Controlling the Cost of Health Care
I haven't had very much to say about the current health reform fight in Congress - it is neither my top priority (that would be climate change) nor an issue about which I am overly informed. Given, however, the issue's current prominence in the national debate and its importance to another pet cause of mine (fiscal sanity), I feel compelled to offer a few thoughts regarding the spiraling cost of health care.
My position is basically this. I don't really care what the actual reform is - single-payer, expansion of the current employer system, health co-ops, etc.* - as long as it accomplishes these four goals: if it gets insurance for at least thirty million of the 47 million uninsured Americans, if it improves insurance for the fifty million or so Americans with bad insurance, if it is paid for, and if it brings skyrocketing costs under control, I will support it.
Unfortunately, we learned yesterday that while each of the plans currently under consideration in Congress would accomplish the first three of these four goals, none would bring skyrocketing health care costs under control. What are these costs? For starters, if you think the current deficit is bad wait until you see what Medicare and Medicaid will cost in just a few short decades. In May, Medicare trustees announced that Medicare will be insolvent by 2018, two years earlier than expected. According to the New York Times, "The trustees predict that average Medicare spending per beneficiary will increase more than 50 percent, to $17,000 in 2018, from $11,000 last year." Per the non-partisan Congressional Budget Office (CBO), overall health care spending as a percentage of the GDP is even worse: "Over the past 30 years, total national spending on health care has more than doubled as a share of GDP. Under the assumptions described above, according to CBO’s projections, that share will double again by 2035, to 31 percent of GDP." In other words, over the next three decades, U.S. health care expenditures will grow from one in every six dollars spent to one in every three.
Unfortunately, Congress, in typical fashion, is focused on the short term rather than the long term. House liberals just unveiled a plan that they would pay for by slightly raising taxes on the rich. The Senate Finance Committee (disclaimer: I used to intern for Chairman Max Baucus) is exploring a number of different ways to pay for their plan, including ending the $200 billion subsidy we call the employer-sponsored insurance tax exemption. All of these proposals would expand health coverage and pay for the expansion, but yesterday, CBO director Doug Elmendorf informed Congress that none would actually lower costs.
Elmendorf is right, expanding health coverage isn't enough. Here are five ideas I’ve heard for changing the actual care, not just the method of insurance. Two frequently-discussed ways of lowering the cost of prescription drugs are making Medicare competitive and allowing purchases in Canada. According to a speech New York Times economics reporter David Leonhardt gave at Dartmouth in February, two other ways to lower costs include digitizing health care records (a frequently discussed option) and accepting less flashy treatment. We must remember, he says, that new and experimental options aren’t always better than tried and true methods; that surgery is not always superior to treatment; and that sound diagnoses do not always require dozens of tests and procedures. Finally, in the upcoming New York Times Magazine, Princeton professor of bioethics Peter Singer argues that while politically untenable, rationing health care may also be a necessary part of bringing costs under control.
White the possible exception of rationing, I cannot for the life of me understand why Congress is not embracing these ideas as part of its discussion on health reform. The status quo might make more money for hospitals, insurance agencies, and pharmaceutical companies, but that does not mean it provides the best care for patients or the most affordable care for a nation in dire fiscal straits. When health comes before profit, then we will finally have an affordable, healthy, and ethical health care system.
*If the jargon surrounding different forms of health care is as Greek to you as it is to me, check out this helpful article from Salon.com, "Healthcare for dunces".