Health Care Reform is the most significant effort at cost control in a generation, if not ever.


By Joe Campbell
November 18th, 2009

[digg-reddit-me]Once health care reform passes, the White House has signaled it will begin to focus more specifically on the deficit. (Also, on jobs, cap and trade, and financial regulation.)

But as the Obama administration presented it initially: Health care reform is deficit reduction. (Ezra Klein, health care policy wonk, blogger, and columnist for the Washington Post, has been making this case all along, as have many other technocratic types and policy wonks and health care experts.) That’s why Peter Orszag made the phrase, “bend the curve” into a buzzword, referring to the attempt to bring down the rate of growth of health care spending. Here for example is a graph of our projected budget deficit as a percentage of GDP based on current growth rates, lowering those growth rates, and adopting measures to have Britain-like growth rates:

While any bill that might get past Congress at this point won’t live up to the early wet dreams of policy wonks (It won’t even bring us to the level of the blue line in the above graph), it would – to quote Ezra – still “represent the most significant effort at cost control in a generation, if not ever.” (my emphasis.) (He specifically refers to three provisions in the Senate Finance Committee bill: the excise tax on high-cost insurance plans; the newly empowered Medicare Commission; and various delivery-system reforms.) In fact – again according to Ezra – the “health-care reform bills currently under consideration in both the Senate and the House actually cut money from the deficit.” Despite this, the same Republicans (often the exact same individuals) who 6 years ago cast “a vote to add about $400 billion to the deficit in the first 10 years, and trillions more in the decades after that,” with Medicare Part D are now criticizing the current bill which would decrease the deficit as “fiscally irresponsible.”  Ezra:

It’s like watching arsonists calling the fire department reckless.

This constant obstructionism by the Republicans – on both matters of fiscal stimulus and health care – is gradually eating away at the public will to act and is therefore undermining confidence in America’s economy and long-term fiscal situation, and by undermining this confidence, making a disaster more likely. Noam Scheiber of The New Republic describes how the struggle to enact meaningful health care reform is a concern for the largest holders of American debt, the Chinese:

To his surprise, when Orszag arrived at the site of the annual U.S.-China Strategic and Economic Dialogue (S&ED), the Chinese didn’t dwell on the Wall Street meltdown or the global recession. The bureaucrats at his table mostly wanted to know about health care reform, which Orszag has helped shepherd…”At some point, if you refuse to contain health care costs, you’ll go bankrupt,” says Andy Xie, a prominent Shanghai-based economist, formerly of Morgan Stanley.

The efforts at cost control proposed by the Democrats might fail, as Republicans suggest. But it is irresponsible not to try, and to obstruct any attempts to try. Republicans have begun to demagogue the bills before Congress both for cutting Medicare and for increasing the amount of health care spending. They are not willing to give the Democrats any political cover to take any fiscally responsible measures. This partisan refusal to work towards solving long-term problems has been the key to Republican successes from 1994 to the present. (Not so for the Democrats, many of whom joined George W. Bush in passing his No Child Left Behind act, his tax cuts, and his Medicare Part D bill, but undoubtedly, both sides bear some blame.) This has created a political culture in which Washington has two directives:  “spend money on things I like and don’t raise my taxes.” This isn’t solely a Republican problem. It is more that the Republicans, by remaining stubbornly united, have made these flaws evident. Klein again:

The issue isn’t that some storm will unexpectedly slam into the economy and there will be nothing anybody can do, but that the storm will hit and Congress will choose to do nothing

The biggest danger America faces is not rising health-care costs or global warming or the budget deficit. It’s the political system’s inability to act on these issues, even though the solutions are generally quite clear.

Take a moment and read the articles linked to – especially the three Ezra Klein posts from the past two days. (On the Senate Finance Bill’s cost control measures; On Medicare Part D; and On Our Political System’s Inability to Act.)

Keep in mind that Obama’s proposals are not “radical leftist” but essential and moderate tinkering that incorporates Republican as well as Democratic ideas. The Tea Party-ers may be outraged at the imaginary specters of death panels and government-mandated abortion. But it is the rest of us who should be outraged at the inability of our political system or our politics to address these long-term issues responsibly.

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3 Responses to “Health Care Reform is the most significant effort at cost control in a generation, if not ever.”

  1. Marti Guynup Says:

    The Federal Government is killin’ me. Why can’t the entire nation get that this monster of a bill will drive up taxes for everyone and even invent new ones for us all?

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