

7. If #5 isn’t being addressed, you’re probably just getting polemics.  Obligatory citation of David Hume, commit it to the flames, etc.


Comments for this post are closed