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Column: The GOP thinks health-care reform costs too much. So why are they trying to repeal all the cost controls?

I've got some good news for deficit hawks: This year, Congress passed legislation reducing the deficit by about $125 billion over the next 10 years. But, as they say on the infomercials, that's not all! The bill cuts the deficit by $1.3 trillion in the second decade. That more than pays for every dollar we've spent on stimulus since 2008. It also sets up a new -- and credible -- system to keep Medicare's costs under control. So, hear that, fiscal conservatives? Hear that, bond markets? This is progress, baby. We'll lick our deficit problem yet.

The bill in question, of course, is the Patient Protection and Affordable Care Act, better known as health-care reform. The numbers come from the nonpartisan Congressional Budget Office. But as always, there's a catch: The savings arrive only if the policies behind the savings are allowed to do their jobs. And in the GOP's zeal to repeal a bill it considers a deficit-increasing nightmare, Republicans are focusing their fire on the parts they should like: The cost controls.

On July 27, Sen. Jon Cornyn (R-Tex.) introduced the Health Care Bureaucrats Elimination Act, co-sponsored by Sens. Orrin G. Hatch (R-Utah), Jon Kyl (R-Ariz.), Pat Roberts (R-Kan.) and Tom Coburn (R-Okla.). The legislation doesn't seek to repeal health-care reform (though many Republicans would also like to do that). Instead, it takes aim at perhaps its most promising cost control: the Independent Payment Advisory Board. "In true fashion of Obama- Reid-Pelosi hubris," Cornyn said, "the IPAB is the definition of a government takeover." A government takeover of . . . Medicare?

Putting aside the metaphysics of the government taking over a government program, Cornyn makes two arguments, and they show the difficulty Republicans are having opposing health-care reform without opposing fiscal responsibility and much-needed deficit reduction.

Read on...

By Ezra Klein  |  August 16, 2010; 9:01 AM ET
Categories:  Articles , Health Reform  
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Comments

Inaccurate wordage. Better said that these people project cost savings, rather than there being actual cost savings.

Course, I've heard that before.

Posted by: krazen1211 | August 16, 2010 9:23 AM | Report abuse

Ezra, Is your criticism of the GOP based on empiricism, or ideology? What's it like providing cover for corrupt politicians? Is it racist to criticize Obama?

Posted by: soma_king | August 16, 2010 10:02 AM | Report abuse

It's almost like these GOP politicians are engaged in politics instead of policy wonkery. Ezra is shocked -- shocked! -- to discover that.

Posted by: redwards95 | August 16, 2010 10:05 AM | Report abuse

"So why are they trying to repeal all the cost controls?"

Ummm... isn't it obvious?

Cost controls and the mandate are unpopular - as was noted by many before PPACA passed. It will thus be politically popular to kill them. This is why so many of us commenting here have been skeptical the cost savings will actually be achieved.

Posted by: justin84 | August 16, 2010 10:20 AM | Report abuse

No surprise there. It's all about politics and ideology because it is all about being the one to do it and taking credit and trashing the other side.

As a matter of fact the Republicans have about 5 proposals that would gut it.

1. HEALTH Act (H.R. 1086) Limits damages and statute of limitations on lawsuits and restricts attorney fees.

2. Small Business Health Fairness Act of 2009 (H.R. 2607)

Lowers costs and frees small business from state mandates.

3. Promoting Health and Preventing Chronic Disease Through Prevention and Wellness Programs for Employees, Communities and Individual Act of 2009 (H.R. 3468)

This provides wellness program credit and makes competitive grants available to plan and implement programs that promote health and wellness & prevent chronic disease.


4. Improved Employee Access to Health Insurance Act of 2009 (H.R. 3821)

This is prohibits states from establishing law that prevents an employer from instituting auto- enrollment process coverage of a participant. This also guts Rep. Ryan's plan to have employer auto-enroll their employee.


