Obamahealth: More Money For Worse Care

The Obama Administration is already laying the groundwork for the next health-care debate. After they have passed landmark legislation this year, after tens of millions find themselves in a public plan or an expanded Medicaid, the Administration sees a day when it will be in a position to push cost control.

It’s early June.  In a matter of days – probably in less than a week – Senate Democrats will release a massive bill that will upend American health care.  Though the details aren’t known, Senator Baucus and his colleagues will probably unveil a proposal that will include a requirement for people to buy health insurance (even if they don’t want it), a new federally-run health-insurance exchange, and a public plan option to compete with private insurance.  The goal: reducing the ranks of the uninsured. Without hesitation, it’s the biggest health-care legislative effort since 1993.  There is no guarantee of success and the credibility of the White House is on the line. Why then is the Administration talking up cost savings? From a distance, they seem off-message. Last Monday, for example, the Council of Economic Advisers released a report discussing the economic benefits of restraining the growth in health spending. The report happily notes that for a family of four with health spending trimmed back by 1.5% a year “income in 2020 would be approximately $2,600 higher than it would have been without reform (in 2009 dollars).” It’s all good stuff and the report makes important points.  But how does this tie into the coming debate – that is, their justification for, say, allowing millions of non-elderly Americans to opt into a Medicare-style plan? The CEA work is just one such Administration effort.  A few weeks ago, the White House organized an event with representatives of major health-care stakeholders pledging to reduce the growth in health spending.  (See here for my thoughts on the “voluntary” agreement.)  The White House keeps pushing the same point: from entitlement reform (it’s about health reform, they insist) to pursuing “value” in health care, they seem cost-obsessed and decidedly out of step with this year’s agenda. Yuval Levin, writing at NRO, notes how unusual it is:

There has been something very odd about the logic of the Democrats’ case on health-care reform the past few months. Rather than focus on access and the uninsured, as they have usually done and as Obama did during the campaign, they’re talking about their massive expansion of the government’s role in American health insurance as a way to save money, and focusing a lot of attention on the (unquestionably pressing) need to control health care costs. The trouble is, they don’t actually have any plan to control health-care costs.

Levin goes on to note – as others have – how thin the White House plan is for reducing health-care cost growth.  Presently, all they have is a vague agreement from industry, with no targets, specifics, or consequences should costs not be contained. Many assume that President Obama wants to pass legislation this year, and then move on.  And his domestic agenda hardly lacks for ambitious non-health-care goals. But perhaps there is a larger agenda here.  The press releases, speeches, and reports are part of a concerted effort now to lay the groundwork for the next health-care debate.  After they have passed landmark legislation this year, after tens of millions find themselves in a public plan or an expanded Medicaid, the Administration sees a day when it will be in a position to push cost control.  Cover everyone now, largely through government efforts, and then – armed with the full weight of the federal government as the largest purchaser of health services in the country (and the world) – cut costs. Commentators have dubbed 2009 “the year of health-care reform.”  The Administration is settling down for a long fight, one that will stretch well beyond this December. These are the years of health-care reform.