Saturday, March 20, 2010

In Praise of Free Lunches

I enjoy skilled writing as much as I enjoy good debate. Former Ms. Equity Private, author of the occasional Finem Respice, and I believe more recently, ZeroHedge co-conspiratress, "Marla", provides both. In the past, I was flattered that she took yours truly to task over my lyrically-nostalgic view of the nobility inherent in Japanese paternalism, and the derision I heaped upon certain so-called activist carpertbaggers. Judged by the resulting comments, her reply was met with certain suspicion by readers.

Now it is my opportunity to return her favours. Consistent to her beliefs, Madam EP zealously champions the primacy of the market in general, and a view opposing The State's role in Health Insurance detailed in this very articulate though, I believe, ultimately misguided post, in which she draws comparisons between risk-bearing insurance, (whether marine or catastrophe), and healthcare. Subsequently she forecasts incipient doom to those who tread the interventionist path, which for her, is but an entree to indict all manner of so-called redistributive free-lunches, with the focus remaining pejoratively upon "socialized" medicine.

It is hard to disagree with the logical veneer of many of her points. For example, there is much merit in the thought that were one to...
"Kill risk pricing information, insurance is doomed."

While utterly true in capial-intensive lines, this has little to do with health insurance, which, from the health insurers perspective, (particularly where the risk pool is wide and deep), I will argue, is essentially a TPA (third-party administrator) function.

She oh-so-rightfully points out that
"Risk pricing is tricky at the best if times."

This is indeed true the sparser the event set, and the more remote on the tail the probability of loss. It's trickiness (along with bog-standard human greed, and shortsightedly constructed asymmetrical incentives) are some of the reasons why there are feast and famine underwriting cycles in many lines, with reinsurance being most exemplary. However, the deceptively simple truism ignores that the more perfect the information and the more diversified the risk pool, the more one approaches perfection in the pricing of risk. Admittedly, even with the best models and information, it is likely that it never will be possible to bulls-eye the odds on a satellite spontaneously combusting during launch, or a Tokyo Quake laying waste to the night-owl haunts of Roponggi. But healthcare IS decidedly different. So-called underwriting losses ARE highly predictable across the population, as are both sides of the income statement (particularly where there is a single-payor with intimate knowledge of the cost-side of the equation). And unlike Lloyds or other Catastrophe Insurance examples, the implied leverage in Healthcare across the population is extremely low. Insuring Florida or GOM Wind, or California Quake and other peak risks are the opposite on all accounts, which is why (in these lines) capital is almost always insufficient relative to the potential required cover, and one of the reasons why peak-risk reinsurance prices, are elevated. Her lack of appreciation of these differences is revealed as she attempts t0 apply her classical definition of insurance.
the presence of some probability of loss (risk) and the ability to transfer it (typically for a fee or premium) to an entity or entities with capital (one hopes) across which it can then be diversified.

It is not picking nits to suggest (even yielding at least some uncertainty) that capital requirements for the optimal diversifying entity across the risk-pool are miniscule in comparison to that required to make good on a tempest-tortured or pillaged fully-laden East India Co. vesse,l Northridge Quake, or a Cat5 named "Cassie" ploughing through Miami.

Mlle. EP rightly (no pun intended) continues that
Healthcare isn't and never was a "right"

a sentiment which I violently agree with (at least, to-date, in the USA), and so point out, by extension, that "cheap" healthcare therefore cannot be a right. Indeed Healthcare is no more a right than Liberty or the sanctity of owning property which become rights when men (sorry girls, but it was men) declared it thus. I would argue that hierarchical domination is the natural order within human and similar branches of the animal kingdom, and that individual "rights" ascended only through the organization of society and the extension of laws to guarantee present cornerstones such as freedom and property rights. Healthcare follows in this vein of argument. Liberty, (and in other nations) universal health insurance covereage and public finance of basic insurance for those unable to pony-up, are not naturally-conferred, but societal constructs not as a result of their ordination by a deity-of-choice, but because they yield meaningfully large positive externalities far in excess of their costs.

