"There is a major flaw in the Medicare bill that has not been discussed, or, more accurately, an important omission: protecting physicians from the antitrust laws. If the bill's scheme of having Medicare 'compete' with private health plans takes off, it will provide a strong incentive to antitrust regulators to expand their current policy of prosecuting physicians that attempt to jointly contract with such plans. After all, we can't have doctors raising costs through 'anticompetitive' means, can we?

"The Medicare bill does target physician-owned specialty hospitals with an 18-month moratorium. These hospitals often provide better services for patients, since the specialist-owners are freed from much of the red tape associated with larger hospitals. But the community hospitals lobbied intensely to punish specialty hospitals in the bill. The argument is reminscent of the anti school voucher argument: specialty hospitals skim the high-reimbursement cases off the top, leaving only the low-reimbursement patients for the larger hospitals. Better to make all patients suffer the same level of mediocrity than allow some patients (and their doctors) to be better off.

"Finally, the bill supposedly encourages the development of preferred-provider organizations. But the FTC and DOJ have spent the past two years trying to punish such networks under the antitrust laws, at least those networks that have 'too many' doctors in the government's view. In North Carolina, the DOJ forcibly dissolved (without a trial) Mountain Health Care, one of the largest PPOs in North Carolina. To date, the DOJ has never disclosed a single piece of evidence demonstrating Mountain's alleged antitrust crimes. I'm currently appealing the case to the Fourth Circuit to compel document disclosure under federal law."

"Meanwhile, the bill prohibits Medicare from using its bargaining power to cut drug prices; drug company stocks have soared since the bill's details became public."

From reader Jameson Campaigne:

"Can't Krugman even read the stock charts?"

One presumes not:

"...private companies have much higher overhead than Medicare...

"...Mr. Gingrich has long advocated turning the administration of Medicare over to private companies...

"...drug company stocks have soared since the bill's details became public.

"...AARP has become much more than an advocacy and service organization for older Americans. It receives more than $150 million each year in commissions on insurance, mutual funds and prescription drugs sold to its members."

I would have thought that AARP would be beyond Krugman's reproach, since it is not-for-profit (i.e., not-for-evil). And that $150 million is revenue, not profit, anyway. But it turns out there's an overriding axiom (make that an overriding prejudice). Democrats are good, Republicans are evil.

Posted by Donald L. Luskin at 1:48 AM | link    

Thursday, November 20, 2003

Posted by Donald L. Luskin at 8:50 AM | link    

Wednesday, November 19, 2003

Posted by Donald L. Luskin at 5:15 PM | link    

Tuesday, November 18, 2003