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The Cowardly Senator Wyden

By       Message Dean Baker       (Page 1 of 1 pages)     Permalink

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Years ago members of the elite showed their courage by leading troops into battle. They risked their own lives for the greater good. (Never mind that the wars being fought often did not serve anything resembling the "greater good.")

Things are different today. In the land of the 1 percent, the way you show your courage is by demonstrating your willingness to beat up on the elderly. That gets you bucket loads of campaign contributions, high praise from the Washington Post in both its news and opinion pages, and could even get you named Person of the Year by Time.

Last week, Senator Ron Wyden of Oregon stood up to do the big kick. He decided to join ranks with Representative Paul Ryan on a proposal to replace Medicare with a voucher-type system. The claim was that with increased competition, we will be able to lower costs.

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Using competition to lower costs; that seems like such a great idea! If only someone had thought of this sooner.

Of course this has been thought of sooner and tried again and again. Remember Medicare Plus Choice in the 90s? How about Medicare Advantage, the more recent incarnation of the program which still exists? In both cases, analyses from the Congressional Budget Office and others have consistently found that they raise costs. And we have been experimenting with competition between insurers in the private sector for decades, and it has not succeeded in holding down costs.

But in Washington, just because something has failed repeatedly is no reason not to do it again; especially if it protects the interests of the 1 percent.

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The basic story on health care is not hard even if we can devise plans that make it very complicated. We spend more than twice as much per person as the average for other wealthy countries. This gap is projected to grow even larger in the decades ahead. If these projections prove accurate then health-care costs will devastate the economy. The huge projected budget deficits are one part of this devastation because we pay for more than half of our health care through public sector programs such as Medicare and Medicaid.

It is indisputable that we need to get off this health care cost growth path. There are two ways to do it. One is to give people less care, the other is to reduce the amount of money that we pay providers.

If we look to other countries, what makes costs in the United States so much higher is not that we get more care than people in Canada, Germany, the United Kingdom and elsewhere. The difference is that we pay much more for our care. We pay more to the pharmaceutical industry for our drugs, more to the medical supply industry for medical equipment, more to doctors and especially highly paid specialists and we pay way more to our insurance industry.

A genuinely courageous Senator from Oregon might stand up and suggest ways to get our payments more in line with the rest of the world. But some of the main beneficiaries of these over-payments are in the 1 percent. They are not interested in a solution to our health-care cost problem that will reduce their income.

Therefore if Senator Wyden had gotten up and proposed to reform our system in a way that is likely to bring down costs he would have been either ridiculed by the media or ignored. Proposing a Canadian-style universal Medicare system is not the way to get on the front page of the Washington Post or to fill campaign coffers, a fact that Mr. Wyden understands very well.

If Senator Wyden was really interested in holding down costs instead of denying care he didn't even have to make the big leap to a whole new system. He could have followed the suggestions that Columbia University economist Jagdish Bhagwati and I put forward for opening up the U.S. health care system to international competition.

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Wyden likes vouchers; why not give people a

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Medicare voucher
that would let them buy into the health-care systems of Canada or England and split the tens of thousands of dollars of projected savings with the government? Why not make it easier for people to get expensive medical procedures at world-class facilities in the developing world that charge a fraction of the price -- and let the patient share in the tens or hundreds of thousands of dollars in savings? Why not make it easier for qualified foreign physicians to practice in the United States, bringing down our payments to doctors and health care costs?

That is what someone who really cared about lowering our health-care costs would be proposing. But Senator Wyden doesn't have that sort of courage. Of course if he did, the Washington Post types would do their best to make sure that no one ever heard of the Senator from Oregon.

 

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Dr. Dean Baker is a macroeconomist and Co-Director of the Center for Economic and Policy Research in Washington, D.C. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. (more...)
 

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