She continues with yet another correct observation that
"Mandating myopic risk pricing for political reasons is nothing more than a rank subsidy."

which is undoubtedly correct when she indicts subsidized prop-cat insurance that encourages the brazen to construct houses on known flood plains, or exposed coastal areas prone to extreme disasters, privatizing the gains and socializing the losses through the insurance subsidy. Though such political intervention in the prop-cat markets are certain vote-winners where interest-intensity is elevated, this is not the primary driver in regards to health insurance, where the intent is precisely the opposite. The public policy objective (given the very low underwriting risk) is NOT to legislate subsidy, but to finally price the so-called risk at its true actuarial cost, and extend the savings to insured AND as importantly, to the taxpayers who are currently insuring parts of the market due to market failure, information asymmetries and the like. There is nothing myopic about the desire to know the price across the population. Armed with the true costs of basic coverage, a relatively simple actuarial exercise for a single-payor even before tackling the systemic inconsistencies and conflicts (e.g. doctors owning hospitals, etc.), one can then discuss the quite separate public finance issue of how to extend insurance to those presently unable to afford it. This is not to say that one could not conjure an image of a hideously comprehensive and unaffordable system that makes little sense either in terms of systemic incentives or finance, but this is NOT what currently exists in France, Germany, Netherlands, Belgium or Canada, nor what should be considered for implementation in the US.

Miss EP then capitulates, stating the obvious that
Habitual reimbursement for regular, recurring costs is not insurance, people.

Indeed, not for a PE professional customer's viewpoint perhaps, but for the meaningfully large percentage of Americans who live paycheck-to-paycheck, it is. Her point was my point: health insurance is essentially a TPA function. Premiums in, claims out. play the float (when there is one), carve-up and cherry-pick the risk-pool and capture the fat tail. But this very fragmentation does precisely what Libertarians purport to detest: privatize the gains and socialize the losses.

Then Miss EP gets contentious. She asserts:
"...it actually takes very little wattage to understand that discrimination is the very purpose of insurance. In fact, insurers employ legions of experts toiling away to practice the most base sort of discrimination every day. They are called "underwriters."

Not to be pedantic, but actually, the ones toiling away and finding the anomalies are called "actuaries". The underwriters are the ones with the gift of gab, who cut class at uni (if they went to one), buy the drinks, and pay for the less-than-salubrious forms of entertainment on behalf of their clients. (Apologies in advance to my friends who are underwriters, if you think this an exaggeration). Yet, while discrimination is indeed the route to profitable underwriting, it doesn't follow that it is the route to better risk-pricing. It certainly yields a more profitable spread in regards to return upon capital deployed, but doesn't deterministically push prices towards actuarial value. Good discrimination is essentially predatory zero-sum behaviour - an exercise in torturing the data until it yields a profitable anomaly, one where the underwriter (thanks to his clever actuary) captures the lion's share, leaving the underwritten, begrudgingly, the crumbs. It also strikes at the heart of what makes Health Insurance patently different from other insurance markets mentioned which is that Health Insurance is a necessary exercise in Generational Smoothing. Tempests afflicting laden triple-masters, or natural disasters do not care in the least about the age profile of who is insured. But maladies of senescence do. Health insurance, therefore, is necessarily an exercise in everyone who can paying a percentage of the entire risk pool for the duration of the life-cycle, to prevent privatisation of the profits and socialisation of the costs, which is to the detriment of BOTH insured and the taxpaying "underwriters" of last resort. It is not merely fair, but it is seemingly the only way to assure that finance-able insurance is, in fact, finance-able, regardless of age, or existing conditions, precisely because one cannot know who, what, when or if one will be afflicted, and/or what side of the tracks one will be inhabitating when and if "it" happens. This, it seems to me, captures the more pertinent characteristics of insurance more relevant to healthcare, the insured, and it's associated social utility. To place underwriting profit in front of such practical utility is a rather bizarre approach to the problem--solving of quite real-world problems that the real world (in America, at least) has proven itself incapable of solving.

Universal health insurance has many positive externalities reasonably outweighing any unlikely negative errors stemming from the accuracy of the risk-pricing component itself. Enhanced family stability and reduced anxiety, increased corporate managerial focus as our enterprises are relieved of managing (though not necessarily contributing towards the finance of) legacy, current, future and burdens; improved health and productivity; freed-up emergency-rooms in hospitals; lower absenteeism; diminished costs resulting from earlier intervention; increased labour-force flexibility making part-time employment a viable alternative for many; a large percentage savings of GDP that can be usefully channelled into economically virtuous free-market things like venture capital and attendant enterprise creation, rather than funding Richard Scrushy-like vintage car collections for future healthcare contrapreneur wanna-be's gaming a broken system. It has the ability to create a consistent and honest accounting of costs, allowing the the forthright discussion of choices at hand, be it rationing of services or the trade-offs between the nature of the basic insurance coverage provided, and that which can be afforded. These are powerful and compelling reasons to NOT fragment the risk pool.

