Why Medicare Recipients Shouldn't Have More Skin in the Game

Today’s Managing Health Care Costs Indicator is 16.2%

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I recommend a column by Drew Altman of the Kaiser Family Foundation, who points out that on the average Medicare beneficiaries spend 16.2% of their income on health care.  That’s on top of the federal funding for Medicare. 

There’s a lot of conversation in the policy world about how patients with inadequate “skin in the game” might demand low value services. Such patients want too much because they are paying for these low value services out of the public trough, a classic problem of moral hazard. 

However, almost half of all Medicare beneficiaries have income at or below 200% of the federal poverty level. Therefore, increasing out of pocket costs substantially would be likely to price many elderly Medicare recipients out of health care.

We all know that we deliver many health care services in this country that are of low value (like ordering tests that are unlikely to inform a clinical decision) , or even value destroying (such as performing unnecessary procedures that have some risk).   We might be pressing too hard on increasing patient liability, and we are not going to ‘solve’ the problem of low value services without addressing the provider side of this equation.