Under The Microscope: Dissecting Claims on Reform

By Alec MacGillis
It was health reform time on ABC's Good Morning America today, with Diane Sawyer speaking with three top administration officials, followed by a rebuttal from Rep. Eric Cantor (Va.), the second-ranking House Republican.

Remarks on both sides could have used some follow-ups and corrections -- the White House trio danced around some uncomfortable points by leaving some important things unsaid, while Cantor made a couple of claims that were flat out misleading.

In chronological order:

1. White House Domestic Policy Adviser Melody Barnes dismissed a question about the high cost estimates for universal health care by making it sound as if reform would involve channeling health care spending in new directions, not raising new revenues. "People are thinking this is brand new money being printed. There's already two trillion dollars worth of health care that’s being spent already," she said. "This is redirecting that money so it’s efficiently and effectively used, so people are getting better quality."

This is only partly true. The various Democratic plans that are emerging do involve paying for part of expanded health coverage by trimming several hundred billions over 10 years from Medicare and Medicaid.

But providing anything close to universal coverage will cost at least $1 trillion over 10 years, and that will mean finding some new revenues. President Obama has proposed limiting the itemized deductions of wealthy taxpayers; Senate Democrats are considering taxing some employer-provided health benefits; others are talking about taxing sodas. Those may or may not be worthy ideas. But they are "new money." And the White House officials made no mention of the idea that many Democrats believe will keep costs down: a public insurance option.

2. Health and Human Services Secretary Kathleen Sebelius and White House health reform director Nancy-Ann DeParle rebutted implications in one of Sawyer's questions about the prospect of health care rationing by saying flatly that nothing of the sort would occur. Americans "do deserve the best possible procedure and best possible hospital and that’s what the president’s trying to guarantee here. Clinicians will make those decisions," said DeParle.

Sebelius added: "No one is going to tell your doctor he or she can’t do a procedure but there will be a set of protocols that we know at the end of the day actually produce a better result for you and are less intrusive. I don’t know a single patient who if they knew they could have one MRI instead of three or if they knew a drug regimen worked as well as surgery wouldn’t say well, don’t cut me open, do what works best for me. That’s really what we’re talking about -- not cheaper medicine but better medicine, each and every time."

These answers gloss the truth. They do not mention what most of the Democratic plans in Washington are contemplating, and what many health care experts believe is necessary to rein in costs -- an empowered "comparative effectiveness" panel that would study the cost and outcomes of various procedures and issue guidelines on the treatments providers should use. Such an entity would not go as far as the equivalent agency in England, which decides which treatments are or are not covered under that country's truly nationalized health care system. But the new process will hardly just be leaving everything up to the clinician's discretion. If, for instance, the Medicare Payment Advisory Commission is strengthened to the degree that the White House appears to be contemplating, then physicians will be getting much stronger direction from Washington.

3. Barnes responded to Sawyer's question about the importance of prevention by saying that this was at the heart of the administration's cost-saving plans. "We're also making sure there are incentives so that business -- we’re working with CEOs who came in and said, 'we’re working with our staff to make sure we’re reducing obesity rates, we’re working on tobacco cessation,'" Barnes said. Left unmentioned is that there are many skeptics who believe that plenty of preventive measures could only drive up costs further -- early-detection tests for health disease or cancer, for instance, that lead to treatments in patients that may never develop the disease in question. Also, there are plenty of CEOs -- most visibly, the head of Safeway -- who say the best way for companies to offer incentives to their employees to live healthy lives is for health coverage to remain a corporate responsibility.

4. When it came his turn, Cantor said that the Republicans are planning to expand health coverage "by starting with where people get most of their health care and that is with their employer. If 70 percent of people in this country get their coverage through their place of work, we’ve got to be sure to make it so that those employers can keep their costs down."

But what Cantor did not say was that the entire premise of the Republican plan for health reform is to move away from an employer-based coverage system by eliminating the tax exclusion that employer-provided benefits now enjoy and instead giving individuals a tax credit with which to buy their own insurance on the open market.

5. Cantor took a broadside against proposals for a public option that would compete against private insurance plans. "A government plan, no matter what you call it, will increase costs," he said. "It will reduce choices and essentially it will not allow you to keep what you have and that is the essence of what the health care system in this country is about."

This is off on several fronts. The whole reason private insurers fear a public option is that it would be able to offer coverage at lower costs -- unfairly so, say the private insurers. While the Congressional Budget Office has yet to "score" the cost effects of an aggressive public option, a study by the Lewin Group, a consulting firm backed by UnitedHealth Group, found that a strong public option would greatly reduce costs:

"If Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage."

And a public option would not reduce choices, at least not right away -- it would be one among many options presented to person or small business. What is true is that over time, private insurers could have such trouble competing with the lower prices that some might shut down, winnowing the playing field.