5. Health Care Choice Act (H.R. 3217)

Allows for purchase of policies across state lines.

Posted by: beeker25 | August 16, 2010 10:29 AM | Report abuse

justin84 @ August 16, 2010 10:20 AM wrote "Cost controls and the mandate are unpopular - as was noted by many before PPACA passed. It will thus be politically popular to kill them. This is why so many of us commenting here have been skeptical the cost savings will actually be achieved."

I can't tell whether you being sarcastic. Can you clarify this for me, please? You say that you do not think that cost savings will be achieved, so you support efforts to eliminate the cost controls. Which of course will assure that cost savings will not be achieved.

PS: The reason I am confused is that it happens to be the Republican position.

Posted by: AMviennaVA | August 16, 2010 10:33 AM | Report abuse

Why are the GOP killing the cost controls?
.
So they can claim that Healthcare Reform contributes to the deficit of course.
.
This is the first step of laying the trap to get the whole thing repealed. If you can kill the cost controls, it will cost lots of money; that much is agreed on.
.
Who do you think will be blamed when the Dem/Obama pushed Healthcare Reform ends up costing billions more than originally forecast? It sure won't be the GOP (even if they were the ones who watered it down and then cut out the cost controls)

Posted by: rpixley220 | August 16, 2010 10:35 AM | Report abuse

AmviennaVA,

What many conservatives believe is that not only will it be politicized from the right but from the left as well. (remember the whole Doc Fix issue??).

In answer to Ezra's general question the Republicans do it because they're stupid. Doesn't mean the Dems aren't stupid in many things they do it just means that it almost never gets mentioned around here.

Posted by: visionbrkr | August 16, 2010 11:01 AM | Report abuse

The GOP won't actually be able to kill cost controls while Obama is President. However, if they regain control of Congress, they can maneuver him into vetoing bills that contain popular measures to eliminate death panels and the mandate, thus further eroding his chances to regain the office in 2012. Then, they can gut the whole thing.

Posted by: bgmma50 | August 16, 2010 11:07 AM | Report abuse

"Cost controls and the mandate are unpopular - as was noted by many before PPACA passed. It will thus be politically popular to kill them. This is why so many of us commenting here have been skeptical the cost savings will actually be achieved."

I can't tell whether you being sarcastic. Can you clarify this for me, please? You say that you do not think that cost savings will be achieved, so you support efforts to eliminate the cost controls. Which of course will assure that cost savings will not be achieved.

PS: The reason I am confused is that it happens to be the Republican position
"

Quite simple, really.

Eliminate the 'cost controls', and along with it the $150 billion a year in welfare spending, and then put back in real cost controls.

Posted by: krazen1211 | August 16, 2010 11:08 AM | Report abuse

"Ezra, Is your criticism of the GOP based on empiricism, or ideology? "

Pretty clear it's based on empiricism. CBO projections of significant savings.

You can't more empirical than that. The CBO is the ONLY acknowledged (by any party) fair arbiter of the numbers.

If you are against this plan, then either you are for something more liberal (e.g. single payer) or you are for the current broken system (few GOP politicians say we should stay with the status quo and none of them have offered any other serious plan or shown any actual interest in doing so).

I sense all criticism herein so far for Ezra's post above is based on pure ideology rather than an honest contemplation of Ezra's points.

Posted by: lauren2010 | August 16, 2010 11:08 AM | Report abuse

"Who do you think will be blamed when the Dem/Obama pushed Healthcare Reform ends up costing billions more than originally forecast? It sure won't be the GOP (even if they were the ones who watered it down and then cut out the cost controls)"

Out of curiousity, who should be blamed that Medicare cost 10x what the Johnson administration and Democrats in Congress forecasted?

These people predicted that Medicare would cost $12 billion a year in 1990. The actual cost was around $120 billion.

Posted by: krazen1211 | August 16, 2010 11:11 AM | Report abuse

"Can you clarify this for me, please? You say that you do not think that cost savings will be achieved, so you support efforts to eliminate the cost controls. Which of course will assure that cost savings will not be achieved."

