If you keep hearing the “competition is the solution” meme, perhaps that's because competition is the solution. It has been the solution in every other industry.

The President and CEO of Kaiser had this to say about Medicare bankruptcy:

Yes of course an insolvent Medicare trust fund would be a serious problem – if it were ever to happen. But Medicare is a hugely popular program, highly valued by seniors and the general public, and if the past predicts the future, policymakers will take action so the program will be able to fully fund benefits for the 45 million people who rely on the program for their health insurance, and future generations. As many will remember, back in 1997, the Trustees predicted the Medicare Part A Trust Fund would be insolvent by 2001, but Congress took steps to make sure that did not occur.
In the short-term, Medicare’s fate appears to be tied to that of health reform. The Obama Administration has linked health reform and Medicare discussions in what some have called a “grand bargain” in which we invest in health system reforms now with the hope of achieving savings for Medicare and other payers over the long-term. As reported by Robert Pear today, the Senate Finance Committee is considering some promising approaches in its health reform deliberations, hoping to reduce unnecessary hospital readmissions and improve the management of care for relatively high-cost Medicare beneficiaries. Carefully crafted, such efforts could be a win-win from the perspective of patients and the program.
Whether or not Congress chooses to go down the path of reducing payments to providers, as it has done in the past, is not yet clear.  What is clear from our polling is that most Americans are not interested in changes that could increase their out-of-pocket costs. Our most recent poll shows that proposals – such as raising payroll taxes, raising the age of eligibility for Medicare or requiring all seniors to pay a larger share of costs — all received less than majority support, possibly because the public believes rising health care costs are taking a toll on seniors. Our own research shows that out-of-pocket spending on medical care is consuming a rising share of seniors’ incomes over time, even with Medicare. In the current economic climate, it seems hard to imagine a scenario that would ask the majority of seniors to pay more to buck up the Trust Fund.

What part *couldn't* be more efficient? We could do fewer needless treatments and tests. We could retire the paper-based data systems everyone relies on. We could stop giving nurses 6-figure starting salaries. We could kill fewer people as a result of medical errors. We could stop demanding patients fill out forms with unreliable versions of their medical histories. We could chuck that ubiquitous but low-value privacy disclosure paperwork all providers are required to administer. We could shortcut certain malpractice settlements and save a bunch of lawyers' fees. We could spend more on prevention and save in ER bills. As you pointed out, we could limit taxpayer-funded end-of-life heroics.

Those are just bits of waste I see in the current system; I'm sure for every one there are 100 others I'm unaware of, or potential improvements that no one has thought of yet. If we give companies and people the right incentives, we'll have a million brains looking for ways to improve, and they'll find a great many.

And note that one man's “waste” is another man's “value.” I don't flatter myself to imagine great throngs of people are eager to hear about my lumbago, so I personally assign a low value to medical privacy and consider privacy disclosures tremendously wasteful. Your mileage may vary. But sadly in the current regulation-heavy system we don't get a choice, because the government has made a single privacy/cost tradeoff for everyone. If we eased such regulations, providers would be better able to tailor their products to customers' preferences and offer you more of the things you personally value for less money. (That is, assuming you were really free to choose providers based on their relative costs and benefits.)

I'm not sure what you mean about getting more efficient at delivering health care. In what parts of the process could we be more efficient?

Of course it is, that's my whole point. No insurance-centric scheme has slain the rising-costs demon, yet slay it we must. So insurance-centric schemes are not the answer.

You're right that Medicare is not bankrupt today, but that's only because of the unique way the government keeps its books. Law requires the government to make up any Medicare shortfall out of general revenue, so Medicare in theory can't go bankrupt the way Aetna can (which would be fine with me, BTW). But the government doesn't have enough money to meet the projected expenses even for the group Medicare currently covers, so it will have to raise taxes and/or cut services at mind-blowing scale. From http://www.aei.org/outlook/24319:

The trustees indicate that we must find $32.1 trillion in general taxes, measured in today’s dollars, if Medicare is to pay all of its bills over the next seventy-five years. … Some $70.5 trillion is required to fully finance Medicare indefinitely.

There are obviously a million ways we could tax people more, for example more than doubling payroll taxes immediately would bring in the $200-something billion Medicare needs. But no one has much appetite for dramatically higher taxes, so politicians opt to ignore the gap, and the clock continues to tick.

In my mind it's not a question of whether or not health care is worth spending federal dollars on. Federal dollars or private dollars all ultimately come out of our pockets, so it's much the same thing. It's a question of how we can avoid being eaten alive by these rising costs.

The answer seems very clear to me: we need to get a lot more efficient about delivering health care (not just insurance, but the whole package). Honesty about costs is a necessary ingredient we're missing today; sweeping costs under the rug makes it impossible to talk sensibly about the end-of-life tradeoffs you raised, and you're right that they're a major part of the problem.

