This is an excellent interview of Rep. Paul Ryan (R) worth reading in full.

Photo credit: By Katie Derksen/The Washington Post

Rep. Paul Ryan is the ranking Republican on the House Budget Committee. His budget proposal, 'A Roadmap for America's Future,' was scored (pdf) by the Congressional Budget Office as erasing the long-term deficit entirely. I commented on it here. I spoke to the congressman this afternoon about his bill, the conservative vision for health-care reform, and the problems of Congress. The transcript has been lightly edited for length and clarity.

Your budget appears to agree with the Obama team on an important premise: The deficit problem is a health-care problem.

Absolutely. Just look at the numbers. It’s not a theory. It’s a fact.

Looking at your proposals for Medicare and Medicaid, I’d characterize your approach as privatizing programs and then capping the government’s contributions to them.

I think you compartmentalize the programs. Don’t do that. I’m trying to take a disjointed series of programs and transform them into a real health care market. You have to look at the other things I do in health care outside of the entitlement programs to get a full sense of what I’m trying to accomplish.

Obviously, you and I have different premises and philosophies, but you wrote a very good piece last year on the tax exclusion that really hit the nail on the head. I believe that by fixing the tax exclusion – which subsidizes the wrong people, by the way, people with jobs who already have health insurance – you’re attacking the root cause of health inflation. That’ll change the health care marketplace itself. Going forward, what I try to replicate in my Medicare and Medicaid proposals is a system that makes the patient the nucleus of the system. That will make a system in which doctors, hospitals and insurers compete against each other for the patient’s benefit.

When you talk about making people more powerful, that brings up some questions about the employer market. In theory, the employer market is big enough to have this effect. It’s big enough to work like a real market. But we both agree it’s not a real market, and even more, that you should end the exclusion. Where we part is on the question of who has the power. I’d say consumers don’t have the power. You’ll give consumers buying power. But I’d look at decisions power. And the real power there lies with doctors. I don’t do anything without a doctor telling me to do it. How does this change the doctor’s behavior?

What I also have in this bill is the health care services commission. It is a system whereby all these stakeholders in health care – providers, doctors, insurers, consumer groups, hospitals, unions – all come up with standard metrics that are standardized that we hold for price and quality and best practices. It’s a lot different than a comparative effectiveness approach. This way, the consumer sees who’s good and who’s bad. I think we need to make a big reach towards transparency.

I had lunch with a bunch of manufacturers yesterday. One gentleman had a 20-minute cataract procedure that cost $14,000. He couldn’t understand why it cost so much. In Milwaukee, the price of the same MRI ranges from $400 to $4,000. So you have a system in place that doesn’t function like a marketplace. You need to inject those market principles and an economic incentive to act on them. Then you have to break the insurance monopolies. That’s why I’m a fan of risk pools to subsidize people with preexisting conditions. I have a Medicare exchange to set up a certified Medicare system so people can select among those plans.

The whole point I’m trying to make here is that we have to understand these programs are growing themselves into extinction. The question, at the end of the day, is who’s going to be in control of this system. Is it the individual or the government? I don’t want the government more in control of the system.

A word we should bring into play here is "rationing."

Rationing happens today! The question is who will do it? The government? Or you, your doctor and your family?

That ends up being the interesting question. The theory of the Medicare system, of the European systems, is that the best way to do this is to have the government fund research to discover the effectiveness of treatments and then use its purchasing power the same way Wal-Mart would – to drive prices down. Medicare, as the CBO said in its report to you, pays less than private insurance.

But Medicare is growing at an unsustainable rate. And yet it underpays doctors.

But private insurance is growing that quickly as well. And this question of underpayment is doctors and hospitals making less than they expect to make. What you’re talking about, bringing Medicare spending down very sharply, is even more vulnerable to that critique. You do it on the patient side, not the provider side, but they will feel they’re getting vouchers that aren’t generous enough to keep up with health-care costs.

So what I’m saying is that rather than having government ration care to manage decline, let’s take those market signals that work in every sector of the economy to reduce cost and improve competition. I got Lasik in 2000. That’s a cash surgery. It cost me $2,000 an eye. Since then, it’s been revolutionized three times and now costs $800 an eye. This sector isn’t immune from free-market principles.

The Lasik thing is interesting because it gets to the question of whether health care is a market. When I think of getting Lasik, or buying a television, I can walk out of the store. That’s what gives me as a consumer my power in the market. But if I have chest pains and my doctor prescribes a bypass, how do I walk out of the store?

In Milwaukee, the price of bypass ranges from $47,000 to $100,000. Nobody knows where to go for quality, or the prices. So wouldn’t it be good for the prices and quality metrics to be publicized? And let people make a decision. There’ll always be some level of co-pay or deductible or co-insurance that’s going to push people towards the best value. Then, when you have those chest pains and you’re being rushed in the ambulance, you’ll be rushed to a hospital that’s all along been competing for business and has been improved by that process. You’ll get better health care than you otherwise would. That’s how you improve the system.

