It seems the Representative Paul Ryan has been in the news a lot lately.  I had the opportunity to catch one of his interviews recently and in those few, stolen minutes heard a lot of things I liked - enough to download a copy of his roadmap.  Over the last couple evenings I took some time to read it in more detail and I am impressed.

What impresses me the most is that it truly is a roadmap.  In other words, he just doesn’t say we need to fix healthcare or lower our debt, he actually has a well thought out plan for how to get from where we are today to where he is proposing.  This is in stark contrast to the ‘feel good’ sound bites we get from so many of our current, elected leaders today.

Two great examples where he provides a solid, concrete path forward is with Medicare and Social Security reform.  Both entitlements are in trouble financially and clearly are on an unsustainable path.   What makes them particularly difficult to fix is that so many Americans are in position where they are counting on the benefits already promised to them in those programs.  What Rep. Ryan proposes is that we guarantee the benefits in both cases for those individuals who are already 55 years or older but for those under 55 changes are necessary – and he outlines what those changes would be.  He doesn’t blow up either system but gradually puts them back on track and in a way that future generations can adjust to what those changes will be before they also have to rely on them.  As someone well shy of 55, I never have believed those programs would be solvent by time I was old enough to qualify them and think many people in my generation have been planning for their retirement with that in mind anyway  The changes proposes by Rep. Ryan would only be a pleasant surprise to those of us who never planned on receiving anything.

The “Roadmap for America’s Future 2.0” is about a 100 page document and I’m not going to do it justice to try and summarize it here.  I would recommend though that you check out the website and at least read the opening summary.  Representative Ryan’s plan is well thought out, available for public review, and bold reminder that the President just isn’t being honest when he says the Republicans aren’t bringing alternatives to the table.

I was recently taken to task as to why tort reform is more important to healthcare reform debate than public transit options, or, as I was corrected, just getting people out of their cars.  I am not going to rehash the public transit portion of that discussion – an informed reader can make their own judgment as to the relevancy of that – but in the course of that discussion an interesting Congressional Budget Office (CBO) report on tort reform came to my attention.

As way of background, tort law deals with resolving damages from injury arising from negligence or other wrongful acts.  In the context of healthcare, this could be a physician who is accussed of injuring a patient under their care in some way that is considered negligent.   Tort reform refers to legislation that would seek to put limits and additional rules around the types of lawsuits that could be brought in those situations as well as the amount of compensation that could be won.

According to this specific CBO report, the CBO found that if the most common reforms were enacted, this would result in about $11 billion in savings.  Not the silver bullet to our problem but it would help.  However, what I found more fascinating was that it would also save an additional $41 billion from the federal budget over the next 10 years because it would reduce spending in Medicare and other government-run healthcare plans.   The reason?  The CBO says:

“One possible explanation for that disparity is that the bulk of Medicare’s spending is on a fee-for-service basis, whereas most private health care spending occurs through plans that manage care to some degree.  Such plans limit the use of services that have marginal or no benefit to the patients (some of which might otherwise be provided as “defensive” medicine); in that way, plans control costs and keep premiums lower than they otherwise would be.”

Essentially, government run health care plans spend money on healthcare as it's delivered whether it's needed or not - folks get paid for the more procedures performed period.  Private plans on the other hand need evaluate the cost versus the effectiveness and provide quality care within a budget.    The first approach could work if you have unlimited money and unlimited resources (which we have neither of) and the second approach works by rewarding effective healthcare.  Food for thought when we debate whether or not the solution to out-of-control healthcare costs is based fundamentally around private insurance or government.