The Siren Song of the Left’s “Competition”

As previously noted, yesterday the Center for American Progress released its platform for altering entitlements.  In fairness, the paper does include some conservative ideas, most notably additional means-testing for Medicare beneficiaries.  But mainly the report demonstrates the fundamental difference between conservatives and liberals: Not only do liberals not believe in markets, they don’t understand (and/or don’t want to understand) how markets actually work.

Take for instance the CAP proposals that will supposedly “enhance competition based on price and quality,” such as the idea to “require health insurance exchanges to offer tiered insurance plans.”  On the face of it, the idea sounds reasonable enough – encourage plans to lower premiums by offering a variety of choices.  But the catch here – as in the rest of the CAP proposals – is that “competition” is government-defined, government-mandated, and government-prescribed.  For instance, if insurers want to offer, and patients want to purchase, less expensive insurance coverage that doesn’t cover all of Obamacare’s mandated benefits – and/or insurance purchased across state lines – both CAP and Obamacare would tax those who gain coverage through such means, because this “competition” is prohibited in liberals’ new health care utopia.

Then there’s the fact that the CAP report also includes numerous other proposals that involve expanding prescription drug price controls in various forms.  One may find it ironic – and ever-so-slightly contradictory – that a report supposedly focused on “enhanc[ing] competition” simultaneously expands government-dictated price controls.

Finally, CAP’s proposals for “competitive bidding” seem little short of comical for their ideologically-based hypocrisy.  The paper states that Congress should “use competitive bidding for Medicare Advantage” – but then just as quickly states that government-run Medicare itself should not compete.   And why doesn’t CAP want government-run Medicare to compete against private plans?  Because a paper co-authored by one of CAP’s own scholars released in September found that in many parts of the country, traditional Medicare can’t compete – it’s far too costly.  The study, outlined in an article in the Journal of the American Medical Association, found that private plans would be 9% cheaper than traditional Medicare under a competitive bidding proposal.

Mind you, the Left has no problems forcing seniors to pay more for private Medicare Advantage coverage, or forcing them out of their plans entirely – Obamacare’s cuts to the program will ensure both outcomes.  But when it comes to competitive bidding for government-run Medicare itself, CAP and others on the Left want nothing to do with such an idea, clinging instead to the shibboleth of government-run Medicare as a first step towards socialized medicine for all.  And that hypocrisy – competition for thee, but not for me – explains in a nutshell why liberal ideas such as those in the CAP paper are both unrealistic and ideologically dangerous.

The Left Defends an Inefficient Medicare System

One well-hidden fact in yesterday’s Kaiser Family Foundation report regarding premium support is this – even the Kaiser Foundation admits that in half the country, private Medicare Advantage plans are more efficient than government-run Medicare.  Take a look at the summary on page 4:

Among beneficiaries in the traditional Medicare program [under a premium support proposal], about half (53%) – 18.5 million beneficiaries – would be expected to pay higher Medicare premiums for coverage under the traditional Medicare program, because about half of beneficiaries in the traditional Medicare program live in counties where traditional Medicare costs were higher than the benchmark.

What that sentence means is that, in about half of the country, seniors private Medicare Advantage plans are cheaper than government-run Medicare.  Under premium support, these seniors would not have to pay more to afford coverage – they could switch to a cheaper private plan, or pay more to maintain their more expensive coverage.

The Kaiser report is far from the only study finding that private plans are more efficient than Medicare in many, if not most, areas of the country.  Whereas the Kaiser report said that Medicare Advantage plans are less costly in about half the country, former Congressional Budget Office Director Alice Rivlin found an even higher number.  Rivlin testified before the Ways and Means Committee in April that “88 percent of Medicare beneficiaries live in areas in which a bidding process [for premium support] would produce a second-lowest bid below the current cost of FFS [traditional] Medicare.”  And a recent article in the Journal of the American Medical Association found that private plans would be 9% cheaper than traditional Medicare under a premium support proposal.  So there is much evidence to suggest that Medicare Advantage plans can provide health care for seniors at lower costs – which would help make Medicare more sustainable over the long term.

