The Real Medicare Divide

The Real Medicare Divide: My former boss Jacob Weisberg wants you to know he was so not endorsing the Ryan plan–he doesn’t even like it–when he wrote his recent analysis, the one entitled “Good Plan!” OK. I’m with him. But here’s what Weisberg said about Ryan’s Medicare proposal:

Ryan’s alternative to Medicare hardly seems as terrible as Paul Krugman makes out. Seniors would enter the health care world the rest of us live in, with co-payments, deductibles and managed care. Eventually, cost control would require some tough decisions about end-of-life care and the rationing of high-tech treatments that have limited efficacy. But starting with a value of $15,000 per year, per senior—the amount government now spends on Medicare—Ryan’s vouchers should provide excellent coverage. His change would amount to a minor amendment to the social contract, not a fundamental revision of it.

Effectively constraining the growth of Medicare could make it possible for Democrats to do a lot else that’s important to them in the future. … Growing at more than 7 percent a year, Medicare is projected to eventually consume nearly all federal tax revenues. It is crowding out everything else that Washington does or might want to do. Conversely, cutting Medicare’s growth rate to near the overall rate of the economy would do more than anything else to enable the kind of activist government liberals support—investment in kids, education, jobs, and infrastructure. … [Emphasis added]

It’s not completely clear to me whether the highlighted sentence–about rationing–is a description a) of Ryan’s particular plan or b) of any approach to Medicare that Weisberg thinks would meet the nation’s fiscal challenge. Logically, it’s the former but it’s hard not to suspect Weisberg believes the latter too. That’s in part because there’s a prominent American politician Weisberg has championed who seems to agree that some form of rationing of Medicare is coming. His name is Barack Obama.  Famously, in a 2009 interview with David Leonhardt, Obama discussed his grandmother’s hip replacement:

[THE PRESIDENT:] Now, I actually think that the tougher issue around medical care — it’s a related one — is what you do around things like end-of-life care —

Yes, where it’s $20,000 for an extra week of life.

THE PRESIDENT: Exactly. And I just recently went through this. I mean, I’ve told this story, maybe not publicly, but when my grandmother got very ill during the campaign, she got cancer; it was determined to be terminal. And about two or three weeks after her diagnosis she fell, broke her hip. It was determined that she might have had a mild stroke, which is what had precipitated the fall.

So now she’s in the hospital, and the doctor says, Look, you’ve got about — maybe you have three months, maybe you have six months, maybe you have nine months to live. Because of the weakness of your heart, if you have an operation on your hip there are certain risks that — you know, your heart can’t take it. On the other hand, if you just sit there with your hip like this, you’re just going to waste away and your quality of life will be terrible.

And she elected to get the hip replacement and was fine for about two weeks after the hip replacement, and then suddenly just — you know, things fell apart.

I don’t know how much that hip replacement cost. I would have paid out of pocket for that hip replacement just because she’s my grandmother. Whether, sort of in the aggregate, society making those decisions to give my grandmother, or everybody else’s aging grandparents or parents, a hip replacement when they’re terminally ill is a sustainable model, is a very difficult question. If somebody told me that my grandmother couldn’t have a hip replacement and she had to lie there in misery in the waning days of her life — that would be pretty upsetting.

And it’s going to be hard for people who don’t have the option of paying for it.

THE PRESIDENT: So that’s where I think you just get into some very difficult moral issues. But that’s also a huge driver of cost, right?

I mean, the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here.

So how do you — how do we deal with it?

THE PRESIDENT: Well, I think that there is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place. It is very difficult to imagine the country making those decisions just through the normal political channels. And that’s part of why you have to have some independent group that can give you guidance. It’s not determinative, but I think has to be able to give you some guidance. And that’s part of what I suspect you’ll see emerging out of the various health care conversations that are taking place on the Hill right now.

Nothing Obama’s said since contradicts the reasonable assumption that he was telling Leonhardt what he actually believes has to happen in the not-so-long run. The “independent group” Obama talked about is now at least partially empowered by his landmark health care law. In Ezra Klein’s description its guidance doesn’t seem all that un-“determinative.”

