A Way to Fix Medicare

Published in the New York Times -- April 26, 2002

To the Editor:

Re "Wealth vs. Health," by Paul Krugman (column, April 19): Medicare's problems could be solved if we asked the rich elderly to pay more for their health care.

The problem is not the system's lack of money but its role as third-party payer. It cannot judge the validity of claims, so it reduces payment or limits covered procedures. That forces doctors to see more patients, and forces patients to pay for services that are not covered.

Since every procedure's price is fixed, there is no competition. But a deductible set as a percentage of income could encourage patients to better manage their care, while protecting the needy. Reimbursements could be raised, restoring viability to the trust fund and bringing better services to all.

Allan Ostergren
White Plains, NY

The writer is senior research associate at the Institute for SocioEconomic Studies.