Of course, the Left wants nothing to do with such facts, preferring instead to cling to the shibboleth of government-run Medicare as a first step towards socialized medicine for all.  As we noted yesterday, the Kaiser report obscures the reasons for its findings – it trumpets the talking point of higher costs for seniors under premium support, but fails to highlight the fact that in many cases, those higher costs are because government-run Medicare is less efficient than private plans.  Likewise, the Commonwealth Fund, in releasing a study on Medicare Advantage today, claimed that “the Medicare Advantage program must work just as well as traditional Medicare” and that Obamacare “will make that possible.”

The facts suggest that the Medicare Advantage program can actually work better than traditional Medicare – and at lower costs.  The only problem is that the Commonwealth Fund, the Obama Administration, and the “professional left” don’t want to make that possible.  And so the same crowd that complained so loudly about “wasteful overpayments” to private Medicare Advantage plans now wants to keep making wasteful overpayments to government-run Medicare – merely to satisfy their government-centric ideology.

Biden’s Medicare Malarkey

Who [do] you believe, the AMA, me, a guy who’s fought his whole life for this, or somebody who would actually put in motion a plan that knowingly cut – added $6,400 a year more to the cost of Medicare?”

The Council recommends that the AMA support transitioning Medicare to a defined contribution program that would enable beneficiaries to purchase coverage of their choice through a Medicare exchange of competing health insurance plans….

“Moving Medicare to a defined contribution program would expand patient choice…A defined contribution system would allow private insurers the freedom to design a range of plans that meet patient demand….

“A defined contribution system is likely to result in lower rates of health care spending growth, since insurers would be competing on price as well as benefit design, and would be directly accountable to patient demand for high-value, high-quality services….

“The Council firmly believes that implementing a defined contribution system, with strong regulatory protections for patients, is a responsible and feasible approach to strengthening the Medicare program.”

  • Report of the American Medical Association’s Council on Medical Service, issued last Friday

A Fanciful, But Inaccurate, Premium Support Study

The Kaiser Family Foundation released a study today regarding premium support proposals, which Democrats have used to attack Medicare reform.  However, the study is an academic exercise that, by the authors’ own admission, bears little relation to reality.  First and foremost, the study assumes full implementation of premium support in 2010.  This assumption is particularly problematic, given the many changes that have taken place in Medicare Advantage since then:

In other words, by using a 2010 implementation date, the Kaiser study ignores entirely the impact of the biggest changes to both Medicare and Medicare Advantage since the programs were created.  Moreover, the study assumes a “Big Bang” model, whereby all the changes to Medicare would take place at once – even though it admits that most proposals being discussed “would gradually phase-in a premium support system in five to ten years,” allowing changes to be implemented in a way that prevents drastic adjustments.

Three other important things you need to know about the Kaiser study:

  1. The study does not do a good job delineating two separate and distinct phenomena: costs due to disparities between traditional Medicare and Medicare Advantage, and costs due to disparities within traditional Medicare itself.  To use one common example, traditional Medicare’s spending is far greater in metropolitan Miami than in many areas in the upper Midwest (for instance, Wisconsin).  Yet under current law, all enrollees in traditional Medicare pay the same Part B premium nationwide – meaning that right now, seniors in Wisconsin pay higher Part B premiums that subsidize higher levels of spending in Miami.  The premium support proposal modeled by Kaiser would eliminate this disparity – meaning that under the study, premiums in traditional Medicare would rise substantially in Miami, to reflect that area’s much higher spending.  Critics would argue these higher premiums demonstrate the flaws of the premium support model.  But in reality, that’s not an argument against premium support – that’s an argument against the status quo in traditional Medicare, under which high-cost areas have had their spending subsidized by low-cost regions for far too long.
  2. The study does not fully model the ability of plan switching to reduce costs.  The headline figure about the number of individuals who would pay more to maintain their current coverage presumes that beneficiaries would not switch plans at all – not a realistic assumption under most scenarios.  And the study also assumes that low-income individuals would not automatically be assigned to a low-cost plan – current practice in Medicare Part D.  In short, the Kaiser study under-estimates both the impact that beneficiary choices and structural design could be used to facilitate enrollment in lower-cost premium support plans.
  3. At no point does the study even attempt to quantify potential budgetary savings from premium support.  The study goes to great lengths to outline the higher costs, but doesn’t make any estimate about the savings to the federal government from such a reform – or how it would improve Medicare’s long-term solvency.  In other words, the study focuses solely on pain to beneficiaries – without examining the gains to Medicare’s sustainability.

