Dangerous Remedy

The other problem with extending Medicare

Virginia Postrel from the October 1999 issue

(Page 2 of 2)

In short, Medicare not only is a monopoly. It acts like one--with high-handed disregard for the patients it serves. "It is doubtful that private-sector managed care plans, faced with even minimal free-market competition, could have imposed most of [the Medicare oversight agency] HCFA's highly aggressive cost-containment measures without hearing a resounding public and political outcry," writes Dr. Sandra Mahkorn in a report for the Heritage Foundation. "Medicare's large and growing captive membership provides effective immunity from the consumer pressures regularly experienced by private-sector plans."

Instead of finding ways to check this monopoly power (or to get patients to take more financial responsibility for their own insurance), the Clinton administration is trying to expand it--to warp drug markets as it has warped physician services. This is scary. It threatens to curtail pharmaceutical development, not just through the inevitable price controls but also by deciding which medications are "necessary." It replaces the competitive interplay of medical supply and patient demand with the pressures of politics and bureaucracy. This is particularly disturbing because drug innovation worldwide depends on the existence of relatively free pharmaceutical markets in the United States.

Taking medicine out of the marketplace sounds humane to many people. Health care, they feel, is too important to be a matter of dollars and cents. We ought to be entitled to it. That feeling is what Medicare is all about.

But the alternative to marketplace medicine isn't infinite quantities of top-flight health care for everyone. It's political rationing: letting a monopoly decide which treatments are truly necessary and which patients worthy of them.

The Clinton plan calls for a test run covering smoking cessation programs, no doubt a worthwhile treatment for many patients. But how hard is it to imagine Medicare making such treatments mandatory, as a condition for future cancer coverage? How hard is it to envision a world in which certain cancer treatments are not deemed necessary, or worthwhile, for smokers--who, after all, brought their problems on themselves? If we can make young people wear motorcycle helmets because we just might have to pick up the medical costs of an accident, why not deny high-tech treatments to old people whose actions have made them sick? These questions are not going to get any easier as medical care advances in amazing directions over the next few decades.

The science fiction writer Bruce Sterling is haunted by fears of gerontocracy. He fears that as science extends longevity, old people will hold all the cultural, political, and economic power, crushing the aspirations and creativity of the young. It is a grim vision of what many people would see as a promising future--the longer life for which humanity has always yearned. To make it work in his novel Holy Fire, Sterling has to add another ingredient: No one can buy medicine in the marketplace. It is allocated by wise bureaucrats who reward those who take no chances with their health--or with anything else.

A risk-prohibiting world would be a strange legacy indeed for a man as reckless as Bill Clinton. But expanding Medicare is a step in that direction.