Where Is Health Care Reform Going?

Conflict over health care reform, between Republicans and Democrats, and within the Democratic Party itself, make it less likely that an effective program will be enacted in the near future.

 

In addition, the proposals being considered and that have engendered the fighting, all fail in terms of what might be deemed the most important aspect of reform- getting escalating costs under control. While universal coverage is an important goal, runaway spending on health care is a major threat to the American economy with a potentially disastrous impact if it is not quickly addressed. Whether there is a public option for health insurance or an “insurance cooperative” to provide coverage, does not matter if serious cost constraints are not included as part of any legislation.

 

The Republicans have not offered any realistic ideas to date to control escalating costs. Thus far, the Democrats have offered pie in the sky, saying that electronic health records and preventive care will produce significant savings. (Though they may improve care, potential savings are far in the future.) Use of a Medicare Advisory Board to cull major savings from Medicare and Medicaid (MedPAC) is also not an answer, as it would likely have to cut flesh rather than fat from these programs in order to deliver the sums that are needed. Taxing the wealthy to find enough money to fund reform is not a course many politicians are eager to embrace.

 

There is however, a fiscally responsible way to shape health care reform; a path that would not require any new government spending or increase in taxes, and that would not add to the budget deficit or national debt. Though this may sound impossible, an appropriate program could be implemented if Congress were willing to take on the health care system’s stakeholders, particularly the insurance industry, organized medicine and the trial lawyers. This would likely entail bloody, hand-to-hand combat, or worse, which is why politicians have been reluctant to go this route.

 

Administrative costs are estimated to consume 15% to 25% of health care spending- $500 billion at 20%. The Congressional Budget Office projected unnecessary medical care at about 30% of health care expenditures, or up to $830 billion. Even if these figures are off by 10% or 15%, there is a huge amount of money within the health care system that can be harvested to fund universal coverage and a reform program. It will take strong grass roots pressure and political courage from Washington legislators to enact a plan that antagonizes the stakeholders by reducing their payout, but it is the fiscally responsible way to go. Our children and grandchildren would benefit greatly from this course of action.

   

Comments

[Jan Mashman, M.D.]

Dr. Levine,

Your book is outstanding and needs to be widely read, as it clarifies issues of health care reform that the public does not understand.

As you point out in your book, there are two factors that make up 40% of the health care dollars spent:
1. unnecessary care (complicated issues)
2. administrative costs of insurance companies (unbridled greed without adding value to the system).

If these two problems were dealt with, there would be enough money to care for all Americans without any extra funding being necessary.

The public does not understand what the "public option" is and how important it is in curbing the cost of health care expendatures.

If cognitive physicians (primary care doctors and physicians who do not do proceedures or surgery) were paid a more reasonable wage, they would not have to act like entrepreneurs, driving up the health care costs. The entire health care system has built an infrastructure incentivised to encourage all providers (doctors, hospitals, homecare companies, pharmaceutical companies,nuring homes, etc) to do more of what they have been designed to do. It needs to be redesigned in such a way that they do the right thing rather than the profitable thing.

Your book more clearly outlined these issues than any voice I have heard to date. I think all legislators and the public need to read it. I am concerned that if the legislators proceed with public policy without understanding all the facts, we will be saddled with health care reform which will not work and is doomed to fail.