But wait. I'm not calling for mandatory single payer. ANYONE who thinks Blue Cross will get them better health care by paying the doctor more and adding a layer of “shareholder wealth building” to their tab, by all means, go for it.

And the blah blah blah about Medicare being a Ponzi scheme is just not compelling at all. The truth is, we have to pay for health care. Whether it's with a hundred private insurers, or just three (like in my state) or just one, we still need to pay the doctor and the hospital and pharmacy. We're just arguing about what the check says on it. You want it to say Blue Cross. I don't care what it says. I want the best for the cheapest. Period. I've been very detailed about exactly why I think a Medicare for all model is the best and cheapest. No one here has produced a single salient point in favor of the price-gouging bastards in the insurance industry, and believe me, as both an individual insured and as a small employer, I know them very very well.

Then please explain Medicare's failure to even contain those costs. It's not enough for Medicare to beat private insurance. If it is to provide a general solution, it must also be affordable and sustainable on its own terms.

“No one has identified a private insurer who can match ANY of the Medicare advantages I listed.”

Well, duh. It's illegal for private enterprise to collect premiums from “future beneficiaries” without amortizing those liabilities on its books. But if they could get away with it, they could offer today's customers some great bargains. Bernard Madoff was doing exactly that. Shame they put him away; if the government is going to expand Medicare it will need more skills like his.

Dr. J, is right about the tax incentives. As I've pointed out to those who balk helping someone else with their health care costs, I SUBSIDIZE THEM, as a person without employer paid health insurance. My taxes pay for the tax breaks for employer paid health insurance. I pay more as a small businessman to make their bill lower. And since small businesses can't afford the cost, and since small businesses are the biggest source of new jobs, we're really hurting our own recovery with this senseless policy. I also agree with Dr J that the real problem is rising costs, which need to be curtailed. But the shrieks of those like tsuh about government setting limits is a big problem, because like it or not, public payment or private, we will have to make some tough decisions about limits, especially on expensive end of life procedures.

PS, I note no one has identified a private insurer who can match ANY of the Medicare advantages I listed.

I didn't say lower prices couldn't be negotiated, I said that doing so doesn't really make providers more efficient. Medicare is a huge player in the health care market, but providers keep charging 5% more every year without making us 5% healthier. Medicare is failing even to contain costs, much less to drive them down.

As for the “highest risk patients,” you've got it backwards. Given that Medicare pays for treatments rather than cures, elderly patients aren't risks for providers, they're cash registers.

“I'm not sure what regulations are thought to keep insurers from reducing cost,”

Where would you like to start? How about the tax incentives that make sure employers–not you–are insurers' customers?

But it's a silly question, because it's not insurers who are raising the costs. They're just passing on providers' costs, exactly like Medicare does.

Also, President Obama and the Democrats are already proposing big cuts ot Medicare and Medicaid to help pay for the coverage of the additional 40 some million people they want to cover. This means my Aunt may be out of luck when it comes to that hip replacement she needs because the government has decided she is of less “worth” to society than a younger person is. Bottom line, in order to cover an additional 40 some million people government (while at the same time reducing costs) government will have to ration health care. That translates into some bureacrat deciding who gets what health care if any based on political favoritism and one's “worth” to the elite in power. You may want to turn over that type of absolute power over your life to government. However, most sane people would say no to handing over that type of power to a greedy and heartless government who will reduce costs by denying care to the elderly and poor.

President Obama is now calling on his supporters to come up with a lot of hard luck stories about their problems with the current health care system The problem is that government run health care may be even worse than the current system. Think about it, Medicare and Social Security are going broke and Medicaid is a big reason States like NY and CA are going broke. So why would anyone think that government won't make an even bigger mess out of health care and put the Nation into even deeper debt.

The bottom line is that the only way government can cover an additional 47 million people (while at the same time reducing health care costs) is to ration health care. This translates into the government making life and death decisions on who get what health care if any based on political favoritism and one's “worth” to the elite in power. Already the Democrats are giving the Unions a better deal on health care deductions than the average Joe which is a preview of things to come if President Obama gets his way and government takes over health care.

Think about it. Do you really want to give up the insurance you are happy with and give the government absolute power over your life and death health care decisions ? I think President Obama and the Democrats know the majority of people would be against giving over that kind of power to them and that is why they are trying to push health care through so fast before too many people catch on to what President Obama is up to.

Dr. J: it's extremely hard for big-gorilla buyers to drive efficiencies into their supply chains. They can dictate lower prices, but suppliers react by either shifting costs elsewhere or compromising quality.

