The Pointless Debate Over "Efficiency" of Government-Run vs. Private Health Insurance 
By Jeff Lemieux
May 12, 2003

New testimony from the Progressive Policy Institute (PPI) describes the intellectual food fight between Marilyn Moon of the Urban Institute and Joe Antos of the American Enterprise Institute over which is better for Medicare, government-run health insurance or private health insurance, as equivalent to debating the merits of McDonalds vs. Burger King.

Excerpts:  "Our great foundations and policy institutes and scholars could do the most accurate and subtle calculations, but they could never definitively determine whether McDonald's was better than Burger King, or if the Beatles were better than the Rolling Stones, or, for that matter, whether fat guys really drink Lite beer because it 'tastes great' or is 'less filling.'

For policymaking, comparisons of long-term spending trends between Medicare and private health insurance cannot possibly settle a debate over which sector is a better value.  That is because trends in Medicare and private health insurance spending are interrelated.  When Medicare finds ways to save money and add value, private insurers face pressure from employers to mimic those efficiencies or find alternative savings.  When private health insurers find ways to save money or add benefits and value, Congress faces pressure from the public to enact similar cost savings or benefit enhancements in Medicare.  Spending trends reflect those pressures -- they tell us nothing about anything intrinsic to either government-run or private health insurance."

Links:
Progressive Policy Institute McDonald's v. Burger King:  A "Nothing Burger" Debate on Medicare Reform Testimony before the Senate Special Committee on Aging (May 6, 2003).

Cristina Boccuti and Marilyn Moon, "Comparing Medicare and Private Insurers: Growth Rates in Spending Over Three Decades," Health Affairs, March/April 2003, www.healthaffairs.org.

Joseph R. Antos, with Alfredo Goyburu, "Comparing Medicare and Private Health Insurance Spending," The Heritage Foundation, www.heritage.org.