There is a consensus building in Washington, D.C.--which has been joined by many leading Democrats (including the President)--that Medicare outlays must be cut if our national deficit is to be reigned in. At the same time, we hear relatively little about cutting the costs of health care. One may ask, "What is the difference? You cut one; you curb the other." Not so fast. Most obviously, if you cut health care costs, you benefit almost everyone; if you cut Medicare, such a cut concerns only seniors and those who serve them.
Less obvious is that if you reduce what Medicare reimburses, but not the health care costs themselves, people are left with the following options: They can (a) pay for the items no longer covered by Medicare from their own pocket (which is okay for those with means, but will force those less well-off to give up some other vital expenditure, such as food, kid's schooling, etc.) or (b) forgo treatments their doctor deems medically necessary.
Those who argue that being expected to pay for some items themselves will turn people into wiser and more frugal shoppers ignore the mountain of evidence demonstrating that when it comes to most health care "shopping," people cannot tell what they truly need from that which they might do without--or sound medicine from quackery. A recent University of Michigan survey found that less than 50% of patients were able to answer basic questions about their condition, let alone its treatment. A 2004 Institute of Medicine report on health literacy in the U.S. found over 300 studies demonstrating that most people do not understand health information that is intended for them. A consumer who buys a can of beans every other week can learn which one he prefers and whether it is worth the cost. However, how many knee replacements, coronary bypass surgeries, or bone marrow transplants does a person buy before he can benefit from comparison shopping? Add the emotional issues raised by medical decisions, and you see that one cannot rely on patients' judgments to get an efficient market in health care.
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