Single Payer Wouldn’t Be Simple Either: A Fractal Story

A two-page bill could have extended Medicare and provided universal coverage,” writes Franklin Foer in The New Republic, contrasting Progressives’ preferred single-payer system with modern liberals’ 20,202 page Obamacare legislation. Unfortunately, it’s not true.

Here is one of a zillion reasons why. Say that Grandma Mildred goes to the hospital with pneumonia. Medicare will pay the hospital based on her Diagnostic Related Group (DRG): one fixed payment for Grandma’s stay based on her diagnosis of pneumonia, no matter how long or short her stay, no matter how many tests she gets. This is so the hospital won’t give Grandma an extra X-ray to collect more taxpayer money.

Okay. So why not just extend that payment system to the under-65s? The problem is figuring out how much the DRG payment should be for them. Right now, MedPAC figures out how much to pay for each DRG, using cost and care data for Medicare (over-65 or disabled) patients they have been collecting for years. They would need the same data (and much analysis) for the under-65s for the expansion. And we would need to decide whether DRG payments vary by age and if so, how.  Continue reading

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Talking about the Emperor’s Clothes: Causes and Consequences of Healthcare.gov’s Problems

Healthcare.gov’s disastrous launch has left me, as an Obamacare supporter, feeling dismayed and even betrayed. Sure I expected problems at the start. What new IT system doesn’t have problems? And the task involved—coordinating data from the IRS, a slew of private insurers, state Medicaid programs, and so on—was known to be no small feat, much more than private e-exchanges have to do.

But after last Thursday’s Congressional testimony, we know that it’s much worse. The main contractor for the back-end said, “our portion of the contract worked as designed.” All the contractors said their job started and finished with contract specs. Whether it works with the other parts was someone else’s problem. The government, the Center for Medicare and Medicaid Services, ostensibly in charge of putting the whole thing together, did not test the whole system until two weeks before the Oct. 1 launch. Anyone (or at least anyone who ever tried to get their iTunes purchases onto a non-Apple device or vice versa) could have seen the need for that test much earlier. Such seemingly willful incompetence shocked me, because it was so unlike my own knowledge and experience of the competence of the legislation and its implementation. As I taught about the legislation last Spring, I kept being impressed that various fixes and features dealt with potential problems.

What explains the chasm between the IT and the reform design? Much alludes me, but it is clear that Obamacare’s IT had nothing like the time or talent that that the reform design had. That is bad news for the website—long term as well as short term. But it is good news for the consequences of the disastrous web site launch. As Adriana McIntyre explained, various features will protect us from death spirals and other potential disasters.

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