So Paul Krugman, the NY Times Nobel Prize winning lefty columnist, says this (and echoes what I’ve been saying for a while)
So where in America is there serious consideration of moving away from fee-for-service to a more comprehensive, integrated approach to health care? The answer is: Massachusetts — which introduced a health-care plan three years ago that was, in some respects, a dress rehearsal for national health reform, and is now looking for ways to help control costs.
Why does meaningful action on medical costs go along with compassion? One answer is that compassion means not closing your eyes to the human consequences of rising costs. When health insurance premiums doubled during the Bush years, our health care system “controlled costs” by dropping coverage for many workers — but as far as the Bush administration was concerned, that wasn’t a problem. If you believe in universal coverage, on the other hand, it is a problem, and demands a solution.
So universal coverage systems find that they can’t just let the health care system increase costs because there is no safety valve of the uninsured to dump out of the system. We’re all in it.
That’s actually been fine with the American health care system in aggregate—if you can increase prices (costs) and have relatively inelastic demand, you’ll find that enough people stay paying into the system that the total amount paid in goes up. That’s the story of the last 40 years as we’ve gone from 5% of GDP on health care to 16%.
Of course that price increase screws the people on the margins who get tossed out. And eventually that number becomes more and more people.
However, my guess is that not enough people are on the margins suffering to cause really serious sustainable insurance coverage reform. And I said as much more than two years ago when I said we should wait for it to get worse.
Right now there are still only 45 million uninsured, Medicare is still a popular program insulating seniors from most of the foibles of the health care market, and most people still get their insurance at work. But as I said, the numbers are heading the “right” (or in reality) wrong way. In five years, the $10,000 cost of family insurance will be $15,000, more and more employers will have dumped people either into high-deductible health plans where consumers will become horrified about their out of pocket costs, or into the uninsured pool. Medicaid will not be able to pick up the slack, and the baby boomers will not yet be 65 and able to cross over into the safety of Medicare.
But this has got to really hurt, and really hurt the poorer Evangicals voting against their class interest, before it’ll create a constituency that will support universal health care both as an election issue and support it through the slings and arrows of the massive opposition that will be lined up against it. And that pain is still some years away.
So I said it would be after the 2012 election that we’d get serious reform. But I may be wrong and we’ll see what comes out of the House, Senate and conference in about a month.
But what comes after the move to universal coverage is the realization by the people paying that those suffering the burden of the increase are no longer those excluded from the system—but instead are all of us. That’s why every other developed nation uses some form of global budgeting to keep health care costs in line with economic growth-–and in some cases to reduce it (see Canada and Japan in the 1990s).
David Brooks, the NY Times middling right wing columnist (sans Nobel) calls health care costs “Rhinos” and says this:
The rhinos are closing off your future. As the White House folks say, health care premiums have doubled over the last decade. The government is saddled with $36 trillion in unfunded liabilities.
He doesn’t have a solution other than a shotgun approach to everything that’s been suggested so far. But at least he realizes that the increase in health care costs has an impact eventually on everyone. And he calls fee-for service medicine the “core perversion in the system.” So even those politically conditioned to oppose universal coverage are getting there slowly.
However, according to the NY Times reporters who went to four different households last night, Obama hasn't yet convinced Americans that the legislation in Congress can cover everyone and cost less. And somewhat foolishly in my view he’s not trying to find all the money he needs within the health care system (and yes, it’s in there all right!). So he’s leaving himself open to the accusation of saying “pay now to save later,” and of course “paying” means “taxing.” (Funny this accusation is never made when it’s a small foreign country we need to invade, but then we feel OK just borrowing that money).
But Obama and Brooks, unlike Krugman, haven’t got to the logical conclusion. You need universal coverage before the political will can be gathered to do the unpleasant things that real cost control requires. Because when there’s no more “them” to take on the pain, it visits “us”.
CODA: I’m off to the Aspen Health Forum this weekend as an invited “young” Fellow. They obviously think in terms of longer life expectancy than I do. I resisted the temptation to demand an interview with Goldie Hawn (although I was offered one). But while I’m there I’ll try to write a weightier article about how we should just what comes out of the reform process. But my two key judgment metrics are 1) Does it cover everyone, and 2) Does it have cost containment built in. I’ll tell you what Kate Hudson thinks next week.
More by this author:
Cannon on Freedom or Power?
little more on insurers, and reform means more of the same
How I've Missed the AMA…
Categories: Matthew Holt