Health Care Costs..Unspoken, Ignored

It is hard to balance the current controversy over SCHIP with the broader and looming catastrophe of rising health care costs for the general population. Intel's CEO, Craig Barrett summarized this broader question in his September, 26 speech to the eHealth Initiative. In it he said:

If you look at the annual health care cost increase compared to a couple of other metrics, the War in Iraq, and basically the average cost increase to the economy due to petroleum price increase, you see that health care spending in the U.S. is 2X those other two topics.

This conservative and pragmatic approach has been echoed across the political spectrum. Consider two recent editorials in the New York Times. The most recent was a response to the recent attempt by General Motors and the United Auto Workers to reach a compromise on this vexing problem. An editorial from less than two weeks earlier addressed the positions of the political candidates on health care

NY Times
G.M.’s Health Care Fix
Published: October 7, 2007

Unfortunately, this deal does nothing to restrain the underlying escalation of medical costs driving the problem. It simply shifts responsibility for administering insurance coverage from the company to the trust. Some experts hope that the union, once it is in charge of health coverage, will eventually restructure its benefit package to give retirees an incentive to economize on care. The trick would be to reduce waste and overuse without curtailing needed services.

NY Times
EDITORIAL; The Battle Over Health Care
Published: September 23, 2007

What's Missing
All of the plans, both Republican and Democratic, fail to provide a plausible solution to the problem that has driven health care reform to the fore as a political issue: the inexorably rising costs that drive up insurance rates and force employers to cut back on coverage or charge higher premiums. All of the plans acknowledge the need to restrain costs, but most of the remedies they offer are not likely to do much.

Electronic medical records to eliminate errors and increase efficiency, more preventive care to head off serious diseases, and better coordination of patients suffering multiple, chronic illnesses are all worthy proposals, but there is scant evidence they will reduce costs. Proposals to import drugs from abroad, allow Medicare to negotiate drug prices, restrain malpractice expenses, increase competition among health plans, and empower consumers to shop more wisely for medical care might help a bit. But many experts doubt that any of this will truly put the brakes on escalating health care costs.

No top candidate in either party has broached more drastic remedies, like limiting the use of expensive new technologies, cutting reimbursements to doctors and hospitals, or forcing people to use health maintenance organizations. And no one has suggested imposing higher taxes on everyone, not just the wealthy, to finance universal coverage. These solutions are not even discussed on the campaign trail lest they alienate voters and interest groups.Who will act?

What is to be done?

Part of the challenge lies in an honest assessment of the enormity of the challenge. In this regard, Representative Jim Cooper - a champion of transparency - has offered a plan before the House entitled "Securing America's Future Economy Commission (SAFE) Act." According to a recent article in the [Nashville] Tennessean, this act "would establish a 16-member bipartisan commission that would propose legislation to deal with the shortfall for social programs, the high level of foreign investment in the U.S. and other fiscal issues.
Legislation offered by the commission could only be voted up or down by Congress without any changes. This approach has been used successfully to deal with the closing of U.S. military bases."

"'Partisanship on this issue is as foolish as a food fight on the Titanic,' said Cooper, a Nashville Democrat who was joined by co-sponsor Republican Rep. Frank Wolf of Virginia. Eleven House members, including Rep. Lincoln Davis, D-Pall Mall, are original co-sponsors of the legislation."

A second and equally vital component is to add elevate awareness of these costs to those who are incurring costs beyond our means - in other words, all of us alive today. In a sense, we are passing on our irresolution and denial to future generations. Short of an economic catastrophe or widespread social unrest from internal or external events, Americans seem to learn their lessons the hard way.

This brings us full-circle to the present approach to health care.

Let's look at what the President has said about the uninsured in a July 10 visit to Cleveland, Ohio:

Let me talk about health care, since it's fresh on my mind. The objective has got to be to make sure America is the best place in the world to get health care, that we're the most innovative country, that we encourage doctors to stay in practice, that we are robust in the funding of research, and that patients get good, quality care at a reasonable cost.

The immediate goal is to make sure there are more people on private insurance plans. I mean, people have access to health care in America. After all, you just go to an emergency room. The question is, will we be wise about how we pay for health care. I believe the best way to do so is to enable more people to have private insurance. And the reason I emphasize private insurance, the best health care plan -- the best health care policy is one that emphasizes private health. In other words, the opposite of that would be government control of health care.

And there's a debate in Washington, D.C. over this. It's going to be manifested here shortly by whether or not we ought to expand what's called S-CHIP. S-CHIP is a program designed to help poor children get insurance. I'm for it. It came in when I was the governor of Texas; I supported that. But now there are plans to expand S-CHIP to include families -- some proposals are families making up to $80,000 a year. In other words, the program is going beyond the initial intent of helping poor children. It's now aiming at encouraging more people to get on government health care. That's what that is. It's a way to encourage people to transfer from the private sector to government health care plans.

My position is, we ought to help the poor -- and we do, through Medicaid. My position is, we ought to have a modern medical system for the seniors -- and we do, through Medicare. But I strongly object to the government providing incentives for people to leave private medicine, private health care to the public sector. And I think it's wrong and I think it's a mistake. And therefore, I will resist Congress's attempt -- (applause) -- I'll resist Congress's attempt to federalize medicine.

I mean, think of it this way: They're going to increase the number of folks eligible through S-CHIP; some want to lower the age for Medicare. And then all of a sudden, you begin to see a -- I wouldn't call it a plot, just a strategy -- (laughter) -- to get more people to be a part of a federalization of health care. In my judgment, that would be -- it would lead to not better medicine, but worse medicine. It would lead to not more innovation, but less innovation.

Read the full text of an October 2 White House press briefing by Dana Perino (Iraq War Tax and S-CHIP). The remarks from this conference - notably about the cost of war and the propensity for one party to support taxation, have been widely circulated by Thomas Friedman and other columnists of a range of persuasions.

MS. PERINO: Well, we've always known that Democrats seem to revert to type and they are willing to raise taxes on just about anything. There's no need to increase taxes. The President has shown how if we prioritize and if we get the spending bills done in a clean way, we can actually have a surplus in our budget by 2012. We don't see any need to raise the taxes.
Q But when you talk about priorities, tomorrow we're expecting the President is going to veto the S-CHIP bill over saving $30 billion, and meanwhile you're spending hundreds of billions of dollars in the war in Iraq --
MS. PERINO: But the President -- the President's first and foremost responsibility is making sure that Americans are safe, including children are safe. And, frankly, that's Congress's main responsibility, as well. And that's where the priorities are. I think that anyone -- I think it's apples and oranges to try to compare S-CHIP to funding for the troops.
Q Well, they're all in the same federal budget, you do have to pick priorities on what you're spending money on, don't you?
.....
A .....when you start digging deeper and realize that they've got a funding cliff, that basically in 2011, there's no money left for the S-CHIP program. They don't fund it sustainably. And on this idea of raising taxes on the American people right now to fund a war, well, does that sunset? Do they wait for al Qaeda to wave a white flag and then those taxes are going to go away? Does anyone seriously believe that the Democrats are going to end these new taxes that they're asking the American people to pay at a time when it's not necessary to pay them? I just think it's completely fiscally irresponsible, and the President won't go along with it.

The issues are not partisan; the issues are not potentially as polarizing as partisans would have one believe. The primary challenge is simple: how do we as a society elevate awareness of these pressing issues and employ every ounce of our entrepreneurial energy to rebuilding a national infrastructure that includes better health care, better education, and a safer, stronger beacon of liberty? What is required first and foremost is a more honest attempt to focus on the problem, not anticipate fixing the blame.