Friday, January 30, 2009

To Break the Bank or Not to Break the Bank With Health Care Reform?--The Wrong Question

The new debate in Washington these days seems to be over whether we can or cannot afford to do health care reform given the financial crisis and the huge budget deficits.

Some argue that with the rising unemployment rate, certain increases in the number of those uninsured to follow, and the need to inject money into the system, this is the right time.

Others say that in the face of daunting national debt it is not the time to dramatically increase our entitlement obligations even further.

In my mind this is a false debate.

Both sides seem to presume that solving the access problem, and not the cost of care in America, is the real problem.

I come from the perspective that the onerous cost of health care in America is the problem that needs to be solved. Solving it is exactly the right thing to do in the face of an already dramatic increase in the national debt.

The number of those uninsured--or on the edge of becoming uninsured--is a symptom just as the looming insolvency of Medicare is a symptom of the health care cost problem.

If you want to really reform America's health care system and pay for more people to be a part of it you have to solve its long-term cost problems.

What better time to do that then when we are faced with enormous budget deficits that, even before the financial meltdown, were always being driven to a great extent by health care costs?

But here's the rub. Dealing with costs is the problematic part of health care reform. In a way, agreeing that we should pay to cover everyone is the easy part. Kind of like buying that new Porsche is the easy part--who wouldn't want one? The hard part is paying for it.

The CBO's December report on the cost of health care broken down by 115 options tells the story of real health care reform.

It can be done. We can do it in a way that eventually reduces the budget deficit and our long-term national debt. That would be real health care reform and there is no better time to do it than now.

But it would have to be done the hard way.

The hard way will involve some really politically tough choices having to do with how much we pay--how much we pay providers and how much we pay for those who receive benefits. Cost containment is a straightforward if not problematic challenge--to contain costs you have to contain costs.

That is really the discussion we should be having.

Right now the debate seems to be about whether or not we want to break the bank with health care reform.

Why would we want to do that? More importantly, why do we need to?

CBO's December Report on Health care Reform Choices: CBO to Health Care Reformers: Naive Policy Makers Need Not Apply
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