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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (16672)	11/19/2003 6:23:46 AM
From: Doc Bones	Respond to of 793817

Medicare Drug Plan is an Experiment Well Worth Making [WSJ] POLITICAL CAPITAL By ALAN MURRAY WASHINGTON -- Count on it: The prescription-drug deal reached over the weekend won't undermine Medicare, despite Democratic leaders' protests to the contrary. How can I be so certain? It isn't because I have scoured the language of the deal more carefully than Sen. Tom Daschle, or because I understand the complexities of American health care better than Sen. Ted Kennedy. It is because I have faith in the iron law of American politics: Seniors will get theirs. Think about it. This deal provides for an "experiment" in competition that won't begin until 2010. Critics worry the experiment may go awry. Private health plans, they fear, will "cherry pick" the healthiest seniors, leaving the sick and frail to languish in a traditional Medicare program with ever spiraling costs and ever higher premiums. That won't happen if the payments to private plans are properly adjusted for health risk. But if it does happen, does anyone think for a moment that Congress will sit back and say "sorry"? Or that President Jeb Bush or President Hillary Clinton, eager for a second term, will turn a blind eye? Not a chance. As long as seniors continue to vote with twice the regularity of young people, they have little to fear. Medicare will survive, and thrive. The real issue here isn't whether senior citizens will get adequate health-care coverage. They will. The issue is what happens to everything else the government does -- and, ultimately, to the American economy and society -- if Medicare continues on its current path. As the baby boomers retire, Medicare and Social Security will either squeeze out most of the other functions of the federal government, or the size of the federal government will balloon, from roughly 20% of the economy today to 30% a few decades from now. That is why making another stab at introducing competition into Medicare is so desperately important. The magic of markets is that when they work properly, they can find solutions that leave everyone better off. Quality can improve, prices can be kept in check, and the benefits can be spread more broadly. This isn't just about bailing out HMOs. It is about finding ways to make the health-care delivery system more efficient. To be sure, the recent history of efforts to introduce competition into health care isn't encouraging. A dozen years ago, candidate Bill Clinton argued that "managed competition," among health-maintenance organizations could improve the delivery of health-care services. But by the mid-1990s, many Americans had concluded HMOs were competing to keep down price, not to improve quality. Efforts to introduce competition in the Medicare system have been even less successful. The percentage of Medicare recipients enrolled in HMOs under the "Medicare Plus Choice" plan has fallen from 16% in 1999, to 11% last year. The number of plans participating in the system has dropped by more than half, and it would have dropped even further this year without the personal entreaties of Medicare administrator Thomas Scully. But these failures have taught important lessons about the need for good risk adjustment, the importance of good quality measurements, the necessity of making it easy for seniors to switch between plans and the problems arising from excessive regulation. Under the compromise reached this weekend, the government will have six years to absorb the lessons of these failures, and craft an experiment that avoids repeating them. One man who understands these dynamics is William Novelli, the chief executive of AARP. He climbed way out on a limb, and broke his group's traditional ties to the Democratic Party, to support this weekend's agreement. And after extensive debate Sunday, he persuaded his board to climb out on that limb with him. The group plans to spend $7 million over the next three days running advertisements on television and in newspapers arguing that the compromise is a critical step for both senior citizens and the nation. Mr. Novelli founded and ran an advertising firm before he entered the world of politics. "The private sector understands test markets," he says. "They do it every day of the week." Perhaps. Sen. John Breaux, the Louisiana moderate who backed the deal, said many of his fellow Democrats are paying more attention to politics than policy. They "do not want to give a political victory to George Bush with a Rose Garden ceremony," he says. But Democrats are wrong to oppose this experiment in health-care competition, just as they are wrong to oppose experiments with vouchers in education. If market forces can improve the delivery of each, it is the constituents that Democrats profess to represent who will benefit the most. Write to Alan Murray at alan.murray@wsj.com Updated November 18, 2003 online.wsj.com