You’re arguing that the benefits of competition accrue, and so even if you don’t choose at the moment of emergency, there’s still an effect from a higher-functioning market.

Absolutely. I don’t know anything about cars. I look at Consumer Reports and their ratings. What matters is that someone who knows about cars went and figured this out. The car company is competing for the really tough customer who goes under the hood. I’m not saying every American has to be that consumer. But enough people have to so the rest of us can benefit.

But take cars. Lots of people buy crappy cars, or bad televisions. I make bad purchases all the time. Liberals and conservatives are together on the publishing of quality metrics. But this stuff is more complicated and diffuse than cars. That’s not to say the consumer shouldn’t have a role. I’m a big Wyden-Bennett guy, frankly.

I have a lot of respect for that plan. If I were a Democrat, it’s the bill I’d be on. He’s got more mandates than I’d like. But if Ron Wyden and I were in a room, we could hammer out a deal by tomorrow.

Well, let’s talk about Wyden-Bennett for a second. We’ve seen this health-care reform debate wear on. Putting aside whether the Democrats have a good plan, it’s certainly been good for Republicans to make it into a bad plan. Wyden-Bennett, which is more disruptive, never went anywhere. It becomes very difficult to see how anything big enough to work is safe enough to propose.

You’re so right about that. I did some thinking when I first put this out in 2008. I decided that if the people of southern Wisconsin sent me here to represent them, I need to be part of the solution. I feel obligated to put big ideas on the table and break up the status quo and this awful inertia we have out here. We shoot at anyone who pops their head above the foxhole and proposes anything big. This fiscal situation will destroy us if we don’t start stepping up. I don’t have all the answers. I put out a real, credible plan in the hopes that other members of Congress will do the same, and we can get on with the business of hashing out how to fix the problem.

So there are a couple of folks out there who do this. You, Wyden, Pete Stark, who feel safe enough to propose big things. But how do you deal with the fact that nobody is wrong about the political benefits of this stance of full opposition? Republicans are doing well at it this year. Democrats did it nicely in 2006. No one is wrong about this. You and I agree that market incentives matter. And the market of elections pushes against cooperation.

This is my 12th year. If I lose my job over this, then so be it. In that case, I can be doing more productive things. If you’re given the opportunity to serve, you better serve like it’s your last term every term. It’s just the way I look at it. I sleep well at night.

Then let’s back up to the Senate bill. Some of the things in that bill, like exchanges and redoing the market, are in your bill. I know you don’t agree with it. But if you were paring it back, what would you keep?

The whole premise of it is wrong, in my opinion. It’s to have a more government-centric system

What’s government-centric about it exactly?

You’re erecting a bureaucracy to determine how this happens. Federalizing the regulation of health insurance in Washington. You’re having a person design how insurance can be sold. You’re mandating people buy it. It will stifle innovation and competition in health care. If we were talking about Wyden’s plan, I could give 15 things I like. But this isn’t that.

Let me ask you about the regulation piece of this. Insurance is a complex product. People get sold stuff that just plain doesn’t work and they don’t know it till it catches them. The Senate bill doesn’t design plans in a granular way. But it sets the minimum for it.

I agree with that. In the Patient’s Choice Act, we do an actuarially equivalent minimum in each exchange that’s equal to the Blue Cross/Blue Shield Standard Option.

But that’s how the Senate bill works, too. It’s an actuarial value.

I’m more familiar with the House bill. But the Senate bill goes a lot further than that. You need to define what insurance is. I agree with that. But what we’re trying to achieve here is a system in which the patient is the driver of it, not government bureaucrats.

Let me back you up on that, though.

I gotta get going in one minute, I apologize.

Final question. You agree that we need to define what insurance is. In the Senate bill, you’ve got an actuarial value for insurance and patients come and decide which plan to purchase. I look at the bill, and I’m more of a big government guy, and it looks like an application of market principles to me. Where in that exchange transaction do you find the heavy hand of the government?

We set up state-based exchanges. You don’t have to participate in the exchange if you don’t want to. You don’t have to sell it in the exchange if you don’t want to. I don’t want a closed system that will gravitate towards more government control. I want it to be decentralized that has regulatory competition and market competition. You can be in or out of the exchange, which keeps everybody honest. That to me is very important.

"
Source link
=============================

I plan on reading his budget proposal (PDF file referenced at the onset of the interview).

Visiting this site, it sure looks like a campaign in the offing although it is a site in his role as the Ranking member of the GOP Committee on the Budget. 

Anyway, if you read his proposal, please post your thoughts below. I will too. Thanks!


-- Edited by Sanders on Thursday 4th of February 2010 12:52:32 AM