Jonathan Cohn argues that one of the reasons Democrats are having trouble defending their health care policies is that conservatives are making “arguments that cut in completely opposite directions.” Namely, one the one hand, conservatives are arguing that costs will explode, yet on the other hand, arguing that President Obama is so dedicated to cost controls that he’ll institute rationing. But I don’t really see these arguments as being at odds, for several reasons.
First off, there’s an important distinction between overall health care expenditures — i.e. the total amount of money the whole country spends on health care each year — and the amount of money the government spends on health care. In 2007, for instance, our overall health care expenditures were $2.24 trillion. Of that, about 46 percent was spent by government at some level, or $1.04 trillion, according to data from the Centers for Medicare and Medicaid Services. When Obama and others talk about “bending the health care cost curve” what they’re talking about is the overall number, which is currently projected to grow to nearly $4.4 trillion by 2018. However, at the same time, Democrats are proposing policies that would substantially increase the government’s share of the national health care dollar. They are proposing a massive expansion of Medicaid as well as huge subsidies for individuals to purchase health insurance through an exchange. So, it’s completely feasible that government, through rationing, could decrease the United States’ overall spending on health care, while at the same time dramatically increasing our national debt. It would just be a matter of government taking a much larger slice of a smaller piece of pie.
There’s another scenario that I think is more likely. If health care legislation passes, I imagine at first that the administration would resist rationing or any sort of unpopular cost controls. But what will happen is that all the free and subsidized health insurance will drastically pump up consumption and drive health care spending out of control. Obama’s attempts to rein in costs through wider adoption of information technology, preventive medicine, wringing efficiencies out of Medicare, and cutting down on waste, fraud, and abuse within the system will not work. That’s when the government will start to ration care as they do in other countries. The comparative effectiveness research panel is just one example of a provision that creates the infrastructure for future rationing. While Obama argues that the this would just be about providing information that would not be binding, if you read Tom Daschle’s book Critical: What We Can Do About the Health-Care Crisis, he describes a similar Federal Health Board, and explains how government could compel wider adoption of the recommendations. For instance, there could be a requirement that all government programs would have to abide by its recommendations, that requirement could extend to any private insurer participating in the exchange, and as Daschle wrote on page 179, “Congress could opt to go further with the Board’s recommendations. It could, for example, link the tax exclusion for health insurance to insurance that complies with the Board’s recommendations.” And remember, this is a man Obama originally tapped to lead his health care effort, and Obama specifically said in a blurb on the back of Daschle’s book that, “his Federal Reserve for Health concept holds great promise for bridging this intellectual chasm and, at long last, giving this nation the health care it deserves.”
Either way, Obama has run into trouble because he isn’t being honest about the tradeoffs that exist. He’s trying to make people believe that we can expand coverage, save money, and do so without resorting to the kind of rationing that other nations do. For good reason, the American people aren’t buying it.
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