Miss E.P. is of course right to viscerally feel as she does about about discrimination, and the perceived unfairness of presently healthy people footing the bill for the unlucky, unwise, or just plain self-destructive. But these protestations are bogus. For in the real world of real insurance, life is far from fair as much by design as by chance. A Cat-5 rolling across Florida, or a well-placed 7.5 California quake will result in higher insurance prices everywhere, in primary and reinsurance prices alike. The cost of insurance IS at the least, the cost of insuring on an aggregate basis. Only happenstance and serendipity separate winners from losers in this game. Healthcare insurance by contrast, benefits from low implied leverage, low volatility of losses, a reasonably short-tail, and de-minimus capital costs which on a practical basis diminish contrary protests due to solvency or fears of implicit or explicit guarantee. Importantly, there are many knobs to turn in order to attenuate the potential mismatch between side of the income statement: premium levels, co-pays, benefits, usual and customaries, are all within the arsenal, and all can be turned at a moment's notice where the public interest is concerned. There are indeed fault-lines over whether the a 45 year old should be granted the right to fertility treatment, whether the requirement for Viagra is merely "a shame" or a legitimately reimbursable expense. Wiser folks than I have agreeably determined this in the systems of our peers, and so I am certain that we, too, if pushed would be able to appropriately decide as well.

Yet, Miss EP doesn't stop there. She makes a further great big leap from gubmint disintermediation in the health insurance market (consolidation is perhaps a more accurate term) to a Glenn Beck-like conspiracy that healthcare reform is merely a guise for politicians to gift out $20,000 per family- in a paranoid belief that the primary purpose of a national health-insurance scheme is a stealth wealth grant to the masses clamouring to suckle the teat of the government milchcow. She has, by the end of her missive, seemingly missed the obvious virtue in simple risk-sharing, and the necessity of bringing some order and rationality to costs, in lieu of a mantra that resembles "...don't get sick...don't get sick, AND don't get old.."

If a well-functioning, reasonably cost-effective system of national health insurance was merely a utopian dream, or if the current American system was viable in any way other than providing prima-donna services to the top veneer of the income scree, I could empathize with the skepticism of Miss EP. But it's not. The chaotic American model of healthcare and its finance is irredeemably broken. There are many examples of meaningfully better-functioning systems providing universal coverage with excellent care and outcomes, while spending far less - well-organizaed systems in between the UK's 9% of GDP achieved with near-draconian rationing, and the 18%-plus of GDP consumed in the US while still leaving a meaningfully large percentage without coverage. The existence of such tangible realities amongst our peers, all with levels of intervention between these extremes, provide a well-worn path for us to follow, and reap the subsequent benefits if we choose to suspend the misconceived belief that social insurance is a "free lunch" replete with only negative externalities, abuse and fraud that will ultimately lead to an America ruled by a Politburo headed Fidel Castro, Jr.

The containment of systemically unaffordable, unsustainable privilege (as we have seen in Greece or Detroit) is always met with with righteous indignation, whether they are unions (the whipping boys of the right), bankers (the whipping boys of the left), or service providers who (in the case of healthcare feel it appropriate to discriminate pricing in ways that humiliate the uninformed (and even the informed) with seeming randomly-generated prices that bear little relation to the cost of services provided.

To be certain, cost-cutting can be painful. And one can conjure some possible negative externalities. But do not be frightened by threats conjured by medical, medical device, and pharmaceutical lobbies, as societally we attempt (finally!!!) to share market information amongst ourselves in order to drive health spending from >18% of GDP to some OECD median. France, with its single-payor has no shortage of doctors or nurses. No shortage of quality pharmaceuticals available to all at dramatically lower prices than in the USA. No shortage of pharmaceutical or biotech innovation. No paucity of stents, surgical bypasses, nor cancer treatment centers. And no shortage of sensibility when it comes to non-partisan pragmatic design, and implementation of public health policy. Obviously, mistakes have been, and continue to be made. But they are, generally-speaking, corrected in a forward-thinking, iterative process. And the fact remains they spend 4 to 5% of GDP LESS than the US (combined public and private expenditure) and achieve universal coverage with better overall outcomes, at least as measured by independent healthcare advocacy groups.
How much longer, and what calamity will it take for genuine non-partisan pragmatic reflection from all sides to meditate upon others success (and failure) then emulate and implement accordingly?