The Obama campaign’s response to the study – claiming that seniors “would have to give up their doctors or pay extra to maintain access to their choices” – is particularly rich.  Mind you, this claim comes from an Administration that will force millions of seniors out of their Medicare Advantage plans – not to save Medicare, but to fund Obamacare instead.  It’s yet another example of why Medicare needs real reform – and why this Administration is both unwilling and unable to deliver on it.

Paul Krugman’s Typical Trifecta

Writing in the New York Times this morning, Paul Krugman’s column hits the usual Krugman-esque notes.  The column, entitled “The Medicare Killers,” is liberal.  As you can tell from its title, the column is hyperbolically over-the-top.  And it’s also flat-out WRONG.  The most obviously false statement is his unequivocal declaration that not a shred of evidence exists that private plans can deliver Medicare benefits more efficiently than the federal government:

Wouldn’t private insurers reduce costs through the magic of the marketplace?  No.  All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.

As Bill Clinton might say, the accuracy of that statement depends solely upon what the meaning of the word “all” is.  Because a new study published in the Journal of the American Medical Association just this month found that private plans would “bid an average of 9% below traditional Medicare costs” under a premium support model.  Which might explain why other liberals at the Center for American Progress are now – disingenuously – advancing the exact opposite of Krugman’s argument: that seniors would have to pay more to stay in government-run Medicare.

So either Paul Krugman doesn’t know his facts, or he doesn’t want to know his facts – because he would rather keep making claims about government-run Medicare’s “efficiency” that he knows to be wrong.  Either way, it’s a sad statement that Krugman and his allies would have to stoop so low to defend the indefensible – and unsustainable – status quo.

Does David Cutler Believe in ANYTHING?

Last Friday the liberal Center for American Progress released a paper co-authored by Harvard professor David Cutler that amounted to a partisan – and thoroughly un-principled – attack on conservative entitlement reform proposals.  When it comes to premium support proposals in Medicare, the CAP paper alleged that traditional, government-run Medicare would be cheaper for senior citizens than a choice of private plans:

Seniors will face higher costs not only because of this cost shift from the government but also because the Romney-Ryan plan increases system-wide costs by promoting private insurance that will be more costly than the existing Medicare system.  The Romney-Ryan plan would cost more than the current Medicare system because, as the Congressional Budget Office has documented, private insurance companies have higher profits and administrative costs than Medicare does, and because the plan would reduce the market share, and therefore the purchasing power, of traditional Medicare….Ample evidence exists that premium support would not foster the type of competition that reduces prices.

There then followed a whole series of calculations showing how much more seniors would be forced to pay because the paper alleges the Romney-Ryan plan will drive them into private, less-efficient health plans.  This position would be slightly less disingenuous had not both CAP and Cutler himself, in a paper Cutler co-authored earlier this month, taken the exact opposite position and put out similarly detailed projections about how much more seniors would pay – not because private plans would be less efficient than government-run Medicare, but because they would be more efficient:

An estimate of what such a bidding system may mean for Medicare beneficiaries, using 2006-2009 data on MA plan bids and traditional Medicare costs, is shown in the TABLE.  Nationally, in 2009, the benchmark plan under the Ryan-Wyden framework (i.e., the second-lowest plan) bid an average of 9% below traditional Medicare costs (traditional Medicare was equivalent to approximately the tenth-lowest bid).  Since traditional Medicare is simply another plan option under the Ryan-Wyden plan, a beneficiary in 2009 would have paid an average of $64 per month (9% of $717) in additional premiums to stay in traditional Medicare….beneficiaries must pay more for traditional Medicare or join a private plan.

The rest of the CAP paper really needs no rebuttal – its author’s lack of principles discredits it enough on its own.  And as we have pointed out before, the Center for American Progress has done a thorough job disgracing itself by taking wholly illogical and inconsistent positions for no apparent reason other than political gain.

But one fundamental question is why Harvard University allows faculty members like David Cutler to use their institutional affiliation to put out such mutually contradictory and disingenuous work.  Universities claim to be bastions of academic freedom.  But changing one’s position in a matter of weeks, and putting out detailed estimates on both sides of an economic argument, may strike many as a perversion of academic freedom – engaging in either rank political opportunism, selling one’s “academic” conclusions to the highest bidder, or some combination thereof.  In short, academic freedom does not mean the freedom not to have principles – a lesson that Cutler and Harvard apparently need to re-learn.

