Exactly what is the problem we’re trying to solve with healthcare reform? There certainly are issues we need to address with regard to our healthcare system, but let’s be clear about what it is we want to solve before we pass sweeping new legislation.
If we’re not sure exactly what we’re trying to accomplish, we shouldn’t be messing with 1/6 of our economy until we are. If the goals can be clearly met based on the plan that’s been established, at that point we can move forward; on the other hand, if analysis of the legislation shows a projected failure to meet the objective(s) we’ve set forth, maybe we need to look at some new solutions.
The alternative would be to simply state our hopes about what the plan will accomplish despite all evidence to the contrary, try to push through an ideological bill, and attack and attempt to bury any opposition news along the way.
Is the purpose to bring down costs (as almost everyone agrees is necessary) for consumers and government? Is it to cover everybody, irrespective of cost? Is our goal to ensure the same treatment for all, regardless of ability or willingness to pay? Is it to shift costs within the country from one group to another?
President Obama has said since his days on the campaign trail that his “plan” for health care reform would cut the average cost of premiums for a family by up to $2,500 a year. Cost savings for individuals is then clearly a priority of this administration. Apparently the president hasn’t passed on his secret to Congress, because no Democrat plan in the House or Senate even comes close to doing this.
See the post I wrote late last week, “Baucus Bill and Cost Increases.” Analysis of the bill shows increases in insurance premiums for the average family. Even after factoring in government subsidies, for which only 17 million people would be eligible according to the CBO, there’s a question as to whether those individuals would be paying any less than if nothing were done at all. Everybody else, on the other hand, will be paying substantially more for their own care in addition to paying for those subsidies through taxation.
According to the Cato Institute, the new taxes needed to fund the bill are more than double the amount of the “deficit reduction” being touted by supporters. They have also determined that the ultimate cost to taxpayers, in increased taxes and premiums, totals over $2 trillion in the first ten years.
Defense of increased costs often includes the caveat that these costs are upfront, short-term, and necessary for fixing our healthcare “crisis”. Unfortunately, neither the Baucus bill nor the House bill seem to have incorporated mechanisms for reducing cost over time.
When looking at ten-year projections (2010-2019), the expenses aren’t fully in force until 2013, while tax increases begin immediately. This skews any analysis of actual cost and completely misleads the casual observer. In other words, as bad as current projections look, the ten years from 2020-2029 will be far worse.
Of course, all of these analyses are based on Congressional numbers. When Medicare was instituted in 1965, the estimated projection of cost for the year 1990 was $12 billion and the actual cost turned out to be $100 billion. Healthcare spending since then has increased, on average, 10 percent a year and government now pays approximately 46 percent of all healthcare costs in the US. 
Why is “reform” that was supposed to shift the cost of healthcare services for the uninsured from the very, very expensive ER to the more moderately-priced doctor’s office going to cost us trillions more than we currently spend? The care received by the uninsured is not ideal; no one said care you don’t pay for should be ideal though.
Okay, so maybe the bills in Congress don’t cut costs; maybe they will increase our deficit far more than we realize and cost the average citizen far more than doing nothing. But there are other considerations, and next post we’ll look at some of them: universal coverage, equalization of treatment, and/or redistribution of healthcare resources.