According to The Washington Post, Donald Berwick, the CMS Administrator, is resigning his post.  President Obama nominated the controversial nominee to the post in 2010. In the lead up to the mid-term elections, Democrats on the Senate Finance Committee - unwilling to have all of Berwick's controversial statements about the need for rationing - refused to schedule a hearing  on the nomination. President Obama recess-appointed Berwick to the post. He announced he was stepping down a month before his recess appointment was scheduled to end.

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The Atlantic has an interesting article about Netflix and marginal costs. What does that have to do with healthcare? The author buried a little nugget in there that is instructive about why liberals ideas about health care policy will not work in the long run and will jeopardize innovation as well.  She writes:

"You can get a sweet deal if you are the customer who gets marginal cost pricing. Medicare does this--reimburses hospitals at above their marginal cost, but below their average cost, so that private insurers have to pick up most of the hospital overhead. European countries do this with prescription drugs: reimburse above the marginal cost of producing the pills, but below the total cost of developing the pills, so that the US has to pick up most of the tab for drug development. The problem is that as voters and as customers, we often get the notion that this can be extrapolated to everyone. So liberal policy wonks want to save money by putting everyone on Medicare, or some equivalent program that uses the government's monopsony pricing power to get lower prices for everyone.... But everyone cannot be the marginal cost consumer. Someone has to cover things like development costs." 

The bottom line is that ObamaCare tries to lower costs through price controls and by restricting access to care. In the end this will reduce choices, drive doctors from their chosen profession, and retard research and development in the field of health care. The implications for patients will be disastrous.

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Earlier this week, David Frum wrote an article in which he essentially urged the GOP to accept ObamaCare but with some minor tweaks. Michael Cannon with The Cato Institute has deconstructed Frum's article to explain why Frum's idea is not just bad policy but completely unworkable and that it simply can't be fixed.

Cannon sums up Frum's "plan" as follows: "Frum’s GOP-palatable alternative to ObamaCare is … ObamaCare. But maybe more coercive. And implemented sooner. With higher taxes. And less vulnerable to legal challenges. And with Republicans playing the bad guy."  AHEC's applauds Cannon's insight into the issue.

You can read Cannon's full article here.

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