AMviennaVA,

I had doubts regarding these two points going into this:

1) Cost controls will be as effective as advertised
2) Cost controls will survive

I'm not supporting the Republican position, but I see no reason for confusion on why the Republicans are opposing the cost controls.

Cost controls are unpopular. In and of itself, you can win political points for attacking them. As a bonus, Republicans can later point to out of control costs and use them to help repeal PPACA in the future. I'm not sure they'll succeed, but I can see how they might think this is a good long term strategy.

Posted by: justin84 | August 16, 2010 11:15 AM | Report abuse

In order for Republicans to put forward popular bills that would also repeal key portions of the ACA they'll not only have to retake the House, they'll also have to retake the Senate with large enough majorities to overcome filibusters. Though it's pretty generally accepted that the Republicans will make sizeable gains this year and may even take the House, it would be a much bigger feat if they took the Senate as well, and almost impossible that they'll take the Senate with enough of a majority to overcome filibusters.

krazen211, you are correct that the cost savings are projected. Still, that's the best we've got; programs which should, we think, result in greater savings down the road. If they don't, or if we decide we want more projected savings than we currently expect, then we should talk about instituting other programs which increase the savings or ramping up those that we already have.

And it's important to keep in mind that if we reduce the deficit but bankrupt the country with out of control private spending on healthcare that we won't be any better off.

Posted by: MosBen | August 16, 2010 11:27 AM | Report abuse

"Pretty clear it's based on empiricism. CBO projections of significant savings.

You can't more empirical than that. The CBO is the ONLY acknowledged (by any party) fair arbiter of the numbers.

If you are against this plan, then either you are for something more liberal (e.g. single payer) or you are for the current broken system (few GOP politicians say we should stay with the status quo and none of them have offered any other serious plan or shown any actual interest in doing so).

I sense all criticism herein so far for Ezra's post above is based on pure ideology rather than an honest contemplation of Ezra's points."

Truthfully the belief in universal health care is based on ideology and politics. It is certainly not a necessary condition for economic growth.

Posted by: krazen1211 | August 16, 2010 11:30 AM | Report abuse

krazen1211, universal coverage in the abstract may be an issue of ideology, but supporting specific plans which involve or require universal coverage can be a pragmatic decision as well based on considerations of cost or patient outcomes. It may be that the "best" system requires universal coverage and is necessary to maximize economic growth. That may not be the case, but I'm just saying that supporting universal coverage may not necessarily be the product of ideology or politics.

Posted by: MosBen | August 16, 2010 11:50 AM | Report abuse

"they'll also have to retake the Senate with large enough majorities to overcome filibusters" posted by MosBen

I keep telling Ezra that he will grow to love the filibuster one day. :)

Posted by: bgmma50 | August 16, 2010 11:51 AM | Report abuse

re: Mosben

Well, I look at the data.

http://www.bls.gov/fls/flsgdp.pdf

You can compare US GDP and GDP/capita values to those of other nations. This despite the fact that the US has not had a 'universal' healthcare program for this duration while those other nations have.

Or you can compare the GDP growth of nations like China and India (which do not have universal healthcare) to nations that do.

Or you can look at US GDP growth in the 1980s/1990s in the absence of 'universal' health care. Especially in the late 1990s when growth averaged ~4%.

Back in 1969, the Eurozone compromised 38% of total world GDP. Today, that value has dropped to 28%. By contrast, the US was 28% of total world GDP back in 1969, and only dropped to 27% over the past couple years during this economic slowdown.


To me, I suppose its possible that the theoratical 'best' system might require universal coverage but I don't see that being put into place anywhere. More likely it is politicians deciding that this is good for their politics.

I supposse once you decide to have universal coverage there are specific plans that are pragmatic and some that are not. But that's simply one type of rationing vs another, IMO.