Evidence and Ideology in the Medicare Debate

In a New York Times blog post last Friday, former Clinton Administration official Laura D’Andrea Tyson said that “when formulating public policy, evidence should be accorded more weight than ideology, and facts should matter more than shibboleths.”  On that count, she’s right.  But unfortunately for Tyson, the evidence shows that while liberal, top-down proposals to restructure Medicare – and the health care system – have failed, conservative proposals to introduce market forces into America’s failing entitlements could just succeed.

Tyson dismisses premium support proposals for Medicare, arguing that “the facts do not support” any conclusion that “competition would encourage more cost-sensitive behavior by beneficiaries, providers, and insurers.”  Actually, a new study published in the Journal of the American Medical Association just this month found that private plans would “bid an average of 9% below traditional Medicare costs” under a premium support model.  That’s a savings of tens of billions of dollars – coming directly from the positive effects of competition.

Conversely, Tyson claims that because competition won’t reduce health costs, “enforceable payment and cost-containment reforms like those in [Obamacare] are necessary.”  Those are the same payment reforms that the non-partisan Congressional Budget Office, in a January report analyzing dozens of Medicare demonstration programs over decades, said haven’t worked to contain costs:

The evaluations show that most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered….Demonstrations aimed at reducing spending and increasing quality of care face significant challenges in overcoming the incentives inherent in Medicare’s fee-for-service payment system, which rewards providers for delivering more care but does not pay them for coordinating with other providers, and in the nation’s decentralized health care delivery system, which does not facilitate communication or coordination among providers.

While the evidence is clear that Obamacare’s focus on payment reform has NOT worked to control costs, the signs for competition as a positive force slowing costs seem promising.  Which means that if Tyson wants to be bound by evidence and not ideology, she has every reason to endorse premium support as opposed to an extension of the failed status quo.

Peter Orszag’s “Fairy” Tale

Former Obama Administration Budget Director Peter Orszag published a Bloomberg op-ed this morning in which he criticized conservative proposals to introduce premium support in Medicare.  He claims that the “private market tooth fairy” can’t cut costs – arguing that the Congressional Budget Office doubted this premise, and that any cost differentials between government-run Medicare and private plans would be based on private plans treating healthier patients than traditional Medicare.

Orszag claims that CBO said that the private plans in the House Republican premium support proposal would be more expensive for beneficiaries than traditional Medicare.  But that’s only a quarter-truth, at best.  First, Orszag admitted that he used an out-of-date 2011 CBO report to characterize the 2012 House Republican proposal; he claimed he did so because the 2011 CBO analysis “was the only one that CBO has evaluated in terms of total, not just federal, cost.”

That sleight-of-hand was bad enough – but there’s absolutely no excuse for Orszag’s other key omission, which is that CBO currently has no technical capacity to determine whether or not competition can help reduce health costs.  A recent Health Matters column in CongressDaily (subscription required) pointed out this key flaw in CBO’s estimating models:

[CBO] Director Douglas Elmendorf told the House Budget Committee in 2011, his office doesn’t have the ability to account for any cost decreases (or increases, for that matter) that could come from competition between private plans.  “We are not applying any additional effects of competition on this growth rate over time in our analysis of your proposal.  And, again, we don’t have the tools, the analysis, we would need to do a quantitative evaluation of the importance of those factors,” Elmendorf said….

CBO’s current estimate puts the effects of competition at zero, which Gail Wilensky, a former head of Medicare and Medicaid in the George H.W. Bush administration, says is an even worse assumption than making some sort of educated guess.  “You know it’s not zero, that’s the complete cop-out,” Wilensky said in an interview.  “Their assumption is zero; it’s a very specific assumption, and it’s the one thing that’s definitely not accurate.”

Before joining the Obama Administration, Orszag served as Elmendorf’s predecessor as CBO Director.  He knows that this lack of capacity on the effects of competition is a MAJOR hole in the organization’s technical capacities – in fact, one could assign him at least some responsibility for failing to develop those models during his time as CBO Director.  Yet he mentioned none of this in the op-ed.