That’s why I’m convinced the major fault line in the health care debate in the coming decades won’t be between those who do and don’t want to diminish the  government’s role–by, say, replacing the open-ended benefits Medicare recipients now get with a Ryan-style limited subsidy for purchase of health insurance. Sure that’s one debate, and it’s happening now. But the bigger fault line will be the line that is just emerging, between those who want Americans to keep getting whatever health care will make them better–which is more or less Medicare’s current, costly posture–and those who accept some system, whether public or private, that would deny them some treatments because of their expense: The Treaters vs. the Rationers.**

You probably know the Rationer talking points by heart now. Most are contained in Weisberg’s piece:

 a) If we continue a system in which Medicare pays for every treatment modern science can dream up for everyone, Medicare costs will “eventually consume nearly all federal tax revenues.”

 b) There are other better things for government, and particularly Democrats, to spend money on–“investment in kids, education, jobs, and infrastructure.”

c) We need some rational, fair system for deciding when we won’t pay for expensive treatments that have limited payoffs–“$20,000 for an extra week of life,” as Leonhardt says–even if they are effective enough for Medicare to cover under the current rules.

The corresponding Treater points are far less respectable and therefore less well known. They would be:

 a) Yes, Medicare and Medicaid are currently scheduled to consume almost 20% of GDP by 2080. That’s still 20%, not 90%!  Paying for it is not a fiscal impossibility. And there are plenty of ways short of rationing to reduce that share before 2080–like making the rich pay more of their own health bills (“means-testing”), adding co-payments and deductibles to discourage overuse, etc. We could also transfer money from other expensive  programs (i.e., goodbye, Social Security for the affluent).  And if the total still threatens to consume too big a share of revenues, we can raise revenues.

b) We know that paying for $20,000 treatments that extend life for a week will reliably extend life for a week, maybe longer in some lucky cases. They also express a fundamental human principle (in favor of living) and a fundamental American principle (the rich are no better than the poor, they’re just richer. The young are no better than the old, they’re just younger). Spending on fancy treatments also translates into greater expertise and better technology, eventually resulting in longer lifespan gains. More MRIs and cheaper MRIs, etc.. Meanwhile the mushy programs Dems like Weisberg would spend billions on instead–especially “kids” and “education,” have track records that fail to inspire confidence, to say the least. Let granny die to pour more money down big-city public school ratholes? That would be one way to put the choice, anyway.

c) Systemwide consistency is the hobgoblin of self-serving Washingtonian we-need-a-policyism. (“We need a national X policy, so let’s create the X agency to decide it.”) Sometimes it’s better–politically and morally–to have decentralized decisions, made by doctors and patients on all sorts of varied grounds. Even if it looks irrational, it will respect both life and individual autonomy (and the equality thereof).

Right now, Team Rationing looks very powerful. Both Ryan and Obama are on the same side, after all, and it’s the rationing side. (Maybe one reason Obama leaves liberals like Josh Marshall wondering why he doesn’t say he “won’t let Republicans abolish Medicare” is that Obama too wants to abolish Medicare, at least in its open-ended, pay-for-everything form.) The surest way for a writer to instantly seem intelligent is to declare “Rationing will be a part of health care reform eventually.”  People who doubt this are unscientific sentimentalists like those who agitated on behalf of Terri Schiavo, and they’ll lose like the Schiavo-ites lost. Everyone gets to die a cost-effective “good death.” That’s the 21st Century promise.

But I would put my money on the Treaters. There are more of us than you think, even some prominent Obama-ites, I’m told–in fact, you’d think Dems would dominate the Treater faction, since we are less scared of raising the needed taxes to pay for all those extra weeks. And what did Obama’s controversial Medicare Administrator Donald Berwick say when he took office? That controlling costs would not require “withholding any care that helps.” 

Few people believe this is what Berwick actually thinks, of course–I suppose it depends on what the meaning of “helps” is. That he felt he had to say it, though, shows that the Treaters have at least one group on their side: voters. Josh Marshall is right. If Obama said, “I won’t let the GOP abolish Medicare, denying treatments to Americans just because they don’t have enough money,” he’d win.  

When Obama doesn’t say this in his Ryan response later this week, Democrats should start worrying. He will have put them on the wrong side of the Rationer/Treater divide.


**–I assume there may be some treatments even today that are just so expensive doctors don’t think of prescribing them. I adopt Michael Kinsley’s rough-and-ready (and egalitarian) definition of rationing: “If the patient were the president, would he get it? If he’d get it and you wouldn’t, it’s rationing.”