17 comments:

Manc Trader said...

What a wonderfully written and persuasive piece !!

I tend to support libertarian lines of argument but instinctively felt healthcare was different. You explain so clearly what most of us just sense.

wcw said...

Nice rant, but I just can't read it. Then again, my grandparents all lived and died under "socialized" medicine. The more my wife and I have to deal with the US system instead, the weepier I get that we can't get what a pissant little country like Austria could provide them. We're top-percentile earners, and our healthcare still sucks.

I am sure that C-suite top-basis-point earner US healthcare is Teh Best, though.

Degringolade said...

Well done.

Needless to say, I will be providing a link to this fine piece on my own site, and plot behind your back as part an parcel of my own spiteful jealousy of a job well done.

The difficult issues that we face in health care are not made any easier by the spittle-strewn ideological battleground that is the current American setting.

Thanks again

Anonymous said...

How much longer? until things implode at least,maybe forever.The political process in the U.S. is broken,FUBAR...decades,with luck.

Anonymous said...

Two minor comments:

Much health care is short tail, but not all. OB/GYN premiums, in particular, are disproportionately large because birth defects caused (or claimed) by reason of negligence in delivery can take 10+ years to manifest.

Is viagra as much of a gendered issue as it's made out to be? Putting aside comparisons to the pill (the denial of which I agree is silly), it strikes me that most viagra users are not tying one off, but using the drug with a partner. Without getting salacious, if you asked married women of a certain age, what gender benefit split would they ascribe to the availability of he drug?

Things to look forward to....

D

Anonymous said...

Your discussion of tails and the outcome distribution curve in healthcare vs CAT and reinsurance industries fails to consider that there are indeed fat tails when the scope of coverage, or in other words what constitutes 'basic care/coverage, inexorably expands due to innovation and/or government dictate. Doesn't tail risk increase when new procedures, techniques, stents, drugs, etc can cover previously untreatable and rare diseases and conditions? The increasing scope of coverage (with low co-payments for routine care that Americans expect - hey get Medicare to pay for a scooter with no cost to you!) coupled with the need to practice defensive medicine under the sword of litigation and frivolous lawsuits is a huge reason why the US spends as high of a share of GDP on medicine and why insurance premium inflation compounds at 6-8%. The shameless John Edwards in his trial attorney days going after hospitals, doctors, and insurance companies doing high risk, potentially innovative surgeries for conditions like Cerebral Palsy is a prime example of technology and knowledge introducing fat tails into a greater outcome distribution set, all the while under the duress of trial attorney litigiousness. Ask an OBGYN if there are fat tails in their outcome distribution set; my family knows one who is out of business because of a single (ultimately failed) lawsuit that put him out of practice because the malpractice insurance puts his overhead at unbearable levels.

Of course the "non-partisan, pragmatic" adherents of the current legislation fail to define what is basic care, why defensive medicine drives insurance premiums higher, and to limit the plaintiffs' bar. They have instead espoused another redistributive entitlement and somewhere strayed from the reform that the system needs, the reform necessary to "bend the cost curve", and the reform that most concerned health constituencies and any educated citizen agree the US needs. They fail to address obesity as a driver of healthcare costs, they WILL fail to fund this sufficiently with "cuts" in Medicare Plus reimbursements, they fail to raise the retirement age, they fail to introduce insurance interstate competition, they fail to address the excessive use of high-cost insurance plans because of tax distortions solely because union cronies don't want to pay their share, and they fail to explain why rationing by government is superior to the market. The last point is debatable, but you can't blame the USA body public for distrust of government healthcare when Medicare and Medicaid are 25 trillion in the hole.

Anonymous said...

Thanks. That was what I needed to read.

Gwailo said...

Excellent piece, cogently argued with clarity and style.

It is possible for an individual to consume an almost unlimited amount of medical services. Who would not appreciate having their own private clinic dedicated solely to prolonging their own life and fitness? So every society rations medical services somehow.

There are four basic ways to ration: by market, merit, lot and queue (i.e. bureaucratic allocation.) Both private and public insurance tend to shift the rationing decision ("no, you can't have it") away from market towards queue under the guise of merit.
"You can't afford it" is being superseded by "our guidelines don't allow it."

After all, who wants to tell a 92-year old woman that "keeping you alive for another six weeks just isn't worth the cost?"