Instead, Orszag spent time criticizing the process of risk adjustment – in which plans with sicker-than-average beneficiaries receive higher payments than plans with healthier-than-average patients, to compensate the former for their higher costs and discourage plans from attempting to game the system.  Orszag alleges that risk adjustment is imperfect – which is true – but goes on to say that risk adjustment is so imperfect that private plans could still undermine traditional Medicare by soliciting healthier patients, despite the risk adjustment methods in place.  Orszag’s argument would sound slightly more genuine were it not for this paragraph included in Section 1343(b) of Obamacare:

(b) CRITERIA AND METHODS.—The Secretary, in consultation with States, shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section.  The Secretary may utilize criteria and methods similar to the criteria and methods utilized under part C or D of title XVIII of the Social Security Act.  Such criteria and methods shall be included in the standards and requirements the Secretary prescribes under section 1321.

In other words, Obamacare explicitly grants HHS the authority to impose the risk adjustment methods currently being used in Medicare Advantage – the exact same methods that Orszag claims will undermine traditional Medicare.  If those Medicare Advantage risk adjustment methods are so flawed, as Orszag claims, then why did the Obama Administration – of which Orszag himself was a member – permit them to be used in Obamacare Exchanges as well?

Orszag’s column got this much right – there is a “fairy” tale regarding premium support proposals.  But the real fairy tale lies in the inconvenient truths Orszag himself was unable or unwilling to mention in his supposed critique.

The Bad, The Ugly, and The Good of Liberal Entitlement Proposals

The New England Journal of Medicine yesterday published two new papers on entitlement reform and controlling health costs.  The first, by AEI’s Joe Antos and several co-authors, highlights several market-based mechanisms to slow the growth of costs.  The second, published by a group of liberal academics convened by the Center for American Progress, includes proposals that can be described as “The Bad, The Ugly, and The Good.”

First, the bad.  The CAP paper claims that “the only sustainable solution [to entitlements] is to control overall growth in costs.”  The problem is that, as we previously noted, over the next 25 years, demographics count for at least half – and as much as three-quarters – of projected increases in spending on Medicare, Medicaid, Social Security, and Obamacare insurance subsidies.  These demographic changes make existing entitlements untenable over the long term.  Yet by putting forth a half-solution focused solely on containing health costs, the CAP paper presumes a status quo of existing entitlement structures that is fundamentally unsustainable.

Next, the ugly.  In order to contain costs, the CAP paper proposes a system of supposed “self-regulation” that amounts to Obamacare’s Independent Payment Advisory Board on steroids:

Under a model of self-regulation, public and private payers would negotiate payment rates with providers, and these rates would be binding on all payers and providers in a state….The privately negotiated rates would have to adhere to a global spending target for both public and private payers in the state.  After a transition, this target should limit growth in health spending per capita to the average growth in wages, which would combat wage stagnation and resonate with the public.  We recommend that an independent council composed of providers, payers, businesses, consumers, and economists set and enforce the spending target.

In other words, CAP proposes that a board of “experts” can set spending levels for the entire health care system, and enforce this spending cap through “self-regulation.”  Many may believe that this system of “self-regulation” wouldn’t last long, because the fundamentally arrogant premise that a group of “experts” can micro-manage the health care decisions of the entire country (or even entire states) would soon be revealed for the folly it is.  The ultimate result would be a(nother) government takeover – this one of the supposed “voluntary” boards – and a federally-imposed system of “rationing with our eyes open” previously advanced by one of the paper’s authors, Donald Berwick.

Fortunately, however, even the CAP paper focuses on some good policy.  The discussion of competitive bidding features the rare admission from a group of liberals that market-based solutions can work in health care:

Instead of the government setting prices, market forces should be used to allow manufacturers and suppliers to compete to offer the lowest price.  In 2011, such competitive bidding reduced Medicare spending on medical equipment such as wheelchairs by more than 42%….We suggest that Medicare immediately expand the current program nationwide.  As soon as possible, Medicare should extend competitive bidding to medical devices, laboratory tests, radiologic diagnostic services, and all other commodities.

Given that strong endorsement of competitive bidding for some of Medicare, the real question is why the authors don’t believe in competitive bidding for all of Medicare.  CAP said as recently as this week that private insurance plans can’t price their coverage options below traditional Medicare – meaning traditional Medicare wouldn’t lose market share under a competitive bidding plan – so what are the authors of the paper afraid of?

