The Plank

Medicare Overspending

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The New York Times has a must-read piece today detailing how Medicare often pays medical-equipment manufacturers rates well in excess of market prices for devices like oxygen tanks. At first this sounds similar to the much-reported provision of Medicare Part D (the prescription-drug benefit) that prohibits Medicare from using its buying power to demand lower prices on drugs, but in fact it's substantially worse: while there's a decent case to be made against government purchases of health products and services at below-market rates, no one (except, of course, the companies who benefit from Medicare's largesse) thinks the government should pay above-market rates.

So why don't the feds just fix things? Because Republicans block all efforts to shut off the spigot of corporate welfare, right? Well, not exactly. The problem is not so much the Grand Old Party as it is Grumpy Old People:

When officials and politicians have tried to cut these costs, they have
often encountered a powerful foe: the companies that sell these
devices, who ask their elderly customers to serve, in effect, as unpaid
lobbyists, calling and writing to their representatives in Congress,
protesting at rallies, and even participating in political attacks
against individual lawmakers who take on the issue. ...

“These industries rely on a basic threat: If you mess with us, we can turn the seniors against you,” said former Senator Alan K. Simpson,
Republican of Wyoming, who tried cutting Medicare payments while he was
in Congress. “Angering seniors is the quickest route to political suicide.”

This ought to serve as something of a cautionary tale to advocates of single-payer health care (a.k.a. Medicare for all): if you think it's bad now, imagine how much of a mess it'd be if Congress had this much influence over everyone's care. This doesn't necessarily invalidate the arguments in favor of single-payer, but it does suggest that political culture matters: just because single-payer seems to work at least reasonably well in some countries doesn't mean it wouldn't turn into a costly interest-group free-for-all in America.

--Josh Patashnik

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