Last week Senate Majority Leader Harry Reid was quoted as raising the possibility
we could take the $600 billion in new revenue projected from a
"cap-and-trade" plan to cut green house-gas emissions and use some or
all of it to help pay the estimated $1.5 trillion cost for
comprehensive health care reform.
Energy and climate change issues aside that would be a bad idea–a really bad idea.
The biggest health care challenge we face in America is the cost of health care. To really reform the system we have to bring its costs under control. The only way we can achieve sustainable health care reform
is to pay for most of the cost of any reform plan out of the savings we
achieve fixing the system and its perverse incentives to spend more
without regard to what we receive.
Finding $600 billion from
another part of the budget to simply subsidize these out-of-control
costs would be tantamount to just raising taxes to keep paying this
unsustainable bill. Pouring another $600 billion into the system would
have the supply-side inflationary effect of just pushing costs up even
more–pour lots more money in and it will get spent. Why would any
stakeholder–provider or beneficiary–have any incentive to reduce health care costs?
finding $600 billion would go a long way to also meaning no one in
Washington would have to face the hard choices needed to actually
reform our system. It would mean we could just promise everyone
painless access to whatever health care services they want. Just think how happy consumers, doctors, drug companies, hospitals, and all the rest would be.
That is until the money ran out.
But, you know, this is just shortsighted and politically expedient enough to go somewhere.