Some may believe the reason why liberals are afraid to let traditional Medicare compete is the same reason why liberals won’t admit Medicare’s significant demographic problems: A desire to cling to the shibboleth that government-run Medicare represents the epitome of progressivism, and must remain unchanged and inviolate in perpetuity.  For all the demographic and other reasons we’ve outlined previously and above, that’s simply not going to happen, no matter how hard the left tries to (over-)regulate the health sector.  Stein’s Law guarantees that the demographic problems constituting more than half of Medicare’s increase in spending will not go unaddressed.

So the real question for the left is when liberals will admit that traditional Medicare cannot survive unchanged, or with mere tweaks at the margins, and needs fundamental structural reform.  Perhaps at that point the left will recognize that the competitive bidding structure they have promoted for parts of the Medicare program is best served to change the entire program.  Now THAT would be a change we could all believe in.

Liberals Believe IPAB Is the “Medicare Fairy”

The Center for American Progress recently released a paper making incoherent claims against conservative proposals for entitlement reform.  Take for instance the below paragraphs criticizing the Medicare premium support proposal included in the House-passed budget:

The House Republican premium support plan would also limit growth in Medicare spending to growth in the economy plus 0.5 percentage points.  But it’s unclear how this cap would be enforced.  As a result, it’s likely that the cap would be enforced by limiting the amount of vouchers provided to beneficiaries.  Since the proposed growth rate is much slower than the projected growth in health care costs, the voucher would leave beneficiaries to pay substantially more over time.  The CBO estimates that new beneficiaries could pay more than $1,200 more (in 2011 dollars) by 2030 and more than $5,900 more by 2050 under the House Republican budget.

What’s more, the Affordable Care Act already established an Independent Payment Advisory Board that will control the growth in Medicare spending.  While the target growth rate for the independent panel is growth in the economy plus 1 percentage point, the president has proposed reducing that growth rate to growth in the economy plus 0.5 percentage points—the same growth rate as the cap under the House premium support plan.

The premium support budget cap, therefore, would produce little or no savings compared to the president’s alternative approach.  But the cap under the premium support plan would have serious consequences for Medicare beneficiaries.

The CAP paper admits that under the House budget plan, Medicare would grow at the same rate as under the President’s budget.  But to CAP, the House premium support proposal would result in seniors paying thousands of dollars more in costs – while under the President’s budget, Medicare would grow at the exact same rate, but seniors would miraculously avoid paying higher costs, and still have the same access to care.  To some, this argument brings to mind the old phrase, “That dog won’t hunt.”

The premise behind these claims lies in CAP’s belief that only government – through Obamacare’s new Independent Payment Advisory Board and its rulings capping Medicare spending – can reduce health costs.  This belief can be found elsewhere in the paper, where CAP states that “traditional Medicare cannot provide an integrated benefit package…modify benefit designs, or offer provider network options” – all things that generally reduce health care costs – only to turn around and claim that “increasing the privatization of Medicare does not make sense because traditional Medicare costs less than comparable private coverage.”  It’s almost as if CAP believes a “Medicare fairy” can magically erase higher costs in a completely pain-free way that doesn’t affect seniors’ health care.

The problem is, most experts don’t believe CAP’s magical “Medicare fairy” exists.  An analysis from CBO released in January found that most Medicare demonstration programs implemented over the years “have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered.”  And both CBO and the Medicare actuary have concluded that Obamacare’s IPAB-driven spending reductions won’t work either: CBO concluded that the Medicare reductions will be “difficult to sustain for a long period,” and the Medicare actuary found that provisions in Obamacare “are unlikely to be sustainable on a permanent annual basis.”  The actuary went so far as to estimate that the law will cause 40 percent of hospitals and medical providers to become unprofitable in the long term.

While Democrats’ government-centric “Medicare fairy” approach has been weighed over the years and found wanting, the conservative idea that competition can help lower costs has never been truly explored.  As we noted last week, even the Obama Administration admits that competition has generated savings for parts of the Medicare program.  So instead of waiting around for a “Medicare fairy” that will never show up, why not empower patients instead of bureaucrats, and use competition to reduce costs in health care the same way it has in every other industry?