A Start on Health Care Reform
President Obama has shown both courage and sound judgment pressing for quick action on comprehensive health care reform, even in the midst of the country’s deep economic crisis. He has rightly stressed the urgency of reining in skyrocketing health care costs that are straining the budgets of families, businesses, and federal and state governments.
But his proposals, for all of their ambition, do not fully answer two central questions: how to cover tens of millions of uninsured Americans, and how to reform the health care system to reduce costs and improve the quality of care.
Mr. Obama has decided to let Congress thrash out the details of those issues, with the White House providing guidance along the way. Democratic leaders in Congress, many of whom are far more versed in the issues than the president is, will have to step up and fashion an effective bill. If they falter, Mr. Obama will need to step in with a clear vision and vigorous leadership.
To his credit, the president has tackled the first tough issue of how to pay for expanded coverage and systemic reforms. His budget has proposed huge expenditures — $634 billion over 10 years — as a down payment, and it clearly specifies where to find the money.
Half would come from raising taxes on the rich, another quarter from eliminating unjustified subsidies for private plans that participate in Medicare, and other big chunks from reducing payments to drug companies, hospitals and the home health care industry.
Yet even the administration admits that $634 billion will not be enough to reach universal coverage: some experts think it will take at least twice that amount.
The administration has also given no clue as to how it will significantly reduce the number of uninsured Americans — now 46 million and growing. The expanded children’s health insurance program, which Mr. Obama signed into law early last month, will cover more than four million uninsured children, and his stimulus bill will help millions more Americans retain or gain coverage. But this, too, is only a down payment on the problem.
The president’s main focus is on starting to reduce the soaring cost of health care. That, he argues, is a prerequisite to making universal coverage affordable and politically palatable. But in the meantime, many millions of uninsured Americans continue to go without adequate care. Congress will need to look hard at whether bigger strides can be made toward universal coverage at the same time that costs are addressed.
The president’s plans make a start toward reforming the health care delivery system, but it is only a start. His stimulus program is pouring money into electronic medical records, preventive care and comparative effectiveness studies of medical treatments — all of which should help improve care and possibly lower costs in the long run. His budget plan calls for Medicare to change its reimbursement rates for hospitals to promote higher quality, greater efficiency and substantial savings.
All told, the changes are projected to cut the growth rate in Medicare spending — from 7.3 percent a year to 6.1 percent in the fifth year. That looks like a modest reduction for now, but when compounded over many decades, it could greatly reduce projected Medicare expenditures by midcentury. Since Medicare policies often ripple through the entire health care system, overall health expenditures should slow.
Meanwhile, the administration has deliberately ducked some of the most contentious issues. There is no mention of requiring individuals to carry health insurance on themselves or their children. No mention of requiring employers to pay for coverage. No mention of having a public plan compete with private plans in a national insurance exchange. No discussion of whether employee health benefits should be taxed. No talk of requiring insurers to cover all applicants. No mention of government negotiating Medicare drug prices.
The White House has obviously decided that it is best to let Congress work out the compromises and decide how to allocate the pain. That is the opposite of the Clinton administration’s approach. It hatched a highly detailed plan in secret that never won Congressional support and crashed under a barrage of opposition from affected industries.
We do not challenge Mr. Obama’s political instincts. We simply note that someone will need to make the hard choices if health care reform and universal coverage are to succeed.