COVERITLIVE.COM

10:08

Cato Institute - Live Blog will begin now

10:10

Michael F. Cannon - President Obama said that sometimes we do know what stuff is unnecessary. But if we knew that, why wouldn't people -- doctors -- be eliminating it already? If this were an easy problem, we would have solved it already.

10:12

Michael F. Cannon - President Obama is advocating socialized medicine. To learn why, come to Cato's policy forum tomorrow, "Is This Socialized Medicine?"

10:14

Michael F. Cannon - The president is wrong about financial incentives for two reasons.

One, the problem is not fee-for-service payment. The problem is that we don't have a level playing field between fee-for-service and other payment systems.

Two, the reason we don't have that level playing field is government. The fact that the government is heavily involved in our health care sector gives the industry (i.e., doctors) the ability to preserve the payment system they prefer.

10:15

Michael F. Cannon - Great question, Diane! Bad answer, Mr. President!

The reason the Mayo model of health care delivery hasn't spread is government: clinician-licensing laws, insurance-licensing laws, the tax code, Medicare, Medicaid.

10:16

Michael F. Cannon - "Like it or not, the government is going to be involved"?? So much for being open to all ideas.

10:16

Cato Institute - Obama: Senior citizens love health care

10:17

Cato Institute - Question: What will the administration do to make the ER not the primary source of care

10:19

Michael F. Cannon - Medicare was progress?? The State Children's Health Insurance Program was progress?? Where is the evidence, Mr. President?

Click here for the weak evidence re SCHIP.

Click here for the weak evidence re Medicare and universal coverage generally.

10:19

Michael D. Tanner -

I'm concerned by this whole idea that there is a single "best" way to practice medicine or provide treatment. Health care value is highly idiosyncratic. What is quality care for me, may not be quality care for you. If the government gets involved it will either aim care toward the middle/average, or more likely politicize its decisions, or both. Either way, its not a decision some board can make by a 6-5 vote.

10:24

[Comment From Greg Reihing ]
Question for the expert: Is it true that the health care costs rose with the inception of Medicare?

10:24

Michael D. Tanner -

The government is going to start determining how much various types of doctors should earn?

10:26

Michael F. Cannon - Hear, hear, Mike.

Notice that the president talks about making changes to the payment system . . . getting the incentives right.

Different payment systems deliver different dimensions of quality. Capitation delivers more preventive care, coordinated care, comparative-effectiveness research, et cetera. Fee-for-service payment allows for greater choice and more aggressive medicine. Hybrid payment systems (e.g., "bundled" payments) deliver various mixes of these dimensions of quality. There is no ideal or perfect payment system because different people value those dimensions of quality differently.

That's why we need competition between different payment systems, so that each can put pressure on the others to improve on the dimensions of quality where they are weak.

Anyone who says we need to change the payment system has it wrong.

10:26

Michael F. Cannon - Increasing preventive medicine does not save money, Mr. President.

10:27

[Comment From Greg Newburn ]
Question for Cannon: Shouldn't we just put a restrictive price control on all medical services?

10:28

Michael F. Cannon - Or more precisely, Mr. President, isn't it part of your plan to change the financial incentives that doctors and hospitals face, so that THEY will ration care to patients?

10:29

Michael F. Cannon - Greg #1: Health care spending exploded with the creation of Medicare.

Greg #2: If you want shortages, sure. BTW, Pres. Obama is way ahead of you.

10:30

Michael D. Tanner - We could--and should--also change the incentives for consumers. Third-party payment insulates them from the cost of their consumption, incentivizing them to consume more. The bad incentives aren't just on the supply side. But President Obama wants to expand third-party coverage making those incentives worse.

10:32

Cato Institute - Obama: If you are happy with your plan, then the government doesn't want you to have to change

10:32

Michael F. Cannon - "We don't want you to have to change."

Sounds like the president is backing off his completely implausible promise that he won't take away your coverage.

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