Obama strategies - Reform: One Man's Meat in Another Man's Poison

There is no easy way to pay for comprehensive health care reform. Congressional leaders reacted coolly to the Obama administration’s proposal that reform be funded partly by reducing itemized deductions and mortgage interest) for higher income persons. All the funding options contain various levels of political poison.

Jonathon Oberlander, PhD, “Picking the Right Poison – Options for Funding Health Care Reform, “ New England Journal of Medicine, May 14, 2009

It’s become clear combinations of options to fund 30 million uninsured Americans may not be there, and reformers may have to retreat from universal coverage. No solid evidence exists that health information technologies, pay-for-performance systems, and medical homes save much money, and the other options to raise the requisite money to cover Obama’s promises are questions of one’s man’s meat and another man’s poison.

Funding Options

• End income tax exclusion on employer sponsored health insurance.

Pros - Could raise $52 billion and would build on current employer based system.

Cons – Controversial. A political U-Turn. Obama opposed this in campaign while McCain supported it. Business, which provides coverage for over 250 million workers, conservative politicians, Democrats and Republicans alike, and workers themselves would oppose.

• Raise “sin taxes” on cigarettes, alcohol, and sugar sweetened beverages.

Pros - Could bring in $205 billion to federal coffers. Would have side benefit of preventing disease and improving health.

Cons – Could be politically counterproductive. Americans don’t like moralizing or meddling into their personal lifestyles. May work for paying for children (SCHIP) but not for 50 million uninsured. Could lead to taxes on fast foods and transfats, and anything else perceived to harm health.

• Impose employer mandates of $500 per employee to those businesses who don’t offer coverage.

Pros – Could bring in $45 billion but would cause wrath among small business owners who already can’t afford coverage.
Cons - Would infuriate business community, particularly small business, who already are having a hard time competing globally and who already can’t afford coverage for employees.

Long-Term Options

So much for the short-term options. It may be in the long-run, i.e. over the next decade, Congress could save money by funding medical homes, comparative effectiveness research, paying hospitals on basis of quality, reducing payment to high-spending geographic areas (like NYC, Boston, Miami, LA), reducing payment for high tech procedures, establishing competitive bidding for Medicare Advantage plans, and paying hospitals and doctors less- but these measures could create backlash by reducing care availability, producing longer waiting lines, closing hospitals and driving doctors out of practice.

Even if everything goes according to Obama's plan, e.g. a public plan to compete with private plans with Medicare rates for public plan members, there will be the question of who will provide the care. The shortage of doctors and nurses grows daily and unlikely to be remedied soon by armies of physician assistants, nurse practitioners, or nurse doctors.

Still, I’m optimistic. America is a resilient nation, and Americans are a sensible people. We live in the best of all possible countries. Something will turn up that we can afford. In the end, Americans will come to their senses – and to consensus