Price Controls Fail Medicare

Policymakers have responded to Medicareâ??s rising costs by imposing price controls on providers, a strategy that hasnâ??t solved the programâ??s underlying problems. Indeed, doctors and hospitals responded to price controls by increasing their volume of services, or providing more heavily reimbursed services. Real Medicare reform should start with a premium-support program for seniors based on the successful competitive-bidding programs now used by Medicare Part D and the Federal Employees Health Benefits Program.