Sunday, July 3, 2011

The Future of Medicare

I count myself a long time admirer of the work of medical ethicist Daniel Callahan. For many years, he has been a voice of sanity and wisdom about the need to allocate our medical funding more judiciously and fairly. I am therefore reluctant to say that his comments in the Sunday Review's "Sunday Dialogue" strike me as just off enough to distort a serious issue: how to fund Medicare in the coming decades.

His 80-year-old, self-sacrificing tone, "our duty is more to those coming after us than to ourselves," sounds reasonable, but, ironically, it is too self-absorbed to be helpful. When he says that the death of people his age is "no social tragedy," I personally identify with this view, while severely doubting whether other 80-year-olds and their families will necessarily concur. In any case, I am skeptical whether this kind of abstract sacrificing of oneself to the next generation is even necessary, given what we know about the economics of medical care.

Of course, Medicare is wasteful in some of the ways Callahan identifies. Overuse of expensive technology and excessively high expenditures on drugs that extend life for only a few months are at the top of this list. The recent stories about Medicare agreeing to fund drugs like Provenge and Avastin are certainly part of the problem and may be what Callahan is particularly concerned about.

His far more radical and I think misguided view, though, is that we should not be too concerned about promoting the health and well being of older people who have, as he puts it, lived a "full life," which he defines as reaching somewhere between 75-80 years old. He especially is concerned that the current level of Medicare cannot be maintained, something about which he is almost certainly correct, and that this must be balanced against the ability of younger people to live a sustainable life. Here, I think he is far more alarmist than necessary, given that young people appear to be flourishing in EU countries where the tax burden is much higher than here and given that the amount of taxes needed to grow Medicare at a reasonable rate need not be that great.

In fact, let's get specific here. Medicare costs ordinary folks about 1.5% of their income each year. For someone making $50,000, that's $750. A lot but hardly a crushing burden. Increasing that by, say, 50% to 2.25% of income, especially on incomes over, say, $50,000 is very doable. That would mean that a person making $75,000 a year would see his tax burden for Medicare go from about $1125 a year to around $1875. Sure, it's a fairly steep increase, but I don't think it is life altering, whereas dramatic losses in Medicare funding could be.

In any case, this little analysis as inexact as it may be should remind us that the kind of glittering generalities Callahan employs in his Sunday Dialogue really don't help with serious problems very much. We need specifics about the amount of sacrifice involved and the degree to which medical costs can be reasonably cut. What we don't need is a framework that makes a leap to pitting young people against old, particularly when many of the solutions to our problems, such as implementing a relatively modest increase in taxes, are not nearly as challenging as they may at first appear.

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