Unless Medicare is reformed immediately, the American people will be faced with "staggering new taxes or draconian benefit cuts."
"Medicare is both costly and inefficient because of two fundamental design problems," writes Stuart Butler of the Heritage Foundation. "The first design problem is that Medicare operates on the principles of central planning. This means that the entire system is micro managed from Washington. Intricate fee schedules are developed for specific benefits, and thousands of pages of regulations are drawn up to detail exactly what services should be provided, as well as how and to whom they should be provided."
Central planning assumes, despite all evidence to the contrary, that a government bureaucrat is some-how more likely to know what is good for a particular patient than the patient and his doctor themselves. It also ignores the financial repercussions of shifting the cost of health care from the patient to a third party. "The second, related design problem," says Butler, "is that Medicare is a defined benefits program. This means that Congress, through statute, promises specific medical services without regard to cost, leaving the taxpayer exposed to whatever proportion of the resulting costs of these services Congress feels it cannot impose on enrollees." As a result, "an enormous provider-driven lobbying industry has developed in Washington to press for more benefits and to block the elimination of any benefits, no matter how out of date or costly they may be."
Butler urges Congress to "replace this central planning/defined benefits system with one shaped by choice, competition, and . . . need." Citing the Federal Employees Health Benefits Program as a good alter-native model, he recommends "allowing the elderly to choose from a range of competing plans, including traditional fee-for-service plans." Butler argues that "competition and the desire to satisfy the customer would replace bureaucracy and the perceived need to satisfy Washington, and would drive the system toward efficiency."
Stuart Butler warns that Medicare is "nearing financial collapse and needs urgent action. Efforts to restructure the program during the 104th Congress were thwarted by presidential veto," he recalls. "Now is the time for the White House to show leadership by working with Congress to introduce long-term structural changes, not accounting tricks. The longer structural reform is delayed," concludes Butler, "the more painful it will be."
Before we can reform Medicare, we must first make an honest assessment of its defects. Unfortunately, many of our public servants seem intellectually incapable of doing this. They've built their careers on a Big Lie -- the Big Lie of Big Government, providing for all our needs. They were warned of the perils of paternalism, but their presumption knew no bounds, and now their pet projects litter the landscape. What's wrong with Medicare is the same thing that's wrong with Social Security, and with all the other government programs that have sprung up in the last sixty years. It's time we admitted that the New Deal was a misdeal, the Great Society a great mistake. There'll be no genuine reform until we do.
