About the the only satisfaction I get out of Rep. Paul Ryan’s horrible plan to voucherize Medicare is the truly ironic effect it has on the top supporters of the Affordable Care Act. For much of 2009-2010 they kept saying how vouchers to buy private health insurance on an exchange was a great idea for a 64 year old (or younger person — i.e., anyone not eligible for Medicare– when trying to sell Obamacare. Now to attack Ryan’s plan the exact same people are correctly pointing out what a horrible idea it is to offer vouchers to buy private health insurance on an exchange for those 65 years or older.
From Peter Orszag in Bloomberg:
The vast bulk of health-care costs arise from an extremely small share of patients, whose insurance will inevitably bear a substantial share of their expenses.
That’s why competition in health care doesn’t work as well as in other sectors, and it’s also why the key to keeping costs to a minimum is to encourage providers to offer better, less costly care in complex cases.
Unfortunately, proponents of moving Medicare to a private “consumer-driven” system, including Republican vice presidential hopeful Paul Ryan, seem to instead believe in a health-care competition tooth fairy — that if we just increase the patient’s share of costs and bolster competition among insurance companies, the expense will come down. As Karl Rove recently argued, “Competition will lower costs by using market forces to spur innovation and improvement.”
Calling this notion the tooth fairy is valid, but where was this Orszag back in 2010 when he was using the exact same “health-care competition tooth fairy” nonsense to sell the ACA as Obama’s Director of the Office of Management and Budget?
This statement about how competition doesn’t work well in health insurance applies equally as well to the ACA exchanges as it does to Ryan’s proposed Medicare exchange. If Orszag believed competition among private insurance companies doesn’t work in health insurance, he should have said something when he was helping to design Obama entire health care plan centered around competition only by private insurance companies. Instead Orszag worked to undermine calls for a public option saying only private insurance competition was sufficient.
The one good thing about Ryan’s Medicare plan is it has gotten the so called “policy wonks” behind Obamacare to admit the basic policy of expecting private insurance exchanges to result in competitive prices, which lies at the heart of the ACA, is stupid. I guess two years late is better than never.




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This argument of competition in The Holy Marketplace always lowering costs is pure Bullshit. The insurers aren’t competitors at all. They have the country and states divvied up into territories where they have agreed not to poach each others clients. It’s price-fixing at its worst. They also hide profits by doing business as a non-profit corporation. BC/BS, Allina, United Healthcare, and all the others aren’t available nationwide or equally in every state. And it’s not due entirely to regulatory restrictions either.
Is this the same guy representing Citibank these days? Oh yes! Competition among state based health insurance corporations some with tax exempt status, considered charities, while enjoying geographic monopolies in commerce?
Nice “BS” call on Peter Orszag, Mr.Walker!
“And it’s not due entirely to regulatory restrictions either.”
Got that right. It is planned this way, bought via tax code! Corporate Sodomy under law bought by “monied interests,” as Jefferson would say! We call them campaign contributions!…
when the right in media and all their minions from coast to coast talk about the free market they never have the intellectual integrity to distinguish between true market competition from many many small players and “competition” in a market from a small handfull of large players. Amongst numerous small players your competition is your enemy and your clients are your friends. When a tiny group of large companies divide up or compete for profits then their competition is actually their friend as group think leads to price fixing etc and the client that fights against this lack of choice is the enemy to be subjugated.
Where was Orzag during the ACA debate? Collaborating secretly behind closed doors with BigIns, BigHosp, BigMedDevice … I’m sure Orzag get$ a hefty “bonu$” for how well he performs his role in the ongoing Kabuki Show.
T.R. Reid in his book HEALTH CARE IN AMERICA (correct title?) cited a demand by Japanese insurers to reduce the number of the cost of MRIs in Japan. The industry chose to reduce the cost by redesigning the machine so that the cost fell by something like 60-75%. Is our technology sector unable to do that or simply unwilling? This kind of cost reduction in many areas could be the end result of public and private pressure properly applied in the U.S.
“…ground to bone meal!” Jefferson.
Capitalism is fraud.
Unwilling is the answer. Profits trump logic and reason. You know maybe if Detroit and Oil adapted instead of protecting business models that fucked them and fucked US, American might be in a better place? This is all called “Protect the Slaveholders,” 2012 style!
When you are dying of cancer you can totally wait for your chemo to go on sale.
American Capitalism has morphed into a social welfare system for the corporate fascists to dump risk on the governed. Then blame the governed for the “plot / plight” orchestrated at the nation’s expense?
You know how that works Ludwig!
No it is not fraud Ludwig. That’s a blanket statement which is so general as to be complete and utter idiotic bullshit.
By your idiotic blanket assertion a woman selling flour or vegetables in a market stall for a profit (capitalism) is fraud.
Either contribute to the debate or shut up.
Sending his resume to Wall St for his next job.
