December 14, 2009

IT REQUIRES A RATHER SIMPLE REFORM...:

A savings mirage on health care (Robert J. Samuelson, December 14, 2009, Washington Post)

In 2009, national health spending will total an estimated $2.5 trillion, or 17.7 percent of gross domestic product. By 2019, it's projected to rise to $4.67 trillion under present policies, or 22.1 percent of GDP. With CAP's "savings," it rises a little less sharply to $4.49 trillion, or 21.3 percent of GDP, according to Harvard economist David Cutler, the study's co-author, who provided these figures. Similarly, family health insurance premiums rise from 19 percent of median family income in 2009 to 25 percent in 2019 under present policies and 23 percent with CAP's "savings." The point is simple: Even with highly optimistic assumptions, health spending remains out of control. It absorbs more of government, business and family budgets. Higher health spending would put pressure on future budget deficits, already projected to total about $9 trillion over the next decade. If new taxes and Medicare "savings" are real, they could be used exclusively to pay down deficits, not finance new spending.

But many may not be real. Writing in the Wall Street Journal, Dr. Jeffrey Flier, dean of the Harvard Medical School, gave the various health bills a "failing grade" and said they wouldn't "control the growth of costs or raise the quality of care." Quoted in Newsweek, Dr. Delos Cosgrove, head of the Cleveland Clinic, said much the same. Richard Foster, the chief actuary of the federal Centers for Medicare & Medicaid Services, doubts the cost-saving provisions touted by CAP would save much money. He's also skeptical that Congress, facing complaints from hospitals and a squeeze on services, would allow all the Medicare reimbursement cuts to take effect. True, Congress has permitted some reimbursement reductions to occur, but it has repeatedly blocked the Sustainable Growth Rate adjustment for doctors, which most resembles the new proposals.

Health cost increases might spontaneously recede, but history suggests skepticism. The relentless advances reflect an open-ended insurance and delivery system that gives neither patients nor providers any reason to restrain spending. To attack costs first would be politically challenging. It would require admitting that all good things are not possible simultaneously and that the uninsured already receive much medical care. It would require genuine bipartisanship, not just a scramble for a few Republican votes. And it would require stronger measures to dismantle a fee-for-service delivery system that now rewards more, not better, care. That's a demanding and realistic approach; Obama's is wishful thinking.


...one that forces people to take money out of their own pockets to pay for health products and services.

Posted by Orrin Judd at December 14, 2009 7:03 AM
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