How to Fix Medicare
Let's Pay Patients, Not Physicians

  • Title:

    How to Fix Medicare
  • Format:

    Paperback
  • Paperback Price:

    15.00
  • Paperback ISBN:

    978-0-8447-4265-6
  • Paperback Dimensions:

    5.5 x 8.5
  • 120 Paperback pages
  • Buy the Book

Click here to view the full book as an Adobe PDF.

Should Medicare pay for patient expenses the way automobile insurers pay for car-repair bills?

Medicare's current method of paying physicians sets fees for more than 8,000 separate procedures and services, totaling over $60 billion annually. With Medicare's formulas underpaying for some services and overpaying for others, this complex system is an inefficient use of resources that discourages the use of primary care in favor of more expensive specialty services. Provided with virtually unlimited medical services at low or no cost, patients today have little incentive to choose their care wisely.

In How to Fix Medicare: Let's Pay Patients, Not Physicians, health economist Roger Feldman argues that a radical shift in Medicare policy is not only possible but imperative. Under Feldman's "medical indemnity" proposal, Medicare would pay each patient a fixed amount of money, reserving larger subsidies for sicker people. Patients, in turn, would select their own medical services from providers who would set their own competitive rates. A medical indemnity system would do away with the distortion in patients' incentives wrought by conventional Medicare coverage. Given a fixed amount of money to spend on medical care, patients would have strong incentives to shop for the combination of services, providers, and prices that most closely meet their needs.

Medical indemnities have already been tested successfully in the Medicaid program for some patients needing long-term care services. Feldman's indemnity system protects patients whose conditions are much costlier than average while avoiding the proliferation of costly individual indemnities.

Implemented wisely, medical indemnities would expand consumer choice, improve program efficiency, and simplify the Medicare program.

 

Roger Feldman is the Blue Cross Professor of Health Insurance and professor of economics at the University of Minnesota.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Roger
Feldman
  • American Enterprise Institute (AEI) adjunct scholar Roger Feldman is the Blue Cross Professor of Health Insurance and Professor of Economics at the University of Minnesota, where he specializes in applying economic theory to health services research. He is currently a member of the Congressional Budget Office’s Panel of Health Advisers and consults for various federal and state agencies on health care–related matters.

    Previously, he served on the senior staff of the President’s Council of Economic Advisers. From 1988 to 1992, he directed one of the four national research centers sponsored by the Centers for Medicare and Medicaid Services (CMS) and has advised CMS on the design of a demonstration of competitive bidding for Medicare health plans. At AEI, Feldman’s research focuses on Medicare reform, competition in health care, and health insurance markets.

    Feldman holds a Ph.D. in economics from the University of Rochester. He obtained an M.S. in economics at the London School of Economics, where he was a Marshall Scholar, and a B.S. from the University of Wisconsin-Madison.

  • Phone: (612) 624-5669
    Email: feldm002@umn.edu

What's new on AEI

image The Census Bureau and Obamacare: Dumb decision? Yes. Conspiracy? No.
image A 'three-state solution' for Middle East peace
image Give the CBO long-range tools
image The coming collapse of India's communists
AEI on Facebook
Events Calendar
  • 14
    MON
  • 15
    TUE
  • 16
    WED
  • 17
    THU
  • 18
    FRI
Wednesday, April 16, 2014 | 10:00 a.m. – 11:00 a.m.
Calling treason by its name: A conversation with Liam Fox

Join us at AEI as the Right Honorable Liam Fox sits down with Marc Thiessen to discuss and debate whether America’s intelligence agencies have infringed on the personal privacy of US citizens.

Thursday, April 17, 2014 | 4:00 p.m. – 5:00 p.m.
The curmudgeon's guide to getting ahead

How can young people succeed in workplaces dominated by curmudgeons who are judging their every move? At this AEI book event, bestselling author and social scientist Charles Murray will offer indispensable advice for navigating the workplace, getting ahead, and living a fulfilling life.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.