Chairman Ryan: Choice and Competition Will Increase Quality, Decrease Costs in Health Care

One of the key principles underlying the reforms in The Path to Prosperity budget is that when providers compete against each other for a patient's business -- costs go down and quality goes up.

We have seen this play out in the Medicare Part D (prescription drug) program. Part D has come in 40 percent below cost projections. While part of those savings can be attributed to lower-than-expected enrollment, Medicare's chief actuary has calculated that nearly 85 percent of the program's savings were "a direct result of competition and significantly lower Part D plan bids."

The reforms in the House-passed budget are modeled after these kinds of reforms: seniors choose from a set of guaranteed, Medicare-approved coverage options. Yet CBO's analysis did not model the long-term downward pressure on health care costs that would result from the effects of choice and competition.

Any attack on The Path to Prosperity's plan for Medicare that assumes health care costs will keep spiraling upward are failing to account for the beneficial effects of competition and choice.

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• paul-ryan
• elmendorf
• budget
• medicare
• health-care
• obamacare
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• cbo

[CrimsonDynasty323]

@efishunter, Medicare fee-for-service patients (which includes the vast majority of Medicare beneficiaries) have no motivation to shop around, so I disagree. Plus, providers get paid under FFS whenever they render care, whether or not it's the right care. The more they treat, the more they get paid. That's Medicare in a nut shell. Meanwhile, everything else in the private sector works the opposite way--purchasers shop for value, and sellers must meet their demands or they don't get paid. I

[tbwil11]

@efishunter Do you have anything to offer that reinforces your assertions?

[tbwil11]

@givethemahand Your question is not valid, I thought either/or drove you nuts? The system is headed toward insolvency for a number of reasons, most of which are tied to big govt waste and the lack of involvement of each individual patient.

[givethemahand]

Medicare D came in under budget because fewer enrolled than were predicted and because more generic drugs are used than anticipated. NOT because it is an efficient model. For Gods sakes. Which seems more efficient

A. Govt. pays the provider directly

or

B. Govt. pays the insurances companies who then pay the providers.

How does adding another middle man cut costs?