Her plan proposes ‘global budgets’ to control costs. That will inevitably lead to rationing of needed services.
Until now, Medicare for All proposals have been pleasantly vague. They plausibly allowed voters to imagine that more medical services would be covered, without premiums, out-of-pocket costs or the inconvenience of networks or claims reviews by insurers.
But now Sen. Elizabeth Warren has sought to specify exactly how her overhaul of American health care would be paid for. The most remarkable feature of her proposal is the extent to which she proposes to rein in health-care spending simply by restricting the resources available to providers.
Ms. Warren proposes to “use available policy tools, which include global budgets, population-based budgets, and automatic rate reductions,” to limit the annual rate of health-care spending growth to match the growth of the economy as a whole.
“Global budgets” refer to an arrangement under which each hospital is allocated a fixed amount of funds for the whole year. If the number of patients with heart attacks or opioid overdoses increases, hospitals wouldn’t get any extra revenues to treat them. This would encourage hospitals to withhold treatment from patients who need scheduled operations to save money for emergencies.
That’s why single-payer health-care systems are notorious for long waiting lists. In Canada, patients must wait an average of four weeks for an ultrasound, 11 weeks for an magnetic-resonance imaging scan, 26 weeks for brain surgery and 39 weeks for joint surgery. Long waits impose pain, uncertainty and anguish on patients and their loved ones—and often means diseases get worse.
Over the past generation, France, the Netherlands and Sweden have moved away from global budgets, reasoning that medical providers are more productive when paid for the work they do. None are seeking to return to this method of cost control.
Two years ago, Democrats successfully fought off Republican attempts to make modest reductions in the rate of growth of federal Medicaid allocations to states. Ms. Warren’s proposal would not only cap funding for Medicaid and Medicare, but impose tight limits on the access to medical care that individuals are able to purchase with private insurance or their own money.
Increasing access to medical care has regularly proven popular in American politics. A proposal to slash funding for hospitals across the country could lead the Democrats to electoral disaster.
This piece originally appeared in The Wall Street Journal (paywall)
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Chris Pope is a senior fellow at the Manhattan Institute and author of a forthcoming report, Medicare For All in International Context: Lessons from Abroad for Comprehensive Health-Care Reform. Follow him on Twitter here.
This piece originally appeared in The Wall Street Journal