Last week, I had the pleasure of participating in a panel discussion on the latest Medicare Trustees’ report at AEI. Rick Foster, the Chief Actuary for Medicare, presented the latest estimates, which were followed by comments from Mark McClellan, Joth Rother of AARP, myself, and former House Ways and Means Chairman Bill Thomas. I focused my remarks on the reasons efforts to “engineer” more efficiency from Washington are a real long-shot. It is no accident that Medicare looks and operates as it does today. Politicians can’t pick between two hospitals or physician groups in their districts. They want the government insurance plan to pay all licensed providers the same fees, no matter the quality differences. Hence, Medicare’s open network. And, of course, politicians want to insulate retirees as much as possible from any cost consequences of service use. Put it all together and it’s a recipe for price controls and unconstrained volume—in other words, for what we see in Medicare today.

A video feed of the event is available here, audio here, and the slides I used for my presentation are here (in PDF format).