Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.


The Senate Reconciliation Bill: Wrapping Doctors in More Medicare Red Tape
Richard Dolinar, M.D., Heritage Foundation, 11-10-05

Government programs like Medicare can sometimes micromanage health care providers in a shortsighted attempt to improve quality. This not only adds reams of bureaucratic paperwork, but also can hamper innovation and hurt patients. Dolinar argues that new legislation in the Senate will make the current situation even worse.

The Senate has enacted a new system of Medicare payment that ties physician reimbursement to compliance with government reporting requirements. While this approach, sometimes called “values-based purchasing” or “pay for performance,” is superficially attractive, it has the potential to create more perverse incentives in the Medicare program without substantively improving the quality of patient care.
Congress should reform the flawed physician payment system, which is driven by outdated administrative formulas, and introduce changes that reflect the real market conditions of supply and demand for medical services. In the provision of services, there is no greater mechanism than a free market in rewarding quality and providing benefit. In a new Medicare system, driven by consumer choice and competition, patients themselves could pick a health plan that imposed “quality reporting” requirements on doctors. But that would be a matter of consumer choice, not government edict. Meanwhile, Congress should cool its hot regulatory passion and not make the irrational Medicare physician payment system even worse than it is.

Regina Herzlinger, a Manhattan Institute senior fellow, has argued that the government should instead focus on getting better outcomes, not mandating processes, because “there is no one recipe for medical care.”

Project FDA.
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