Cognitive Dissonance Alert! Government Does Better Than Private Sector in Containing Health Care Costs!

The chart below contradicts something that many conservatives and libertarians believe:  That government can't do anything right. 

By Andrew Fieldhouse, The Eonomic Policy Institute Blog

"Following the Supreme Court’s ruling in favor of the Patient Protection and Affordable Care Act (ACA) and its lynchpin—the individual mandate—my colleague Josh Bivens noted all the ways conservatives have tried to keep health care from being delivered efficiently, notably by blocking government from using its monopsony power and economies of scale wisely. This, of course, is difficult to square with conservatives’ professed concerns about public debt, because rapidly rising health costs are, by far, the single biggest impediment to stabilizing long-run public debt (if the economy operates at full potential over this long-run). Political opportunism aside, reasonable policy should unequivocally aim to lower health care cost-growth; so here’s some evidence worth revisiting on the comparative efficiency of public versus private provision of health care."

"...the Congressional Budget Office has estimated that Medicare is 11 percent cheaper than an actuarially equivalent private insurance plan, an efficiency premium that will similarly compound with time: Fee-for-service Medicare is projected to be at least 29 percent cheaper than an equivalent private insurance plan by 2030 (relative to CBO’s alternative fiscal scenario for the long-term budget outlook).

The ACA is projected to expand coverage to some 30-33 million additional non-elderly Americans by the end of the decade, a critical step for risk-pooling, increasing cost-saving preventive care, and decreasing uncompensated care costs passed along to providers and policy holders. It also included ambitious reforms to control costs (particularly the Independent Payment Advisory Board, or IPAB), but too many provisions leveraging the public sector’s ability to directly contain costs—notably offering a public insurance option (e.g., Medicare buy-in) and negotiating Medicare Part D prescription drug prices with pharmaceutical companies (as is done for Medicaid)—were lobbied out of the bill.

Even though stronger cost-containments could have been included, the Supreme Court’s ruling in favor of the ACA is a major victory for long-run fiscal sustainability, as health reform is projected to reduce annual long-run budget deficits by roughly half-a-percentage point of GDP.

The ACA is a momentous step toward more efficient and comprehensive health care coverage in the United States, but reform will undoubtedly remain a work in progress—particularly as the various cost-containment provisions in the ACA are evaluated and successes merit replication. Our experience over the last 40 years should guide policymakers as they inevitably go back to the drawing board on health care reform; and the evidence over this time overwhelmingly suggests that public provision of health care is more effective at containing excess cost growth and more efficient than private insurance provision."


If You Oppose Single Payer Insurance, Take Your Parents Off Medicare and Pay for Their Medical Bills Yourself

 

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WASHINGTON, July 1 (Reuters) - Voter support for President Barack Obama's healthcare overhaul has increased following the U.S. Supreme Court's ruling upholding it, a lthough majorities still oppose it, a Reuters/Ipsos poll released on Sunday showed.

Among all registered voters, support for the law rose to 48 percent in the online survey conducted after Thursday's ruling, up from 43 percent before the court decision. Opposition slipped to 52 percent from 57 percent.

The survey showed increased backing from Republicans and, crucially, the political independents whose support will be essential to winning the Nov. 6 presidential election.

Thirty-eight percent of independents supported the healthcare overhaul. That was up from 27 percent from a Reuters/Ipsos poll taken days before the justices' ruling. Opposition among independents was 62 percent, versus 73 percent earlier.

"This is a win for Obama. This is his bill. There's not really any doubt in people's minds, that it belongs to him," said Julia Clark, vice president at Ipsos Public Affairs. "It's his baby. It's literally been labeled 'Obamacare' ... which maybe it works in his favor now that there's a little bit of a victory dance going on." -HuffPost-

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The hysterics coming from some conservative blogs do nothing to help us understand that yes, in some cases, the government actually can be beneficial.  Health care cost containment is among those areas where government does better than the private sector.