Saturday, September 18, 2010

Magnitude of the Health Care Enterprise, and Efforts to Reform It

In the heat of the health reform debate, we overlook the size of the enterprise. You cannot turn around the Queen Mary on a dime. We will not be able to turn around the American health care system, now $2.5 trillion, or the American economy, now $13 trillion, on a dime.

A September 13 USA Today editorial puts it in perspective. The editorial contains this chart, based on government data projecting ahead to 2019.

1. Total health spending

Without reform, $4.48 trillion
With reform, $4.57 trillion

2. Federal health spending

Without reform, $1.73 trillion
With reform, $1.73 trillion

3. Spending per person

Without reform $13, 387
With reform, $13,652

4. Spending per insured person

Without reform $16, 120
With reform $14,729

5. Percentage of people insured

Without reform, 83%
With reform 92.7%

One can argue about reliability of these projections, their political bias, and reform alternatives, and many people have.

- Jonathan Cohn of the New Republic, a liberal magazine, in “ ‘Repeal and Replace, ‘OK, with What?” (September 17) says any Republican plan would cost more and cover fewer.

- Former New York Governor Pataki in the same USA Today claims Obamacare has misled the American people about costs (Over $1000 more per year according to the OMB), changes in policies (66% of workers in small businesses will be forced to change policies to meet federal standards), cuts in Medicare benefits (removal of Medicare Advantage plans to meet target of $575 billion cuts in Medicare), and higher taxes, penalties, and fines for employers (the uncertainties of which would presumably keep them from creating new jobs).

Small wonder, then, that:

- the public is divided on the new health reform law, which 56% currently oppose.

- critics are skeptical given the government’s past record of vastly underestimating and controlling entitlement costs.

- People are wary about $500 billion in new taxes required by the law.

- Skeptics point out the spike of uninsured from 47 million in 2008 to 51 million today has fueled further skepticism about the wisdom of government spending to reform care.

- Employers are dropping coverage because of fright over costs, complexity, and risks of reform.

- Government reformers are tying everybody in the health care sector in regulatory knots as they try to sort through the maze of coming regulations.

- State officials are resisting impossible-to-pay-for mandates imposed on nearly bankrupt states by expanding their Medicaid populations by 16 million.

- Many physicians are considering dropping Medicare and Medicaid patients because low federal reimbursements make it difficult for them to maintain and sustain their practices.

These may all be short-term, passing events, that will correct themselves when the economy rebounds. And certainly reforms covering 30 million more citizens and those with pre-existing illnesses are worthwhile, even noble, goals.

But the American people, 40% of whom support the Tea Party movement, 72% of whom distrust Government, and even more of whom are wary of our growing $4 trillion national debt and runaway federal spending without tangible results , are restless, even rebellious. They are already voting for radical changes in political leadership and in national spending policies.

The U.S.S. Titanic will not turn on a dime. Many on board seem to think she is taking on more water and debt than she can handle.


Anonymous said...

Those numbers are nonsense. They were manufactured by capital D Democrats at USA Today in order to promote health care reform to the public.

And I don't say liberal media, I say Democrat media, as in, the sector of the media that exists as a direct organ of the Democratic party and publishes its propaganda.

Richard L. Reece, MD said...

You may be right. The numbers come out of the government, which is making projections to fortify the Democrat case for reform. The Republicans, Tea Partiers, and conservative critics aren't buying these soft numbers.

Kim said...

That's right, I think it should be gradually but must be followed if the ideology is good, hopefully this happens and we can get the health care substantially improved.