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Coverage and Cost

I'm a bit baffled by Michael Kinsley's column this morning on the need to go for the "low-hanging fruit" in health-care reform. This graf, for instance, doesn't work on two levels:

In mid-June, the Senate health committee put out its version of reform and was horrified when the Congressional Budget Office figured that it would cost a trillion dollars over 10 years (over current spending) and would still leave millions uninsured. The committee retreated to its lair and re-emerged in early July with a revised plan "scored" by the CBO as costing only $600 billion and leaving only 3 percent of the population uninsured. Six hundred billion doesn't sound like all that much to achieve, or come close to achieving, an important and long-standing goal such as universal health care. But keep in mind that health-care reform is supposed to save money. Its premise is that the current path is unaffordable. In that sense, a "mere" $600 billion extra is total defeat.

The first problem is that it's wrong: The CBO scored the revised Health Committee bill as costing $600 billion and leaving 20 million people uninsured. You only got down to 3 percent after adding in the Medicaid expansion expected out of Finance. That would probably cost an additional $600 billion or so, bringing the total cost to $1 trillion to $1.3 trillion.

But it's not clear that this is an "extra" cost, as Kinsley would have it. If we take $600 billion we're currently spending to subsidize the most generous health-care plans offered by employers and instead use it to subsidize the uninsured, is that an "increase" in cost? Or a change in priorities? If The Washington Post wants to build a new Web site, and that costs $1 million, and they decide to print few paper editions to fund that project, is it an increase in spending? Or a change in priorities?

Moreover, Kinsley is conflating different things. He notes that there is "an important and long-standing goal" known as "universal health care." That will probably cost some money up-front. Then there is another goal called "health-care reform" that "is supposed to save money." These two things are connected, but not necessarily the same thing. Achieving one is not is "total defeat" on the other. In fact, there are ways in which it would make the other easier.

For instance, Kinsley identifies, as some of his low-hanging fruit, that "ambulances are way overused. So are emergency rooms." But why are ambulances and emergency rooms overused? Well, in large part, it's because uninsured and underinsured Americans cannot afford regular visits with a primary-care doctor, and because they do not have the money to get illnesses treated if there is some chance that they may resolve themselves. When they don't, either the ambulance is needed or the emergency room is the only place that is legally required to accept them.

If you want to change that, you need to bring these people into the health-care coverage system. But there are 60 or 80 or 100 million of them. So now you're covering 47 million uninsured and strengthening the coverage of another 40 million or so. And that costs money on the front-end. Maybe a lot of money. Maybe $1 trillion to $1.3 trillion. But it also saves some money over time. And it certainly increase the "health" we're buying when we spend each dollar.

Health-care reform has two parts, coverage and cost. Coverage will require new money in the short-term. Cost will save money in the long-term. And both are worth doing.

By Ezra Klein  |  July 10, 2009; 11:35 AM ET
Categories:  Health Reform  
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Comments

"So now you're covering 47 million uninsured and strengthening the coverage of another 40 million or so. And that costs money on the front-end. Maybe a lot of money."

Not so.

Myth - "It will be very expensive to get good health to everyone."

Fact - Actually there's a way we can have better universal health care at no more than we are now paying (see 5. below). Here are the facts (cf. www.pnhp.org):

1. We waste $100 - $200 Billion a year on the high overhead of insurance companies.
2. We waste $200 - $300 Billion a year on doctors filling out forms for insurance companies.
3. I don't know the compliance cost of patients fighting with insurance companies, but it must also be in the 100's of Billions.
4. We pay the highest drug cost in the world to drug companies that spend twice as much on profit and three times as much on "marketing" as they spend on research. This is about another $100 Billion each year.
5. Because of the above, we could give Super Medicare (few limitations, no co-pays, no deductibles and complete drug, dental & mental coverage) to everyone at no more cost per person than we are now paying.

Other countries with single payer systems get better health care as measured by all the basic public health statistics and they do it at less than half the cost per person. If we build on our rotten system, we will get a health care system with rotten foundations.

Posted by: lensch | July 10, 2009 1:02 PM | Report abuse

I don't get the CW in Washington that we don't just need to get universal coverage, we need to get it with one hand tied behind our back, without breaking a sweat. First, get everyone in the system, and establish the principle of guaranteed access to affordable health care, and be willing to pay for it, possibly with a Tobin or financial transactions tax, or by repealing the Bush tax cuts. Then you can implement your favorite pony plan to reduce costs whilst increasing quality, abolish obesity via farmers' markets, etc.

If voters, after two landslide elections, can't get guaranteed affordable healthcare from Democrats, which every other first-world country provides, then they won't, and probably shouldn't, trust Democrats to do anything else.

My favorite pony plan probably here:
http://bostonreview.net/BR34.3/baker.php

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2009&base_name=brooks_steps_up_to_the_health

Posted by: roublen | July 10, 2009 2:02 PM | Report abuse

I can't understand why you continue to use the term "health care reform" to refer to coverage and cost. In any case, David Brooks has a good column today that gets to the heart of the matter. For starters, read this, "The health care bills now winding their way through Congress would cover many of the uninsured. They would pay for most of the costs associated with that expanded coverage. But they would do little to change the fundamental incentives that drive health care inflation." Brooks is right about this and the whole Congress and the White House are hiding behind the vague notion of reform. The word reform is not a specific term, so even minor, crappy change rather than truly overhauling the bloated and inefficient medical system in this country can be quite adequately called reform.

Posted by: goadri | July 10, 2009 2:44 PM | Report abuse

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