The good news is that Democrats and Republicans are finally seriously engaged over the country’s fiscal crisis.
And, each side is presenting a starkly different course for the voters to choose from.
When it comes to the health care entitlements, Republicans want to cut the health care entitlement benefits and therefore ease the pressure on federal spending.
Obama wants to largely leave the programs in place and raise taxes--about $1 in tax increases for $2 every dollars in cuts.
Neither touches Social Security. Obama wants to make cuts to the Pentagon's budget—the Republicans don't.
The solution Republican House Budget Chair Paul Ryan (R-WI) has presented for controlling Medicare and Medicaid costs is almost entirely a cost shift strategy. While I would agree that means testing and defined contribution approaches to making health care consumers more cost conscious should be part of the solution, this is about all Ryan is proposing.
I worry that Ryan and the Republicans are just sticking future seniors with the problem—uncontrolled health care costs—without doing anywhere near enough to create a more cost effective health insurance and delivery system for them to have a chance of finding affordable health care.
I worry less about the Republican proposal to block grant Medicaid payments to the states. While this is just another cost shift strategy that limits federal spending at the expense of the states, at least the states have the ability (and then the incentive) to implement Medicaid cost containment policies--state by state--that give them the chance of actually reducing costs and delivering affordable care. States also have to balance their budgets every year--a real incentive the feds don't have!
The President said all of the right things about health care in his budget and debt speech yesterday. But this President has been saying the right things, while telling us we can’t kick the entitlement can down the road any longer, since he took office. And, then he just kicks the entitlement can down the road.
The only promising health care proposal I heard from the President yesterday was his proposal to strengthen the Medicare Cost Board (the IPAB), which the Affordability Act created last year. But even that was far more tepid a proposal than it needs to be. He would only sharpen the trigger—invoking the Board if spending began to exceed GDP growth by one-half a percent rather than the current one percent. What he really needed to do was expand the breadth of its powers, to include things like the benefit structure, and to get it working sooner—it now can’t impact health care spending before 2015—2020 for hospitals.
Neither the Republicans nor the President have done anything near enough in their proposals to counter the chronic unsustainable rise in health care spending that is just going to continue without systemic change to the way providers and insurers are paid.
Republicans pretty much just shift costs to seniors and the states. Obama pretty much just shifts the costs of these unaffordable programs to the “rich” through bigger taxes.
I doubt Ryan's Medicare cost shift strategy has much of a chance politically. The President will have all he can do to keep both Democrats and Republicans, under pressure from the provider special interests, from repealing the Medicare cost board as it now exists.
Whatever the political outlook for either side, we are about to see another budget and deficit showdown/crisis around Memorial Day—this one over raising the debt ceiling.
The two sides couldn’t have more different approaches to the problem—but neither really have solutions.
When the two sides get past what will quickly become the debt ceiling crisis—likely no more smoothly than they did the recent government shut-down crisis over the 2011 budget, then it will be on to the 2012 budget fight and the same stark differences and lack of real health care solutions.
This summer's debt limit, and the fall's 2012 budget confrontations, will be herculean fights.
Too bad these fights won’t be over how to solve the problem.
More on the Republican Health Care Proposal: The “Path to Prosperity”—Where’s the Health Care Cost Containment?
On controlling costs: What It Will Take to Bring America’s Health Care Costs Under Control––We Have to Change the Game
3 comments:
As long as we keep using the following:
1) opm
2) third parties to pay for healthcare without individuals having skin in the game
3) price controls by the govt
There will never be a true fix for the healthcare system.
Doctors and hospitals need dual incentives to keep patients number one and cost containment number two. That best occurs when the patient is asking, " how much does this cost doctor!"
As long as patients believe someone else is paying for their care, costs will rise!!
You erred in describing Obama's plan. The president proposed $2 in spending cuts for every dollar in tax increases -- same as the Bowles-Simpson deficit commission. The Republican ratio, by contrast, proposes $1.50 in spending cuts PLUS $1 in additional tax breaks. So what they take away from spending (mostly on the poor) they would give back for the most part to wealthier Americans. The Republican plan would still leave the government $1.5 trillion deeper in debt after a decade.
Your blog is blunt and to the point. I believe it is easier for the politicians to fight/debate issues than to try to find solutions. Healthcare reform is a huge undertaking. It is very broad with complicated problems, but I wish the parties could find common ground and focus on providing affordable coverage for all Americans. Tough and not popular decisions need to be made sooner than later, and playing the blame game pitting Democrats against Republicans prolongs the fighting stage and never proceeds to the problem solving stage. Shifting costs to seniors is not the right thing to do. Real cost reduction must be achieved increasing efficiency and value in health care.
Post a Comment