Medicare Rules: Bring 'Em On
By Bryan Caplan
David Henderson argues that (thanks to the Gipper, no less), Medicare imposes price controls on health care:
But what made it a system of price controls was that the government,
along with DRGs, made it illegal for hospitals to charge even a penny
more than the price the government came up with.
Sounds bad. But in my view, the next paragraph takes it all back:
[I]f a doctor takes even one Medicare patient, then he has to charge
Medicare rates to all his Medicare patients even if those patients
would rather ensure access by paying the whole bill (Medicare plus a
doctor’s additional charge) out of their own pocket. It is this system
of price controls that is causing many doctors to take no Medicare
So in other words, abiding by these “price controls” is a condition of receiving Medicare reimbursements – and many doctors turn down the deal. How is this any different from public schools hiring teachers subject to the condition that they (a) don’t charge their students extra fees, and (b) don’t moonlight?
Not only do I see no problem philosophically, but I actively favor such rules. I wish there were more rules! How about a rule that doctors can’t collect any Medicare payments unless they got a perfect score on their MCATs? Recite the entire Ring cycle from memory? Stand on their heads for a hour every day? Make the rules onerous enough, and Medicare effectively disappears – as it should.