The core flaw in our current health care system is that consumers rarely have any incentive to seek out the best value for the money. The 2012 budget proposal put forth by Paul Ryan re-introduces the consumer to evaluating medical services on a cost-benefit basis and deserves serious consideration.
Ryan's 2012 budget proposal modifies Medicare by providing a premium support subsidy giving millions of seniors more control over their heathcare costs allowing them to create their own plan rather than Medicare's one-size-fits-all. Even Bill Clinton endorsed a form of premium support in 1999.
A piece in today's WSJ goes further:
But the key point is that premium support would reduce health costs over time by changing the incentives of the health market. MIT economist Amy Finkelstein's research suggests that Medicare's 1965 creation led to market-wide changes that explain about half of the increase in real per capita health spending between 1950 and 1990. Mr. Ryan's plan would be as consequential in reverse.And...
Medicare "as we know it" will change because it must. The only issue is how. Mr. Ryan is offering Americans a reform rooted in consumer choice and private competition, rather than political control and bureaucratic rationing. This is why he is under such ferocious liberal assault.It's going to be very interesting to see how Obama addresses this in today's speech. But if it's more drivel like what we heard last week about Republicans starving orphans and throwing grandma out into the cold, I think I'll pass.