Senator Obama makes a lot of assertions about health care.
Are they substantiated?
This blog post (from March ’08 ), and it’s comments make for interesting reading -
http://www.thehealthcareblog.com/the_he ... -anal.html
Will Obama be able to cut the typical family’s health care costs by $2,500 a year?
Well, yes and no.
All of the candidates, Republican and Democratic, are calling for most of what is on the Obama cost containment list; expanding health information technology, improving prevention and better management of chronic conditions, and a more vibrant health insurance market.
Obama is unique in calling for catastrophic reinsurance coverage in order to reduce the cost of family health insurance. Really, this is not a cost reduction but a cost shift. This idea, first proposed by Senator Kerry in his failed bid for the presidency, would have the federal government absorb a large portion of the highest cost claims thereby taking these costs out of the price of health insurance. That would reduce the price of family health insurance but would also increase federal spending by the same amount. It would also water down the incentive for insurers and employers to manage these claims since most of these costs would be transferred to the government
Obama sets as his goal quality, affordable, and portable coverage for all.
Let’s take them one at a time:
* Quality- Obama’s quality initiatives look a lot like Clinton and McCain’s as well as those things that are going on in the market anyway. All good points—but no advantage here or expectation there will be quick savings.
* Affordability – Like Clinton, affordability is more about shifting the cost of insurance to the government then it is making a more efficient U.S. health care system. Health insurance is more affordable for people because he spends many billions of dollars subsidizing access for everyone.
* Portable Health Coverage For All: While Obama does not have an individual mandate to purchase health insurance; it is likely that he would cover as many people as would Clinton because he argues he makes coverage affordable for about as many as Clinton claims to. Compared to McCain, he puts far more emphasis on getting people covered upfront.
Obama would be successful in getting most of the uninsured covered and securing coverage for those that now have it. But when it comes to crafting a system that will not continue to outstrip the rest of the economy in what it costs, I see no evidence that he has tackled the drivers in health care costs—in fact he has likely poured some highly inflationary “gas on the fire” by adding tens of billions more to the system with no effective cost containment features to offset the new inflationary pressures.
I’m not posting this to say I support McCain’s plan. I think all the health care plans have serious issues. I think that health care professionals and health care workers should be part of a broad discussion with other stakeholders in what the future of American health care will look like.What would it take to really contain costs?
McCain would say a more robust market and more reliance on personal responsibility and consumer choice to make the market work better.
Obama, like Clinton and McCain, came up with the same generally good list of things that are underway in the market anyway with only a limited success to point to so far.
To really get at costs you have to gore some very powerful political oxen among all of the key stakeholders.
McCain won’t do it because he simply doesn’t believe that a direct assault on the market players is the right thing to do—put market incentives in place and it will encourage and reward efficient behavior.
Obama and Clinton won’t do it, not because they don’t like government intervention, but because they don’t want to offend key stakeholders who could derail any meaningful health care reform effort.
The Democrats learned a very powerful lesson in 1994 when many of the special interests all united in opposition to the Clinton Health Plan.
Capping or even reducing costs means you have to cap or reduce costs. There are no magic bullets that reduce payments without doctors, hospitals, insurers, and lawyers getting less than they would have gotten. All of the health IT, prevention, wellness, and the like will not reduce costs by any big amount at least in the short term.
McCain avoids the notion that aggressive cost containment is important because he just doesn’t believe in it—a vibrant market will do the job.
Obama and Clinton avoid the notion that their cost containment list will be inadequate because it is politically expedient to do so—they aren’t going to risk their health care reform proposals by taking on the big stakeholders head-on.
But going through all of this in the middle of a presidential campaign is creating a lot more heat than light on the best solutions. Obama’s plan sounds to me like a lot of wishful thinking. If he leads us down this path, and it fails, is there a Plan B or exit strategy? Or will the Democrats want to just throw more (of our) money at it?
