Tuesday, June 10, 2008

Would Either Barack Obama's Health Plan or John McCain's Health Plan Contain Costs?

With the health care reform efforts in Massachusetts presenting us with an incomplete result for an unsustainable cost, just how the presidential candidates' health care plans will contain costs is an even more important issue.

The short answer is neither offer any kind of silver bullet solution to controlling America's health care costs. Both Obama and McCain propose similar generally good cost containment ideas but they tend to be incremental and, because they are not very tough, they are also not very controversial.

Both McCain and Obama's cost containment ideas will help but they will not make a dramatic difference.

That's not just my opinion but also the opinion of three leading health policy experts that have had a lot of partisan and bipartisan health policy experience. The question was asked at a forum: "Putting the Brakes on Health Care Costs: Would the Candidates’ Plans Work? Are There Better Solutions?" cosponsored by the Alliance for Health Reform and the Robert Wood Johnson Foundation.

The panelists were Paul Ginsburg of the Center for Studying Health System Change, Uwe Reinhardt of Princeton University, and Mark McClellan of the Brookings Institution (and recent Bush administration CMS administrator). Ed Howard of the Alliance moderated.

Paul Ginsburg:
There are a number of [cost containment proposals] that all the candidates agree on. And we have to be suspicious of how significant they are. Let me focus on health IT...One, is that it is one thing to be in favor of health information technology becoming a more important factor in the delivery of health care. It is another to say what should the federal government do to accelerate this or make it happen. The campaign materials really do not have much on that. The other thing I wanted to say, which is also relevant, is that health information technology is probably a really worthwhile thing to do because of its potential to improve quality care, to open the door for more transparency quality. Will it contain costs? Very uncertain. A number of the other things they are talking about, will they contain costs? Very uncertain. Malpractice reform, here is where the candidates differ. I am not sure that either approach has the potential to be a major factor. So I would criticize all the candidates because a lot of the things they say certainly are not on the list of things that can really make a big dent in our cost trends.
Uwe Reinhardt:
First of all, on the proposals in the candidates' campaign, I think most policy wonks would write them down. And if you sort of looked at them and said would I favor this or not, most of us would favor them. But if you gave us a truth serum, a couple glasses of wine, say, we would probably all come out saying whether it saves dollars per year is not so clear. But it will give us more value for the dollar...So these are not to be laughed off, but I do not think that will get us out of the box.
Mark McClellan:
Because with costs as high as they are. With government spending as high as it already is. And with the budget as tight as it is, it is going to be hard to take steps and make care more affordable and available for all Americans without doing something about these fundamental problems, these fundamental challenges in underlying costs. So if we do not get better answers to the question of how do we close these gaps using health IT or care coordination or other services, it is going to be awfully hard to make progress in 2009.
It was also noted that McCain's proposals to restructure the tax system by eliminating the employer tax deduction and providing incentives for health insurance to be purchased on an individual basis were more radical and could arguably have a bigger impact on cost containment than more traditional cost containment proposals found in each of the candidates' plans.

You can read the full transcript of the forum here.


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