'Gwailo

Jack Parsons said...

The inappropriateness of the risk insurance model is oddly never discussed.

In other insurance, demand exists when money is available. You buy car insurance when you can afford a car, house insurance when you can afford a house, etc.

Your demand for health care over your lifetime is mostly inverted from your ability to pay: demand is high from conception to maybe 5 years, plummets until your peak health at 19, slowly rises into your 40s/50s, then curves upwards. Your earning power is 0 until your late teens, slowly rises until 30/35 (men) and ?? (women), then gradually drops.

Given this inversion, health care insurance makes no sense. You can't pay when you need it, and when you can pay, you're fine.

Given America's tendencies towards intergenerational separation and political sociopathy (libertarianism), this makes it easy for young & middle-aged adults to not see the virtues of a financial model based on their full lifetimes.

scepticus said...

my god, what a superb rant. You are my hero.

Love your blog, intermittent though it is.

Anonymous said...

Given America's tendencies towards intergenerational separation and political sociopathy (libertarianism), this makes it easy for young & middle-aged adults to not see the virtues of a financial model based on their full lifetimes.

What we "political sociopaths" don't see is how handing the whole thing over to the government and _hoping_ they'll have the resources and expertise to keep it running amounts to a serious, long-term solution to the genuine issue you raise.

We've reached an interesting juncture when skepticism about the problem-solving abilities of government and a desire to let-alone-and-be-let-alone can be tarred with the disgusting ad hominem of "sociopathic."

Scepticus said...

from: Introduction to Sociopathy

These people tend to embrace a particular and often limited belief system to the exclusion of others. They have no doubts. Typically these belief systems have an internal logic. Actions based on the belief system often produces the desired and predicted outcomes. Their views do not stand up to criticism when alternative understandings are used. Views applicable to some activities in society may be given universal relevance and applied to activities where they are clearly inappropriate. These views or their application should not be acceptable to society but society frequently identifies uncritically with their logic and fails to challenge them.

Guy Thomas said...

Good discrimination is essentially predatory zero-sum behaviour

I go further than Cassandra: discrimination in voluntary insurance is often negative sum, even before considering externalities.

To give a flavour of the argument, ask yourself why 'adverse' selection is adverse? Why is it 'adverse' if those more likely to get sick are more likely to have insurance? From a societal viewpoint that seems a very satisfactory state of affairs, at least at first order.

And if you're thinking this falls down at second order (rising prices, death spiral, blah blah blah), no it doesn't, not necessarily. Miss E.P. may be a good writer, but she hasn't done the maths. Whereas I have...and my conclusion is that even ignoring externalities, insurance often works better with less accurate risk pricing.

Link to a short non-technical version...
Loss coverage: beneficial 'adverse' selection

And the full monte...

Loss coverage as a public policy objective for risk classification schemes
(Journal of Risk and Insurance, 2008)

Macro Man said...

Very good indeed.

While we may not always agree on politics, I think we can both share a laugh at the expense of people who a) have little to no experience of societies other than that of the US (though I do not believe this describes Miss EP) and b) who feel compelled to support a social contract forever fixed and immutable dating from 1787 (or, if you will, 1789.) They are only slightly less cringe-worthy than Biblical (Koranical? Talmudical?) literalists.

I will concur with the view that "Habitual reimbursement for regular, recurring costs is not insurance, people." Which is why some basic level of care should be offered by the state, and insurance should serve its intended purpose of covering catastrophic events/conditions. There's a reason my Cadillac (or is that Bentley?) insurance in the UK costs £2500 a year, rather than £25,000...

Finally, and I acknowledge Ms EP did not express this view, I have to laugh at people who denigrate foreign health care systems by sneering that "US consumers subsidize the rest of the world by paying higher prices for drugs", as a defense of the American health care status quo. How thick do you have to be to think that paying substantally more than the rest of the world is a GOOD thing?!?!?!?1

Anonymous said...

A lot of big words and ball room dancing here. Let's just say that entitlement programs usually lead to more entitlement programs, and those money distribution programs drain until dry.

Investment money flees entitlement companies, states and countries.

Look at all the housing built during Lyndon Johnsons Great Society welfare programs. All slums now.

That is where health care will be in 20 years.

