Paul Ryan Explains Choice & Competition To HHS Secretary

Paul Ryan spoke directly to Health and Human Services Secretary (HHS) Kathleen Sebelius today about Medicare reform. At the crux of his thesis: health care is missing patient choice, competition, and price signals. Meanwhile, a board of 15 unelected people are given the ability to underpay providers, which will cause providers to drop Medicare. This unelected group is called IPAB, the Independent Payment Advisory Board.

As we’ve covered at Swift Economics here, herehere, here, here, and here, health care is truly in need of a revolution.

As Ryan explains, there has to be a way for providers to compete for a beneficiary’s business, and thus provide the patient better service over time:

Giving seniors the choice, like we did with Part D, is a better way because what it does at the end of the day is it shows providers that, if you want to succeed, if you want to have business, you gotta outcompete other providers for that beneficiary’s business.  So the nucleus of the program we’re trying to talk about is the patient, the beneficiary, not the IPAB.  And there’s the big difference at the end of the day.  We really believe, because of evidence, and reality, giving seniors more choices, or providers—doctors, providers, insurance companies, to compete against each other for that beneficiary’s business—that works.


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  • Charlie Quimby

    I’d be very interested in how Rep. Ryan interacts with health care system, and how that would be changed for him under his plan.

    My guess: Not much and zero.

    His vision of providers competing for “business” relates to a world Ayn Rand hasn’t invented yet.

    • Under the Congressional health care plan I’m sure any changes to the health care system will have no effect on Rep. Ryan’s sterling care.

      However, the idea that price signals, patient choice, and competition shouldn’t apply in health care when they are vital to any other market is pretty unfounded. A third party pays 88 cents on the dollar for our health care expenditures; a market distortion caused by wage controls instituted during WWII. Companies began looking for ways to pay their people more and circumvent the law. They stumbled upon medical benefits. Then the IRS ruled that these benefits would not be taxable, and off we went. It is strange that in almost every other market technological advance and innovation results in lower costs. But not health care. That’s because people don’t pay enough for their care.

      A lesson in unintended consequences.

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