The simplest and most effective way to engage in cost savings is simply to reduce the number of people on government healthcare. It remains to be seen whether political ideologues will prevent that.

Ezra Klein often talks about enacting stimulus packages now while cashing in on real savings later. Well, real savings would be delaying the subsidies of the PPACA by 1-2 years, and would save $100 billion+ a year. We shall see whether he goes for it.

Posted by: krazen1211 | August 16, 2010 12:18 PM | Report abuse

"Truthfully the belief in universal health care is based on ideology and politics. It is certainly not a necessary condition for economic growth."

I guess the same might be said about clean air and water, fair elections, civil rights, and many other things we associate with social progress.

Having a system of universal coverage that is efficient and restrains the acceleration in costs can't help but benefit economic growth. But that is not what anyone with an ounce of concern for their fellow citizens would consider to be the primary benefit of a system that provides affordable access to health care for all.

Posted by: Patrick_M | August 16, 2010 12:25 PM | Report abuse

"I guess the same might be said about clean air and water, fair elections, civil rights, and many other things we associate with social progress.

Having a system of universal coverage that is efficient and restrains the acceleration in costs can't help but benefit economic growth. But that is not what anyone with an ounce of concern for their fellow citizens would consider to be the primary benefit of a system that provides affordable access to health care for all."


Probably not, actually, but then again ideologues don't particularly care about facts, right?

Posted by: krazen1211 | August 16, 2010 12:51 PM | Report abuse

Q. "The GOP thinks health-care reform costs too much. So why are they trying to repeal all the cost controls?"

A. Easy, they want the nation to fail -- it will score them a political point!

Stop trying to find sincerity/honesty/integrity in what 'the gop wants'. It's not there!!!

Posted by: rat-raceparent | August 16, 2010 12:54 PM | Report abuse

bgmma50, let's just lay it out there now so it's not a big to do if/when it happens. If the GOP takes the Senate and proposes an immediate elimination of the filibuster starting with that Congess, I'm going to oppose it. Is part of that cravenly political? Of course it is. I don't want the current GOP running free with the Senate any more than conservatives want Harry Reid's Senate unencumbered by the rule. That's why any plan to eliminate the filibuster should be six years out, so nobody will know who will be in charge. Once that's happened it's up to the voters to think about the implications of the new rules.

krazen1211, I appreciate you relying on numbers, but the one area that I had questions about the basis for your beliefs was in your belief that we'll save more money by getting more people off government healthcare, and I didn't see numbers to back that up. Was that economy-wide spending or just saving on the federal budget? Why would a totally private system cost less overall than the public/private mix we've got now, where the public system spends less per capita than the private system? Would there be vouchers ala Ryan's plan or is this a purely market-based approach? Would we still subsidize employer-provided healthcare insurance? Would emergency rooms still take all comers? That seems like a recipe for lots of people delaying care until it's most expensive to treat.

Posted by: MosBen | August 16, 2010 1:39 PM | Report abuse

MosBen, the only difference between you and me is that I fear a filibuster proof Senate no matter who's in charge. Gridlock is Good.

Posted by: bgmma50 | August 16, 2010 1:54 PM | Report abuse

"Why would a totally private system cost less overall than the public/private mix we've got now, where the public system spends less per capita than the private system? Would there be vouchers ala Ryan's plan or is this a purely market-based approach? Would we still subsidize employer-provided healthcare insurance? Would emergency rooms still take all comers? That seems like a recipe for lots of people delaying care until it's most expensive to treat."

Well, a private sector plan requires pricing some people out of the health insurance market. So, in the aggregate, providing health insurance for 250 million people costs less than providing health insurance for 300 million people, even when you factor in things like uncompensated ER care.

You can see this in the PPACA documents. They clearly say that the PPACA will INCREASE US health expenditures relative to the status quo. Makes sense, really, since giving taxpayer funded welfare (in the form of subsidies and vouchers) to ~45 million people costs money.


