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so long as the same thing that happened in Massachusetts does not happen for the country as a whole. Notice again, that Cutler and the current health plan neither say nor do a single thing about the most important drivers of cost – guaranteed issue, community rating, bans on inter-state trading, the medical practitioners cartel, the use of premium medicine, the prevalence of third-party payments …

I wished he could have laid out for us exactly how the proposed plan will save $600 billion over 10 years. That amounts to $60 billion per year – but does cost-saving mean “bending the curve” down? Furthermore, we spend $500 billion on Medicare alone, and over $2.25 trillion as a “nation” on health care each year. While 2.7 percent is nothing to scoff at, it is only 2.7 percent. And a 2.7 percent that many people believe has no chance at all of materializing.

2 Responses to “Yep, It Passes the Cost Test …”

  1. Harry says:

    The only way to bring costs down– OK one important way– is to abandon the whole prepaid medical system, which we call insurance, and abandon the idea that free anything is a right.

    I guess I should have figured this out when my mother was paying less than $150 for her medicare supplement insurance, but I was blinded by my mother-in-law who was complaining about her insurance premiums rising. It turns out that all of us have a good deal when we get medicare. What is a 40% increase over, say, $135? Fifty-four bucks a month, or $650 per year? The poorest of the poor can save that amount, and they are already supplied with tax credits, food stamps, and non-recourse loans. I have zero sympathy for the malingerers who care not about how inflation will savage whatever they have saved for their retirement.

    Wintercow, I hope you do not believe Obama will bend the cost curve down by 2.7%. That might happen if the government tells doctors to work for $50 dollars per hour and that the drug companies have to abandon their patents and sell all their pills for a penny apiece, and that the janitors who clean the wastebaskets in the hospital get the new minimum wage.

    It is not going to happen. Unless…

    I would suggest we need a growing economy, fueled by young people who might be immigrants and our own children. We are a big country, and have plenty of room. This fact tends to be lost by people who do not drive for an hour west from Washington or Manhattan.

    Meanwhile, it behoves us not to destroy our economy, which is rich with capital, including its intellectual capital, which includes our medical doctors, pharmaceutical scientists, and the rest of us who gained the ability to think.

    I bet it will be a negative $600 billion, not over ten years, but pretty soon per year. If it is enacted and sustained, would you bet me a buffalo nickel?

  2. Brian says:

    I think you should devote some future comments to what our government calls a “saving” or “cost reduction.” A rational person might think that cost reduction means that a cost is actually going down. To our government, a reduction is a lowering from a projected increase, so in fact if spending goes up by 2% instead of the original projection of 3%, they call this a reduction. I call it a smaller increase.

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