Salmon: Don't Let Doctors' Incomes Derail Health Care-Cost Reform

NEW YORK ( Reuters Blogs ) -- Sarah Kliff and Matt Yglesias both have good summaries of Steve Brill's monster Time article on health care costs. Both of them correctly point out that the heart of the piece is about negotiating power: Who has it (Medicare); who doesn't have it (the uninsured); and how the lack of negotiating power on the health care-consumer side inevitably leads to sky-high costs.

Yglesias says that the natural conclusion from this is that either Medicare should cover everybody -- which would massively increase Medicare costs while massively decreasing overall health care costs -- or else that rates should be set by the government, even if the bills are paid privately. He also says that Brill "rejects both of these ideas."

Weirdly, Brill's rejection of these ideas comes not in his conclusion, but higher up in the piece -- a mere 22,000 words in -- when he explains that if we reduced the age that people were eligible for Medicare, then that would save a lot of money. He then continues:

If that logic applies to 64-year-olds, then it would seem to apply even more readily to healthier 40-year-olds or 18-year-olds. This is the single-payer approach favored by liberals and used by most developed countries.

Then again, however much hospitals might survive or struggle under that scenario, no doctor could hope for anything approaching the income he or she deserves (and that will make future doctors want to practice) if 100% of their patients yielded anything close to the low rates Medicare pays.

Weirdly, in 24,000 words, which include a lot of railing against the large salaries enjoyed by hospital executives, Brill never supports or clarifies this assertion: He never says how much money doctors deserve, how much they actually make, or how high physician salaries would need to be in order to make future doctors want to practice. That last one, in particular, seems very unconvincing to me: The world is full of highly qualified doctors who would love to be able to practice in the U.S. for much less than the current going rate.

In his conclusion, Brill says -- again, without adducing any evidence whatsoever -- that "we've squeezed the doctors who don't own their own clinics, don't work as drug or device consultants or don't otherwise game a system that is so game able." It's a bit weird, the degree to which Brill cares so greatly about keeping doctors' salaries high: He certainly doesn't think the same way about teachers.

If the only thing preventing Brill from embracing sensible reform is a worry about doctors' salaries, then surely the obvious solution is to address doctors' salaries as part of a broader health care-cost reform. Given the path-dependency of such things, my idea -- and I'm coming at this from a very naive position, I'm no health care wonk -- is that we should simply allow insurers to outsource their cost negotiations to Medicare.