Medicare, Medicaid and Subsidies

Reader Dan sends a letter (the link he provided no longer applies) in the WSJ:

Your page-one article “Note to Medicaid Patients: The Doctor Won’t See You,” July 19) provides a shocking commentary on the difference in attitudes and behavior to two populations, the elderly and the poor.

As the first chairman of the Secretary’s Medicaid Advisory Committee in the mid- and late-1960s, I can attest that these differences existed from the first days of Medicare and Medicaid.

Of course it is shocking to find the difference in payment — and treatment — for the two populations by the same government.

If $357.58, the amount paid by Medicare, is the “correct” payment for the treatment of a broken arm, then how can $184.51 be the correct payment for a Medicaid patient? Either Medicaid is underpaying or Medicare is overpaying. We all know which.

Even so, it is also shocking that so few physicians will see Medicaid patients given that these physicians were more than willing to accept and be the beneficiaries of the large subsidy by government to their medical education.

I would suggest that each person entering medical school be given a choice: Don’t take the subsidy (somewhere in the neighborhood of $150,000 to $200,000) and be free to choose your patients as you see fit, or accept the subsidy and in return agree to treat all patients who need your help. This isn’t involuntary servitude. In the words so dear to all, the prospective physician would be “free to choose.”

Rashi Fein|
Professor of the Economics of Medicine
Department of Social Medicine
Harvard Medical School

Since Dan doesn’t comment, I will. This is a phenomenom I’ve seen in a lot of industries. One can be a rugged individualist free-market type while getting all kinds of bennies from the government. Rugged individualist free-market views only conflict with others receiving bennies from the gubmint.