As might be expected, thecurrent council of economic advisors has zero appetite for radicalchange when it comes to health care policy. (Photo:Shutterstock)

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Well, the suspense is over: the Trump White House is not a fanof Medicare for All.

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The recently released annual report by the White House Council ofEconomic Advisers goes to some length to argue that aMedicare-for-All reform, a concept promoted by several Democratic candidates for president, isa bad idea for the country.

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The report explains why a universal health care system more linewith the model of Democratic Socialist countries such as Denmark orNorway will not work in the U.S. But the report is not all negativeabout health care policy: it talks up the Trump administration'srepeal of the individual mandate and other efforts to expandchoice and cut costs for health care consumers.

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Reporting on a strong economy

The annual report is really not much different than reports fromprevious years and previous administrations: it touts the successesof the current administration and promotes policies that theadministration favors. So this year's report ticks off the goodnews: GDP growth of 3.2 percent; a decline in the unemployment ratedown to 3.7 percent; and an average of 223,000 jobs added per monthfor 2018.

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The report argues that these good numbers are a result of theTrump administration's emphasis on free markets: “A unifying themethroughout this report is that these conditions are generallyachieved by providing maximum scope for the efficiency of freeenterprise and competitive market mechanisms,” the report said.

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Sticking with the devil you know

As might be expected, the current council of economic advisorshas zero appetite for radical change when it comes to health carepolicy. Like much of the health care industry itself, thereport sees Medicare for All proposals as an embrace of socializedmedicine, threatening a massive disruption that would harmstakeholders and patients alike.

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“These proposals, though well-intentioned, mandate a decrease orelimination of choice and competition,” the report says of thecurrent Medicare for All plans. “We find that these proposals wouldbe inefficiently costly and would likely reduce, as opposed toincrease, the U.S. population's health. We show that funding themwould create large distortions in the economy. Finally, we arguethat the universal nature of 'Medicare for All' would be aparticularly inefficient and untargeted way to serve lower- andmiddle-income people.”

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A good part of the health care section of the report is ratheracademic: price elasticity, information asymmetry, and the problemof moral hazard are discussed. But the authors also note some hardnumbers; for example they show that the average life expectancy ofcancer patients is higher in the U.S. than with European Unioncountries, which have varying degrees of socialized medicine.

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The report also talks about waiting times for procedures andappointments—although some socialized medicine countries actuallyperform better or roughly the same as the U.S. with these measures,most do not. And it makes the case that Medicare for Allwould actually harm seniors in the U.S. by reducing patientchoice.

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“The current Medicare system, which mixes public and privateelements—including competition between hundreds of MedicareAdvantage plans and between hundreds of Medicare Part D drug plansand public and private financing—is superior to foreign,single-payer systems,” the report say, citing data that showssignificantly shorter wait times for U.S. seniors in seeing aspecialist.

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There are, of course, other studies that show socializedmedicine countries delivering health care with better outcomes thanin the U.S. at much lower cost—but the report does identify a realproblem: how to get to a better system without creating an economictrain wreck. The Trump advisers' preference for more market-drivensolutions is understandably more in line with President Trump'sworldview than that of Bernie Sanders.

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Deregulation as health reform

The report also talks up the current administration's efforts toimprove choice and competition in health care markets, mainly byeasing regulations. The administration's removal of the individualmandate fee as part of tax reform is one example of this. Thereport said that this move will help higher-income Americans whofaced very high premiums under the ACA, and argues that eventuallythe move will benefit the U.S. economy overall.

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The report also talks up associated health plans and short-terminsurance as two market-driven innovations that will give consumersmore insurance options at a lower cost. These ideas have been givenregulatory relief under the Trump administration, allowingemployers and insurance carriers room to experiment with theconcepts. The report estimates that billions in health carespending could be saved through wider adoption of these ideas.

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