Tuesday, June 9, 2009

The Medicare Food Fight is Underway

In yesterday's post I argued that we should create - and hold to - a budget for our heath system. Today's news shows how difficult that will be.

Members of Congress are mulling over what to do about the enormous disparities in spending that have been documented so well by the Dartmouth group. Medicare spends 45% more per person in New York than in Hawaii, and twice as much in Miami compared to San Francisco! The question for legislators is - what do the findings mean, and what should we do?

The low road of interpretation is already crowded. Legislators from states that spend less are complaining that Medicare has "shortchanged" them. Legislators from high spending states predictably challenge the data and claim that we don't know what it means.

But we've known for more than a decade what the data mean. More capacity means more utilization. More utilization engenders the view - in doctors and the public - that more is better. The flow of money to high spending areas creates an economic interest in continuing the pattern.

I hope we see more truth in the debate. The country would be better off if legislators from New York, Florida and Massachusetts said "these expenditures create jobs and we don't want to yank them out of the economy when we're trying to pull ourselves out of a recession" or "part of the higher expenditure supports medical education, which is a public good." These are real issues and deserve attention.

Unfortunately it's more effective politically to attack the messenger from Dartmouth, to claim that the higher expenditures are "medically necessary," and to invoke the spectre of "rationing by government bureaucrats."

By good luck, Max Baucus, chair of the Senate Finance Committee, and Charles Grassley, the ranking Republican on the Committee, are from lower spending states (Montana and Iowa). Let's hope that they hold firm to the idea that lower spending is compatible with equal or better care, and that President Obama continues in the role of educator-in-chief.

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