Bipartisan Health Care Cost Control By Diktat: Insurers or Providers or Both
Posted Sep 13 2012 12:07am
According to the Kaiser Foundation, health care costs are continuing to go up . Assuming Uncle Sam is doing everything he can to "increase efficiency" and "reduce waste," what are the options that can quickly control costs?
It's simple: leverage the insurance companies or the providers or both.
What is less appreciated is that the Medicare premium support plan being championed by Republican Paul Ryan is a variation of this same strategy. Thanks to a voucher that is indexed to the rate of inflation, insurance companies would be essentially told what they can charge for the bulk of their insurance. If the health insurers need to charge more, they'll have to wrestle that out of the beneficiary.
Of course, Medicare's fee schedule functionally dictates what providers can charge for their services at the federal level, but up until now, Congress has been unwilling to leverage that. While a softer and gentler approach of "upside risk arrangements" and "global fees" are being developed, the paranoid DMCB suspects that they'll be ultimately calculated to cover a predetermined charge that is supplemented with a small profit margin.
While Democrats and Republicans have been supportive of a limited number of options ultimately reflecting their ideology, the DMCB predicts that, over time and with a worsening fisc, both parties will converge on using all of the options described above. That's because they'll have no choice.
Heluva way to achieve bipartisanship, but there you go.