Better Price Controls Still Not the Answer

Published March 16, 2015

Apparently the ‘better’ price controls proposed by Medicare to deal with the problem of hospitals hanging on to patients just long enough for higher reimbursement rates to kick in aren’t going to be good enough. From this morning’s Wall Street Journal:

Medicare Panel Faults Payment Fix as Too Weak

A planned overhaul of Medicare payments to long-term hospitals doesn’t go far enough, a congressional advisory panel said, and it called for further changes to discourage timing patients’ discharges to financial incentives.

Long-term-care hospitals get smaller payments for short visits, but after patients stay for a certain number of days the payments jump to much larger lump sums.

That gives the hospitals “a strong financial incentive to keep patients” until they qualify for higher payments, “and they appear to respond to that incentive,” the Medicare Payment Advisory Commission, called MedPAC, said in a report Friday…

Will someone please send the people on these panels and commissions a copy of Forty Centuries of Wage & Price Controls: How Not to Fight Inflation? It would save them a lot of grief, and the rest of us as well.