Perhaps the PPACA can be justified by other means, as Patrick_M seems to do. That is fine. I just don't think deficit reduction or GDP growth is a good reason for the policy, since we have gotten much more deficit reduction and GDP growth without universal health care in the late 1990s.


If we have a government health care program, it needs to ration more. Whether it rations by limiting treatments or limiting participants is up to you, really. That's what the public system in nations like the UK do. Medicare really should not be paying for those fancy motorized scooters that you see on the TV ads.

Posted by: krazen1211 | August 16, 2010 2:10 PM | Report abuse

"You can compare US GDP and GDP/capita values to those of other nations. This despite the fact that the US has not had a 'universal' healthcare program for this duration while those other nations have.

Or you can compare the GDP growth of nations like China and India (which do not have universal healthcare) to nations that do.

Or you can look at US GDP growth in the 1980s/1990s in the absence of 'universal' health care. Especially in the late 1990s when growth averaged ~4%.

Back in 1969, the Eurozone compromised 38% of total world GDP. Today, that value has dropped to 28%. By contrast, the US was 28% of total world GDP back in 1969, and only dropped to 27% over the past couple years during this economic slowdown."

Nothing about these numbers suggests that a national health care policy has restrained economic growth in Europe. Of course, India and China have experienced substantial growth in recent decades, after all they were basically pre-industrialized societies until recently. Of course, the post-war Eurozone does not command the share of the world GDP as it once did, given the decolonization and the emergence of other economic powers in the past several decades. As you point out, our own share has been essentially static, so the failure up until recently to enact policy has neither helped or hindered, if your standard for performance is the portion of global GDP. No dots have been connected here.

The fact is that we have been spending more and receiving less with our health care system compared with other industrialized countries, so I think it is very difficult to make the case that our status quo crazy quilt system somehow was an engine for economic growth. PPACA is forecast to reduce the rate at which overall medical costs increase, and if that proves true, it will be a success on both economic and social grounds.

I wish the bill went further on cost controls with pharma and the providers. Hopefully over time additional legislation will achieve additional savings. But it is ironic that there are arguments from the right that we can only control costs with a scheme of rationing, while other conservatives accuse any system that attempts to eliminate wasteful procedures, or determine most effective modalities of care, as examples of evil rationing by death panels.

As for the "fancy motorized scooters," I have no problem paying for them with my tax dollars to aid the mobility and independence of those seniors who need them, in the expectation that I will have the same level of aid when my time comes.

Posted by: Patrick_M | August 16, 2010 4:58 PM | Report abuse

Krazen 1211: ""Truthfully the belief in universal health care is based on ideology and politics. It is certainly not a necessary condition for economic growth."

No on both counts. For one thing, there is almost nothing that is "a necessary condition for economic growth", except maybe the existence of human beings.

But on the other hand, universal healthcare would discover all proper demand, and so the healthcare sector could grow to its correct size, which would not only provide more jobs and incomes in healthcare but also in related sectors such as retailing and construction. In fact it is likely that promoting healthcare as a growth industry is the one sure way to help reduce the per-unit cost growth that is projected to choke both private and public budgets.

Also, it is clear that universal healthcare increases total economic welfare, which raises everyone's standard of living, because poor workers without healthcare for themselves or their children are likely to be less productive.

Also, universal healthcare is most certainly a necessary condition for future U.S. labor competitiveness, because U.S. corporations are already moving abroad for cheaper labor, and once free trade equalizes all the standards of living, then the only outstanding discrepancy will be U.S. labor costs, which will be too high because U.S. labor will still be paying 40% more than everyone else for comparable healthcare. So the businesses won't be coming back.

Posted by: Lee_A_Arnold | August 17, 2010 12:58 AM | Report abuse

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Posted by: jaydenro17 | August 17, 2010 3:09 AM | Report abuse

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Posted by: ChristineaWithRegence | August 20, 2010 12:40 PM | Report abuse

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