Chris is right on this point. Medicare pays doctors 19% less than private insurers, yet 97% of doctors accept new Medicare patients. That is solid, numerical proof of concept. It IS possible for a big payer to negotiate lower prices and our “guvmint” has done better than any other source. Plus, they have succeeded with the highest risk patient population in the business, the elderly. I know I'll be told they shift costs to private payers, but no one has offered proof. As disproof, my Medicare-accepting doctor is not allowed to charge private insurers any more than my Medicare-denying doctor friend.

I do agree with Dr J that pharma hasn't felt the heat nearly enough. They lie constantly about how they need big profits to drive innovation, but the truths are: first, they need government to drive innovation, and second, they are no more innovative than their European rivals, who now dominate the pharma market (4 of the top 5). On the first point, look at taxol, one of our newest chemotherapy agents. Discovered by govenment grants to an academic researcher, the development was funded by NIH, yet Bristol Meyers Squibb got the patent and then wants top dollar from the very people, “we the people” who gave them the drug in the first place.

Then Dr. J veers off into the Friedmanite mantra “privatize, deregulate” saying if we just give insurers more slack (less regulation) they'll compete by lowering prices and becoming more efficient. I disagree. Take a look at the national flood insurance program. Insuring people in flood plains is just too risky for private insurance, so the government has to do it, and does it well. Same thing with Medicare. The expensive risk pool of over 65 Americans is too risky for private insurance, yet the government runs the program at MUCH lower cost than private insurance with the easier risk pool. Plus, private insurers take advantage of and use the work of millions of staff hours of federal work (like their diagnosis system) and still private insurers and their adherents pretend that they *almost* compete because the free market is so efficient.

GerSan, malpractice is actually a tiny part of health care cost, around 2%, and doctors who are crooked or incompetent deserve judgments against them. Malpractice *insurance* is costly, but that's the same insurance industry that is responsible for other out of control costs. “No one talks about it?” OK, let's burst that bubble. A Dartmouth College study destroyed the idea that insurers raised malpractice rates to cover lawsuit costs. In fact, they were covering losses due to their bad investments.

Researchers found that payments grew an average of 4 percent annually during the years covered by the study, or 52 percent overall since 1991, but only 1.6 percent a year since 2000. The increases are roughly equivalent to the overall rise in healthcare costs, said Amitabh Chandra, lead author and an assistant professor of economics at the New Hampshire college…

Meanwhile, malpractice insurance premiums for internists, general surgeons, and obstetricians have skyrocketed since 2000, jumping 20 to 25 percent in 2002 alone…

It has been proven repeatedly that “caps” and other “tort reforms” do not work. States that have enacted so-called “tort reform” have only seen their insurance rates continue to shoot up after passing severe liability limits. ” In all states with severe caps “insurers have continued to increase insurance rates.”

As to your points that a government run program will be worse than private, that's a scare tactic. Government already covers almost half of heath care in the US, so it's not a speculative exercise of how bad they could do. There is fully as much data on government paid health care as there is for privately paid health care. Medicare wins hands down. Not sure? Name me a single other insurance policy, outside of a government one, that has these features:

No eligibility requirements or physical
no exclusion of pre-existing conditions
no cancellation for excess use of services
no penalty for moving or changing jobs
no re-applying for coverage if moving or changing jobs
a stable, mature program known to both physicians and patients
no marketing cost
no sales cost
no commissions
no bloated executive salaries
no palatial executive suites
no corporate jets or limos

Rushing without thinking, and failing to address the costs and how to pay for them, is far more irresponsible, irrefutably, than any appeal to emotion or casting government as a “caretaker.”

Shrinking the already too small health care proposals will cost more in the end, not less. We need big changes to try to curb costs and increase availability.

Waiting until things get worse for health care is not the responsible thing to do.

And count the costs later, and find a way to pay for it later: This specifically is what is wrong with the current effort — this is inexcuseable (though apparently the many exploitable people don't care at all).

True, but such unpleasant facts are denied or constitute an excuse for vicious attacks by the usual suspects.

Note that there is currently an open threat by Obama and others to “pay for” [sic] this effort to some extent by reducing payments (that often are too low already) to providers. And what will happen when the scope of Medicare (or a surrogate, even merely a “public option” claimed to be unrelated to it) is expanded and payments are further lowered?

And what does it say for proponents if they're willing to, or want, it made illegal for providers to refuse Medicare? We already know how the most fervent would treat any future “private option” (in fact, the Conyers bill, for example, specifically prohibits private duplication of any services provided publically).

The current legislation is worse than worthless and should be killed (or greatly rewritten and shrunken) and if people in Washington (and their Pavlovian hypester crowd) waited until the economy improved and finances were put in better shape, it would be much better. Don't count on that being sought by the exploitable, though. And after all, some apparently want the Dems to proceed as soon and quickly as possible while they have so much more support than any feeble Republican opposition. Hence the lunacy.