Rep. Ryan wants to Privatize Medicare and I assume get the government out of health care for Seniors on Social Security as a cost savings measure, to reduce the national debt.
There is no doubt that the growth of the entitlement programs is a threat to the financial future of the government and the nation, but as God is in the details, it matters greatly how this is done and that most people would listen to a good and fair solution.
The argument is that Ryan is an expert on this issue, but I have my doubts on this and on the political background that leads to it and on the economics behind it.
The goal of the idea seems to be to reduce the cost of the outlays made to support Medicare, which is about $650 B a year, at the present time. I have serious doubt that exposing people on a fixed income to the economic forces at play in the general health care market and in the insurance industry genrally would make them anything more than victims of business fraud. We might instead look at the other factors leading to burgoning costs for health care, and insurance to cover them, rather than dumping the problem on those least able to fight back against them. The ideas of Rep. Ryan sound like the most cynical of Republican politics in which risk is increased on the poorest people to the benefit of the wealthiest and most powerful.
We might, first, look at the cost of health care generally, and ways to lower that as a first cut of Medicare costs. The U.S. spends almost twice as much on health care per capita as the next most expensive price per capita by nation. We need to ask why that is and can the Medicare policy be used to affect that. I am suspicious of Ryan's political motives because much of the anger over Obama's Health Care Bill was from people who might have to rethink what they ask from the health care system, who are insured, and are used to the priorities in the current system. It sounds like the usual conservative reaction. "I got mine, screw you." which comes from the selfish response of having enough resources to play the current system while more and more people get priced out of it.
There is also the question of how much fraud there is in Medicare. The Social Security Administration does not have much anti-fruad enforcement resources, yet they were able to find some extreme cases quickly in 2010 after being asked to look. This was low hanging fruit, blaitent abuse, in the open, easy to find. I have no way of knowing of how much fraud there really is, but if you look at bills from health care providers over the years, the line item costs are routinely much inflated for materials and services over what they would be as OTC items and services elsewhere. Also there is the whole emphesis in American health care on acute care vs. preventative care. The incentives in the private system are clearly not in the interest of cost savings and creates opportunities for abuse, as drug prices reveal. I wonder if we can trust a Republican plan, whose political priorities are to increase the profitability of business activities, especially of special interests who support the party, to find fair cost savings.
Finally, there is the whole issue of Privatization, which has been a Republican panecea since Ronald Regan. Its idea is that private business can deliver services more efficiently than beaucratic government programs. This sounds good until you see the basic conflict of interests that pervade private business dealings with customers and the self-preservation urges of organizations that become cost centers vs. the service they are supposed to provide consumers. This is predicated on the myth, which Free Market Repulicans love to tout, that consumers control the market. In fact it is investers and the entities they put funds into that control markets, and consumers get a say only sometimes and only after deals have been made. They can reject such decisions sometimes, but often are relatively powerless against such choices made by a few powerful players. The hold entrapaneurs and businessmen have over consumers is either monopoly or convenience and only secondarily the free choice of consumers.
The argument can be made in the reverse that government beauraucrats are no more responsive and as self-preservationist, and that would be correct, but the argument about Privatization is that it solves this problem, it doesn't. At the very least there is more transparancy in government than in private business, which explains why people get more angry about government. If they could really find out the deals made behind closed doors under the protection against competative rivels, they would become just as angry. It just reveals that governments and business have the same flaws in human nature about self interest and resistance to change. It is just as easy for one as the other to forget its pledge to serve its customers and to pad its coffers at their expense.
There is one other effect privatization has over services, it is an accounting one. If you think that accounting isn't political then ask how either absorbing the cost of a service under a larger bottom line or making it have its own line item as a cost center changes its standing. The difference is dramatic. The news, especially local news, is full of the fallout of this effect, because the organizations that have to make their bottom line hang out in public tell their tale of woe to the local media when their revenues vanish. Organizations with a bottom line not only can't hide their losses they also have to empire build to attract over-acheiving management and to sell their service. Like other businesses they get over-extended when the economy contracts and rather than going bankrupt, which they may only delay, they pass their costs onto their consumers. If they serve a captive or disadvantaged group, such as in public transportation systems, they increase fares first.
Rep. Ryan's scheme might ultimately be designed to help friends he has in New Haven Conn., arguably the inurance capital of the world, but doesn't ask, "What is fundementally wrong with Insurance, these days?" The answer to that is that more and more people are not buying insurance, because individual rates are much too high, and employers are not insuring their employees as much, and with the reporting on risk groups getting better, and about to get much better with electronic medical records reporting, the insurance are cherry picking the risk making many more people uninsured. So Ryan wants this system to arbritrate medical care for the elderly, poor and disabled? This is either the most cynical idea around, or the Congressman is just ignorant of the facts and is spouting a political formula.