Aug. 20--Mitt Romney has been repeating at almost every stop that President Obama plans to cut Medicare "by $700 billion." The Republican presidential nominee then reassures: "We want to make sure we preserve and protect Medicare." The one problem, as noted often the past week? Paul Ryan, Romney's running mate and the deep budget thinker for House Republicans, has proposed a similar sum of reductions in the health-care program for seniors.
Romney isn't alone in playing the political angles. Democrats long have engaged in scare tactics regarding Medicare. Worth stressing is that the president and Ryan actually have substantial proposals for addressing the challenges in Medicare. The Obama plan already has begun to take shape in the implementation of health-care reform.
That $700 billion reflects the obvious. Medicare spending must be curbed, or the program will put at risk other priorities as it consumes a greater share of federal dollars. What shouldn't be missed is that the increase in Medicare spending largely mirrors rising costs in overall health care.
If anything, Medicare has been something of an engine for slowing the increase in health costs, its innovations rippling through the system. That is what the president seeks to enhance.
Much of the savings would come via prods and other incentives to see the system operate differently -- in essence, placing the premium on quality instead of volume. Such is the thinking behind the Independent Payment Advisory Board, medical experts with the clout to press for best practices, in quality and cost. The approach covers provisions for reducing payments to hospitals with high readmission rates, and the elements involving the collection of better data and bundled payments, paying a set amount for treatment of a condition, as opposed to each procedure or test.
The president's plan carries an overall limit on Medicare spending, the rate of economic growth plus 0.5 percentage points. Tellingly, Ryan eventually adopted the same limit.
Where Ryan -- and Romney, essentially -- diverge is in their method for restraining Medicare costs. They would add the option of a voucher component, seniors receiving money to buy health coverage in the private market. That likely would include an exchange for shopping. Ryan and Romney hold that the resulting competition among insurers would advance quality and cost-savings.
Initially, the Ryan plan received criticism, and rightly so, for skimping on the size of the vouchers, asking seniors to pick up a substantially larger share of their health costs. He since has made upward adjustments. What he and Romney have yet to address is recent experience. Medicare has run an experiment with private, managed-care alternatives. They have cost roughly 20 percent more than traditional Medicare, reinforcing doubts about market principles translating well to the unique health-care market.
Those doubts explain why, in part, the Obama White House took the course that it did. Now that choice faces voters -- if they can get a clear look past the distortion and hyperbole.
(c)2012 the Akron Beacon Journal (Akron, Ohio)
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