Yesterday, I was pleased to participate in a public event at the American Enterprise Institute, focusing on the content of three papers released by AEI this week (generously sponsored by the Robert Wood Johnson Foundation). The first paper, which I wrote, is entitled “The Role of Medicare Fee-for-Service in Inefficient Health Care Delivery.” I argue in it that Medicare fee-for-service is the most important reason that American health care is inefficient, fragmented, disorganized, and costly. It will not be possible to bring about real reform without significant changes in Medicare’s basic financial incentives.
The second paper, written by Robert Coulam of Simmons College and Roger Feldman and Bryan Dowd of the University of Minnesota, examines the benefits of moving toward a competitive bidding approach for the entirety of the Medicare benefit package. Private health plans would submit bids indicating the premium they would require to provide Medicare’s statutory benefits, and those bids would be used, along with the costs of providing Medicare FFS in a region, to determine a fixed government contribution. The authors estimate that this approach would reduce Medicare’s costs by $339 billion over a decade.
The third paper, written by Joe Antos, makes the case for reforming Medicare with a premium support model, including competitive bidding. The paper cites existing models, including the Medicare prescription drug benefit, and other evidence to make the case that harnessing the power of consumer choice and marketplace competition is the only reliable way to discipline costs without harming quality.
The AEI event, which was moderated by Bob Helms, can be viewed in its entirety here. Paul Ginsburg of the Center for Studying Health System Change provided helpful comments.
Last month, I was very pleased to be invited to appear on Brian Lehrer’s radio show (public radio in NYC) to talk about an alternative vision for health care reform, one that is very different from the vision embodied in Obamacare. The invitation to appear on the show was prompted by the piece Bob Moffit and I wrote for National Affairs magazine, entitled “How to Replace Obamacare.” The discussion focused on the reforms that are necessary to build a functioning marketplace for health care in the United States.
In addition, the American Enterprise Institute (where I am a visiting fellow) recently asked me to record a series of brief video remarks outlining the major features of a replacement plan for Obamacare. Those remarks closely follow the points I made with Bob in our National Affairs piece. AEI has posted the recorded videos on its YouTube channel.
Yesterday, I had the privilege of participating in the inaugural event for the American Enterprise Institute’s new “Beyond ‘Repeal and Replace’” initiative, the purpose of which is to explore policies that could take the place of the recently passed health care law. During the panel discussion, moderated by AEI’s Tom Miller, I provided an overview of the paper I coauthored with Tom called “The Defined Contribution Route to Health Care Choice and Competition.” The defined contribution approach to reform would convert today’s open-ended federal subsidies into fixed levels of support, and thus convert millions of passive insurance enrollees into cost-conscious consumers. A short summary of our paper can be accessed here, and the full paper is available here.
The panel also included Scott Harrington of the University of Pennsylvania, who presented an overview of his paper on “Regime Change for Health Insurance Regulation: Rethinking Rate Review, Medical Loss Ratios, and Informed Competition,” and Steve Parente of the University of Minnesota, who discussed his paper entitled “Harnessing Health Information in Real Time: Back to The Future for a More Practical and Effective Infrastructure.”
Video of the entire AEI event is available below: