What Could Medicare Do To Drive Change

Posted by Don McDaniel on Aug 29, 2017 11:00:00 AM

There’s been a lot of discussion about reforming our health care system over many generations and presidential administrations, and most recently in the run-up to and immediate period after the election of Donald Trump. Republicans promised for 7 years to repeal and replace Obamacare only to (so-far) fail miserably at walking-the-walk.  I believe the political milieu, is at best a red herring, innocuous and really noise.  The fact is the value movement that we’re talking about in health care is really a market movement.  The proverbial train has left the station and market principals are already starting to disrupt the industry.

I was participating in a recent panel about innovation in healthcare, and the moderator asked the panelists, “what one thing would you do to change the status quo, to drive innovation ?”. My colleagues, all experts, but all practioners in the “old health economy” shared all the conventional wisdom; all the responses were, at best, representative of incrementalism.  I had the luxury of answering last, and used the time to my benefit for once.  I suggested that completely privatizing Medicare would be my choice.  Privatizing or “Marketizing” Medicare would expose one of the world’s biggest monopolies (short of true single payer government plans) to market forces.  From a budgetary perspective, privatizing Medicare from its current defined-benefit approach to a defined budget, or defined-contribution model would allow CMS to more predictably budget for growth in the program, and leverage the market of many willing sellers of insurance and services. 
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Topics: Value-Based Healthcare, medicare, Healthcare Innovation

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