October 3, 2009

Dem Health Plans Fail To Deal Effectively with Cost

Health care reform is yet to substantively deal with 'gorilla in the room' - Cost. This is one of the fundamental reason why health care reform is needed. Yet no plan truly deals with this problem adequately. With the federal deficit shooting upwards and the country in the middle of a recession this only makes the need to deal with cost that much more pointed, but it does not seem to be a legislative priority.

Mort Kondracke of Roll Call explains in his article Will Reform Cut Health Care Costs? Don't Bet on It that the health care reform plans have no enforceable cost reducing measures. Cost cutting measures that are attempted rely on insurance companies, drug companies, and other health groups to keep their word and cut costs. This is at best a gamble, and not a very good one at that.
There's reason to fear that, even with reform, the nation's total outlays for health care - currently 17 percent of gross domestic product - will continue to soar, and so will federal health spending and insurance premiums.

The Obama White House promised reform would "bend the curve" of health spending - now growing 3 percent a year faster than the economy - but bills pending in Congress contain no guaranteed cost-containment measures such as a global budget, or national lid, on health spending.

According to the Congressional Budget Office, total U.S. health spending is scheduled to rise to 20 percent of the GDP by 2018, 25 percent by 2025 and 38 percent by 2050.

In May, health care stakeholder groups, including hospitals, insurance companies, doctors, drug companies and device makers, promised President Barack Obama they'd institute measures shaving 1.5 percent per year from the current 7 percent growth rate of health spending, saving $2 trillion over 10 years.

But as the journal Health Affairs observed in an issue brief in August, "these agreements are not enforceable" and, indeed, House "reform" legislation would free doctors from any reductions in Medicare reimbursements.

It's no wonder the American Medical Association supports the House bill, H.R. 3200. The Senate Finance Committee bill gives doctors just a one-year break from scheduled fee reductions, but past patterns are that Congress annually saves doctors from any cut.

Another group promising cuts - and now supporting Obamacare - is the Pharmaceutical Research and Manufacturers of America.

Its contribution to controlling health care costs? Just $80 billion over 10 years - out of total U.S. pharmaceutical outlays of $3.3 trillion.

And, as Fortune magazine pointed out, part of PhRMA's cuts are designed to get more Medicare recipients to use brand-name drugs when generics actually would be cheaper.

According to Health Affairs Editor-in-Chief Susan Dentzer, "bending the curve" of health cost growth depends upon "a lot of floating magic asterisks" in the Senate legislation, including the transformation of several pilot projects into actual policies that alter health spending patterns.

Purple People Vote

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