Obama's illusions of cost-control
By Robert J. Samuelson
Monday, March 15, 2010 Click here to read the original
Almost everything you think you know about health care is probably wrong or, at least, half wrong.
"What we need from the next president is somebody who will not just tell you what they think you want to hear but will tell you what you need to hear."
-- Barack Obama, Feb. 27, 2008
One job of presidents is to educate Americans about crucial national problems. On health care, Barack Obama has failed. Almost everything you think you know about health care is probably wrong or, at least, half wrong. Great simplicities and distortions have been peddled in the name of achieving "universal health coverage." The miseducation has worsened as the debate approaches its climax.
How often, for example, have you heard the emergency-room argument? The uninsured, it's said, use emergency rooms for primary care. That's expensive and ineffective. Once they're insured, they'll have regular doctors. Care will improve; costs will decline. Everyone wins. Great argument. Unfortunately, it's untrue.
A study by the Robert Wood Johnson Foundation found that the insured accounted for 83 percent of emergency-room visits, reflecting their share of the population. After Massachusetts adopted universal insurance, emergency-room use remained higher than the national average, an Urban Institute study found. More than two-fifths of visits represented non-emergencies. Of those, a majority of adult respondents to a survey said it was "more convenient" to go to the emergency room or they couldn't "get [a doctor's] appointment as soon as needed." If universal coverage makes appointments harder to get, emergency-room use may increase.
You probably think that insuring the uninsured will dramatically improve the nation's health. The uninsured don't get care or don't get it soon enough. With insurance, they won't be shortchanged; they'll be healthier. Simple.
...expanding health insurance would result,at best, in modest health gains.
Think again. I've written before that expanding health insurance would result, at best, in modest health gains. Studies of insurance's effects on health are hard to perform. Some find benefits; others don't. Medicare's introduction in 1966 produced no reduction in mortality; some studies of extensions of Medicaid for children didn't find gains. In the Atlantic recently, economics writer Megan McArdle examined the literature and emerged skeptical. Claims that the uninsured suffer tens of thousands of premature deaths are "open to question." Conceivably, the "lack of health insurance has no more impact on your health than lack of flood insurance," she writes.
How could this be? No one knows, but possible explanations include:
(a) many uninsured are fairly healthy -- about two-fifths are age 18 to 34;
(b) some are too sick to be helped or have problems rooted in personal behaviors -- smoking,diet, drinking or drug abuse; and (c) the uninsured already receive 50 to 70 percent of the care of the insured from hospitals, clinics and doctors, estimates the Congressional Budget Office.
Though it seems compelling, covering the uninsured is not the health-care system's major problem. The big problem is uncontrolled spending, which prices people out of the market and burdens government budgets. Obama claims his proposal checks spending. Just the opposite. When people get insurance, they use more health services. Spending rises. By the government's latest forecast, health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019. Health "reform" would probably increase that.
Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. Obama might have attempted that by proposing health-care vouchers (limited amounts to be spent on insurance), which would force a restructuring of delivery systems to compete on quality and cost. Doctors, hospitals and drug companies would have to reorganize care. Obama refrained from that fight and instead cast insurance companies as the villains.
He's telling people what they want to hear, not what they need to know. Whatever their sins, insurers are mainly intermediaries; they pass along the costs of the delivery system. In 2009, the largest 14 insurers had profits of roughly $9 billion; that approached 0.4 percent of total health spending of $2.472 trillion. This hardly explains high health costs. What people need to know is that Obama's plan evades health care's major problems and would worsen the budget outlook. It's a big new spending program when government hasn't paid for the spending programs it already has.
"If not now, when? If not us, who?" Obama asks. The answer is: It's not now, and it's not "us." Pass or not, Obama's proposal is the illusion of "reform," not the real thing.
What people need to know is that Obama's plan evades health care's major problems and would worsen the budget outlook.
[Ed.Note:]
There at least three other very good reasons to avoid further government in health care issues.
The government performace track record:
Financial Help Failures!
Healthcare or Insurance?
failing government programs
We don't know what this bill does!
There are 6 versions of Bill Number H.R.3590 for the 111th Congress
1 . Service Members HomeOwnership Tax Act of 2009 (Introduced in House)[H.R.3590.IH]
[PDF]
2 . Service Members Home Ownership Tax Act of 2009 (Engrossed as Agreed to or Passed by House)
[H.R.3590.EH]
[PDF]
3 . Service Members Home Ownership Tax Act of 2009 (Placed on Calendar in Senate)
[H.R.3590.PCS][
PDF]
4 . Patient Protection and Affordable Care Act (Amendment in Senate)
[H.R.3590.AS]
[PDF]
5 . Patient Protection and Affordable Care Act (Public Print)
[H.R.3590.PP][
PDF]
6 . Patient Protection and Affordable Care Act (Engrossed Amendment as Agreed to by Senate)
[H.R.3590.EAS][
PDF]
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