Great Tests In Health Policy History?Not!
Washington lawmakers are floating the idea of a
"demonstration program" that would give seniors more choices by
allowing private health plans to compete directly for their
business in a few selected cities and one region of the
But Congress has a history of conducting similar "tests" doomed to
fail because they were "undermined by political opposition and
economic self-interest," Heritage Foundation health-policy expert
Robert Moffit writes in a Nov. 13 online memo. The "tests"
The Medical Savings Account Demonstration
Project of 1996. This four-year project was supposed to
test the market for developing and selling medical savings
accounts. But dozens of legal and regulatory conditions soon
hobbled the market. "Not surprisingly, it was less than
successful," Moffit writes.
Medicare+Choice Experiment of
1997. Although it was accompanied by free-market rhetoric
of choice and competition, the Medicare+Choice program turned out
to be a textbook example of political intrusion and
over-regulation. The needless interference discouraged health plan
participation, depriving seniors of promised choice.
The Medicare "Competitive Pricing"
Demonstrations of the 1990s. Lawmakers chose four cities
for a "competitive pricing" test: Baltimore, Denver, Phoenix and
Kansas City, Mo. The most significant of these tests were in
Phoenix and Kansas City, where Congress set up Competitive Pricing
Advisory Committees for them. Made up of private-sector experts,
the committee was to supervise the creation of a system of
competitive payments for the Medicare+Choice plans. In the end,
health-care providers who didn't want to compete undermined the
tests and lawmakers blocked them.
Anyone want to take bets on how this next "test"
for competition in Medicare will be rigged to fail?
Read more of Moffit's paper at heritage.org.
For more information or to receive an e-mail version of
"Medicare Maladies," contact firstname.lastname@example.org
or call Heritage Media Services at (202) 675-1761.