Gruber: Yeah, that’s a great question. And I think that, ultimately, it’s providers. First of all, if I was the health-care czar, I wouldn’t just pay what Europe pays. I would do a study of what’s the value of a hip replacement, and I’d pay according to that study. Answer one. Answer two is, who’s going to scream? It’s going to be providers, in particular the specialists and the hospitals. And let me tell you a story that illustrates that, Derek. If you get a shot, a drug injected at the doctor—not one you buy at the pharmacy, but an injectable drug, like for cancer, at the doctor—the way the government reimburses you under Medicare, that’s our universal coverage for the elderly, is the doctor gets paid 7.5 percent of the cost of the drug.
So if I give you a shot, Derek, that costs $100, I get $7.50. If I give you a shot that costs $1,000, same effort, same risk of carpal tunnel, I get $75. That’s stupid. That makes no sense. So 20 senators wrote a letter to President Obama saying, “Look, the system’s broken, we should fix it.” So President Obama and his advisers came up with a new system where doctors would largely be paid a flat amount per shot. Budget neutral. We paid the same amount of money to doctors in total, but you get a flat amount per shot. Shortly thereafter, 80 senators, including most of the original 20, wrote a letter to him saying, “How dare you propose this radical revitalization American health care? You must stop this at once. It’s socialism.”
What happened? Well, the oncologists, the cancer doctors, are the ones that give the $1,000 shots, and they got upset and they lobbied. That is the challenge, Derek.
Why American Health Care Is a “Broken System”
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