Agreed. Remember the documentary, Who Killed the Electric Car? GM had a viable electric car back in the ’90s (and possibly developed even before then). They only leased it (I believe), and even though there was *demand* for it, GM killed it.
I’m given to understand (unsure; haven’t researched it), that GM’s Volt is not nearly as good.
You be the judge. If the “Gods” of Industry don’t want something developed, despite great market demand, then it won’t happen. Same goes with trying to lower prices. Why do that?? It’ll cut into the CEO’s grift. Can’t have that happen!
Citibank….. Right?
Yes. Orzag was good at multi-tasking…
Detroit and Oil in a reciprocal “69″ position, while the republic was “raped” for generations…..
I wonder what kind of motor the Martian Rover “Curiosity,” has? Duh!
Once again we have a conversation that confuses health care with health insurance. Very few of us actually make informed buying decisions of actual health care. We go where our insurer permits and with the exception of our PCP co-pay, have no clue of the actual “cost” of the services we are consuming BEFORE we make the buying decision.
I doubt there is anything other than health care that the average middle class consumer “purchases” without knowing the price up front.
Without the ability to compare prices, there can be no competition.
Health insurers don’t really care about the actual cost of healthcare. They will just raise their rates to cover it.
I agree but then I seem to recall one Adam Smith saying that (from what little I read of him). Capitalists always look for an edge, you know what do scorpions do? And when things dont go right, they all look for the bailout or help in some way, ususally political. It amazes me that people continually praise the profit, “free” market system. It is so much bullshit. Profit may be ok but we need to strictly control it or they will make slaves of us all (ie put us in poverty)in pursuit of more profit. No morphing necessary, they are all scorpions.
“American Capitalism” blasted out it’s false ideology as it was dying. Apologists now desperately forgive desperate (and cynical) capitalists when their lies were long transparent.
The socialization of risk is a consequence of the manipulation of expectations. Since the capitalist virtual reality would eventually fail, the risk had to be dumped. And since this harvest was anticipated, the capitalists engaged in a headlong boom/rush/bubble which forced the socialization of debt/costs.
Capitalism in any form is corrupt and was formed in corruption. The worst part of it is the nihilism it induces in it’s subjects.
Democrats always sound progressive when they’re running for office, or after they’ve left office.
“the key to keeping costs to a minimum is to encourage providers to offer better, less costly care in complex cases.”
OK, I am at a loss on this one. Encourage providers how?? Penalties, sanctions what? The hard part here is that providers are obligated to treat up to and exceeding local “standard of care.” Violate that amorphous standard with bad results and you will get sued and lose. Nobody, myself included, are interested in that.
No confusion here. “Insurers,” are middlemen. Just depends on the state and tax status of health insurance corporation doing business in that state. The intent is to limit competition and protect monopolies and profits at the expense of care, patient, consumer, taxpayer, governed and republic.
No, dear comprador, a woman selling vegetables in a market for the sole goal of profit is an idiot.
They are brokers who prefer to elevate their fees.
The guy is nothing but a shill for the Oligarchy. First, the insurance industry loves ACA- it props up a corporate system of rent extraction that provides no real value. Secondly, this asshat was arguing for the privatization of the Post Office weeks ago at Bloomberg http://www.bloomberg.com/news/2012-07-24/best-fix-for-postal-service-is-to-take-it-private.html. He is a prime example of the meritocracy at work. He has no defining principles or beliefs except what will enrich himself. Does this ass know how much WELFARE Citigroup receives every year??
A comprador.
Exactly. I’m bored with their bullshit. They talk the talk during the campaign. Get elected. Then get instant amnesia and move to the right.
I wouldn’t care if satan were the repub candidate, obomber and the dems aint getting my vote.
If I understand Ryan’s updated proposal correctly, unlike the ACA it has a public option. Ryan’s coupons would be honored for partial buy-in to traditional Medicare as well as private insurance.
It is selective fellatio, corporate style. Like selective amnesia for little favors secured, which the public is suppose to have forgotten about?
Obama talked about a public option too. I learned not to believe anything Obama says, and I certainly wouldn’t believe anything Ryan says, either.
I don’t trust either party regarding public options, or saving medicare. They both have to be voted out.
I’m so sick of hypocritical, opportunistic “leftists” like Peter Orszag.
Well, that might be ONE of the reasons competition in health care doesn’t work, but that’s hardly the sum total of the exhaustive list. Main reason is that buying health care is fundamentally different from buying a couch for your living room. When you buy a couch, you research the choices and options and prices in a leisurely, unhurried manner. When you buy a couch, you’re able to coordinate available prices to what you need, want or desire.
The fact that neither condition applies to health care, you need help NOW and you have absolutely no control over how much you’ll have to pay to fix the problem, means ordinary capitalist bidding and accepting, which works fine for couches, is not a meaningfully relevant model for health care.
Well said…
Excellent. This needs to be repeated.