Friday, September 18, 2009

The Seducitons of Bureaucracy

Denis Cortese is on C-Span here at Pizza Shack attempting to make an argument for Obama care but really making the argument for greater privatization if anything.

He outlines how the Mayo Clinic saved a lot of money and increased the quality of life with some older patients with chronic conditions by switching to a wellness, nurse based outpatient model of preventive care rather than an in hospital treatment model.  then he comes to the payoff--this better and cheaper outcome was not compensated for by medicare.  In fact they did not make a dime.

he goes on to highlight a number of other programs that have achieved the same thing. The interesting thing is that examples he gives are private providers.  He thinks this is an argument for taking what the best providers and insurance companies do and imposing it through medicare. But that assumes that all of this can be captured in a rule book and put in to practice by a bureaucracy that faces no, and will under Obama care face even less, competition.  Wouldn't most natural inference from his story be to say that we should have lots of different insurance providers competing on the basis of cost and quality and let the government provide its assistance to consumers in the form of vouchers?  In any case, how can a story about the perverse incentives created by a government program, shown to be perverse by contrasting those outcomes with those of a government system, be an argument for a government system?

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