By Roger Feldman
Should still Medicare pay for sufferer charges the best way vehicle insurers pay for car_repair money owed? Medicare's present approach to paying physicians units charges for greater than 8,000 separate tactics and prone, totaling over $60 billion each year. With Medicare's formulation underpaying for a few providers and overpaying for others, this complicated method is an inefficient use of assets that daunts using fundamental care in desire of dearer strong point providers. supplied with almost limitless scientific prone at low or free of charge, sufferers this present day have little incentive to decide on their care correctly. In find out how to repair Medicare: Let's Pay sufferers, no longer Physicians, well-being economist Roger Feldman argues radical shift in Medicare coverage isn't just attainable yet valuable. lower than Feldman's 'medical indemnity' thought, Medicare could pay each one sufferer a set amount of cash, booking better subsidies for sicker humans. sufferers, in flip, would choose their very own clinical providers from companies who might set their very own aggressive charges. A clinical indemnity approach may put off the distortion in sufferers' incentives wrought by way of traditional Medicare assurance. Given a hard and fast sum of money to spend on remedy, sufferers might have powerful incentives to buy the mix of prone, prone, and costs that the majority heavily meet their wishes.
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Extra resources for How to Fix Medicare: Let's Pay Patients, Not Physicians
I refer to these proposals as “global budgets” for all Medicare services in given geographic areas. The rationales behind these proposals have varied. In an early proposal, Peter Fox (1984) argued that global budgets are the only way to address the “blank-check mentality” associated with fee-for-service Medicare. More recently, John Wennberg and colleagues have observed that Medicare spending per capita in some regions of the United States is more than twice as high as in other regions, with no obvious improvements in compliance with the standards of medical practice recommended by evidence-based medicine.
Dowd et al. (2006–7) also discussed demand factors, such as illness burden and per-capita income, that influence Medicare spending in local markets. Efficient pricing requires that adjustments be made for these factors, as well as for differences in physicians’ practice costs across markets. A problem closely related to geographic adjustment is how to adjust the indemnity for changes in medical technology. 7 One possible response is for Medicare to observe the adjustments that private payers make to their physician fees.
Third, the plan could take advantage of clinical guidelines to specify when care is not warranted. Havighurst believed that “courts would generally respect contracts of the sort proposed” (308). I am much less sanguine about the enforceability of such contracts, not because of antipathy of the courts, but because of the public opprobrium that would be heaped on a health plan (including Medicare) that denied medical care after the fact, even if the patient had agreed a priori to such denial. In other words, Havighurst did not foresee the backlash against managed care that was looming on the horizon in the mid-1990s, centering on the fear that patients in managed-care plans would not receive the services they needed when they were sick.