"Cassandra" said...

thanks for the comments. I want to add the commenter who suggested the tails were not universally short is correct. And there is a some fatness out there too, but nothing like the comparisons to prop cat - at least not across the entire risk pool. And this is the key point. The risk is on the inflation side of costs for long-tail obligations, but even here, it's not one way. New treatments, cures might as likely reduce all in inflation-adj costs of that tail. I certainly don't know, but those with the data of the risk pool should (and do in places where the risk pool is unified).

The last Anonymous makes an important point that must be addressed (for it is the frequent criticism of all intervention) which is that: entitlement programs can lead to more entitlement programs.

The first this is that a single-payor is NOT an entitlement. A single-payor is perhaps an infringement on an individuals right to choose, because they are forced to be insured by a single entity (whether state-run, trust administered, or a concession granted to Walmart). This giving up a freedom is rewarded by a all the attendant benefits across the society and for the individual described above). The single payor is like a useful bridge - people perhaps make-do without it, but the life is vastly improved by its existence. The single payor is an insurance entity, that collects premiums - currently paid to disparate companies. Firms that purchase healthcare for their employees would continue to do so evolving into what is termed a social insurance charge that caps at the cost-basis of health coverage for the insured risk pool.

The entitlement portion is the "How the rest of society pays for the those that cannot pay" (the old the young the indigant, the unemployed and just the plain poor). We could of course let them get sick and die. But this is unnecessarily coarse and I trust this is not what you are proposing, or are you?

At present these people show up at hospitals and might get treated (at far greater cost to the taxpayer) but routine treatment or early intervention is far better than treating the emergency condition after. And this applies to so many aspects of healthcare that the ROI of such insurance extension where the taxpayer is already on the hook for emergency treatment is reasonably high.

But the best argument for that what you call entitlement is really investment: it frees up companies to do what they do best; it allows greater labor-market flexibility as someone can change jobs without worrying about chronic conditions of themselves or dependents and extension of coverage; it allows societies resources to be allocated to more productive pursuits; it improves the quality of life for everyone (truly - imagine how simple it could all be with a single insurance card, no more byzantine health claims; no more expansion of spend on administration vs. care). Now, you may have your beefs with what you see as generalized "give-aways", And judging by your comment, you;ve probably NEVER actually lived in a country with a proper-functioning health insurance system. But you'll need to do better than the existence of slums in american inner cities (the causes which are NOT the existence of a few public housing projects) to convince those who've spent much of their lives witnessing the benefits good-functioning of a proper healthcare system, that somehow, this is a negative to be feared...

IF healthcare IS there in 20 years, it will be for other reasons I think.

kabunushi said...

You cleaned EP-chan's clock, no doubt, thanks for the very well reasoned clarity with many important points! One thing i would add is that contra to the 'rational actuarial based risk pricing' argument, it's damn clear when they exclude folks for trivial preconditions AND also go balls to the wall to ex-post drop coverage after you get cancer because you did not report a hang-nail, the incentives to the insurers are just god-awful wrong. but that is just one of the very worst aspects of a terribly broken system.

And anybody who makes complex OR simplistic abstract arguments while ignoring all the emperical evidence from so many other countries, and the insane overall and spirialing even further out of control burden on us all is a damn fool. That of course includes those who with zero actual analysis of the overall %-wise cost of medical torts, malpractice insurance, defensive medicine insurance and with no idea what the alternatives are to the tort system for people who are severely injured by mistakes, insist that tort reform would fix everything, but the dems are getting so much $ from the trial lawyers that they won't accept the 'simple idea that solves everything'. The democrats are at least *trying* to fix the system rather than simply throwing BS against the wall.

At least EP-chan tried to make a coherent argument, as vacuous as it was. As the costs of our completely broken system are choking us to death the right is doing some combination of complete denial and resorting to idiological excuses for obstruction to even attempting to solve the mess, only adding to the cost spiral by giving away the drug benefits out of taxpayer account without paying a dime nor squeezing pharma to control the costs. And they have the nerve to scream 'socialized medicine'.

It's really disgusting that we are so broken but the republicans are doing nothing but play the issue. We do need to get some cost control into medicare, i am far from an expert, but it seems to me we do need to do some rationing and the huge near end of life expense is one clearly logical target for rationing with the least net human cost (at the most simplestic example, less care for infants and spending more on those in old age in their last 6 months of life is an obvious poor bargain in human cost/benefit averaged out over the population). But in lieu of attempting reasonable conversation we seem to be permanently doomed to demogiging and pandering medicare recipients.
If there is any way out of this political mess i sure don't see it.