By STEVEN RATTNER
Published: September 16, 2012
WE need death panels.
Well, maybe not death panels, exactly, but unless we start allocating health care resources more prudently — rationing, by its proper name — the exploding cost of Medicare will swamp the federal budget.
But in the pantheon of toxic issues — the famous “third rails” of American politics — none stands taller than overtly acknowledging that elderly Americans are not entitled to every conceivable medical procedure or pharmaceutical. […]
Meanwhile, Mr. Obama’s hopes for sustained cost containment are pinned on a to-be-determined mix of squeezing reimbursements, embracing a selection of the creative ideas that have spewed forth from health care policy wonks and scouring the globe for innovations. […]
…The problem is, the [Obama’s Independent Payment] advisory board can’t propose reducing benefits (a k a rationing) or raising fees (another form of rationing), without which the spending target looms impossibly large.
That’s the view of the bipartisan Medicare trustees, whose 2012 report stated: “Actual future Medicare expenditures are likely to exceed the intermediate projections shown in this report, possibly by quite large amounts.” […]
Let’s not forget that with the elderly population growing rapidly, even if cost increases for each beneficiary can be contained, Medicare would still claim a rising share of the American economy.
…The big money in Medicare is not to be found in Mr. Ryan’s competition or Mr. Obama’s innovation, but in reducing the cost of treating people in the last year of life, which consumes more than a quarter of the program’s budget.
No one wants to lose an aging parent. And with price out of the equation, it’s natural for patients and their families to try every treatment, regardless of expense or efficacy. But that imposes an enormous societal cost that few other nations have been willing to bear. […]
…Britain …uses a complex quality-adjusted life year system to put an explicit value (up to about $48,000 per year) on a treatment’s ability to extend life.