A new Medicare plan

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Summer is gone, official Washington is back and conservatives are gearing up to take more whacks at Medicare legislation based on the conviction that it needs to be undone for the sake of limited government. This is curious since the current Medicare bills reflect not only conservative principles, but replicates the political framework used to enact major changes in the government's role in housing, welfare and education. As Michael Barone wrote nearly a year ago, the administration's domestic policies on education, Medicare and Social Security have the common themes of allowing individuals more choices and subjecting them to more accountability.

To be sure, such shifts are accompanied by an increase in federal spending. But that is the political price that is often paid to give people more control over their future and often an increase is required to make the transition to greater freedom successful.

Why should Medicare be regarded any differently? Imagine if the next education bill increased spending by $40 billion but stipulated that the Edison Project would distribute it. Democrats would have a heart attack, the New York Times would editorialize against it and the education unions would be screaming. Butthat'swhatthe Medicare bill is doing by providing prescription drug coverage, not through the government but through private drug plans. And suppose the education bill gave students a voucher to choose among three private schools in their district. Again, another coronary. Yet, that is the sort of choice the Bush administration is trying to fashion for seniors who do not want to stay in the traditional Medicare program: three private plans that include drug coverage, that can add new technologies without the delays normally associated with traditional Medicare, that can pass savings on to consumers.

Thus, conservatives have an historic opportunity to begin to change the course and character of Medicare. Democrats and liberal senior groups see it that way, why don't conservatives? Many conservatives want to kill this bill because it doesn't allow seniors the same choice of health plans members of Congress have or because the drug benefit will bankrupt Medicare. On the first point, conservatives don't have the votes to convert Medicare into a marketplace of medical plans overnight. It will take years of solid management, oversight and continuous improvements on this year's proposal to move forward.

Conservatives can rightly claim the private sector choices in the bill are a compromise, a pilot project, that sits between doing nothing and full scale market transformation. Liberals have expanded the welfare state through such incremental efforts over the past decades. If conservatives careaboutpromoting choice and freedom in health care, they are going to have to build support for their initiatives in the same fashion.

Secondly, Medicare will go bankrupt with or without a drug benefit without more fundamental changes to the program. But since every shred of evidence suggests that new drug consumption in the private sector helps reduce the cost of disease -- whereas increased government drug spending with rationing and price controls seem to have the opposite effect -- conservatives should use the drug benefit as a tool to control costs and to encourage a shift toward the sort of whole-patient care that the more enlightened private plans can offer. Not only is the extra money the price paid to liberate seniors from the price-fixing framework of Medicare and a safeguard against liberal proposals to actually add more people to the program. The additional spending on medicines, like that spent on social services in welfare reform and education in the No Child Left Behind Act, should be used to promote choice and accountability.

The fight for greater choice in education and greater accountability in welfare took decades. The battle to dislodge government from health care will take as long. Yet, conservatives are treating Medicare as a one-shot seminar subject for scoring rhetorical points. To paraphrase the great political philosopher Marx (Groucho, not Karl) in Washington, apart from the sound of one's own voice, there is no sweeter sound than the crumbling of your fellow man. This axiom more than any characterizes the zeitgeist of the conservative movement regarding the current debate on Medicare. If we don't change our tune, we lose. So do the American people.

Robert Goldberg is director of the Manhattan Institute's CenterforMedical Progress.