Don't Hold Your Breath for Lower Health Care Costs

posted by Penelope Lemov

Yesteday, I attended a briefing at the National Press Club here in beautiful downtown Washington, D.C.

The subject: Would the health care plans put forth by the presidential candidates put the brakes on health care costs?

The panel discussing this question was extraordinary: Uwe Reinhardt, the health economist from Princeton; Mark McClellan, who headed up CMS until a year or two ago (and whose brother is now very famous); and Paul Ginsburg, a heavy-weight thinker who is in charge of the Center for Studying Health System Change.

The quick answer to the question asked of the panel: No -- not for all the candidates' support of health information technology and access for all.

But the bigger question lurking within the ongoing discussion was whether health care would be a major issue in the coming months of the presidential campaign and whether the new president and the new U.S. Congress would be likely to tackle the issue in 2009. 

The panelists agreed that health care would fade as a major issue, overtaken by the economy and possibly by the war in Iraq. As to whether it would surface on the legislative agenda, my takeaway from things said and unsaid by the panelists: Health care reform will still be up to the states. The Massachusetts approach -- public programs for low-income people and a healthy reliance on private insurance for everyone else, plus an insurance exchange to help people sort things out -- is the model most states will follow, with their own variations.

And if Congress did address the issue, the panelists saw it as unlikely that there would be a Medicare-for-All approach. Rather, Congress, too, would look to a Massachusetts-type plan.

Comments

[Toronto life insurance broker]

Costs, costs, really - 16% of GDP is extremely huge number. On the other hand, you have sufficient capacity. I am selling optional health insurance and
ife insurance in Canada and I see rising efforts to implement private health insurance to wider area, emerging not only from insurance companies, but also from citizens, willing to pay cash for services, which are they not able to get from public system at time...
Lorne

[A skeptic of 3rd party payment method]

The reason health care is broken is three fold - lack of transperancy, lawsuits (or the threat of it and accompanying cost), and lack of number of physicians.

It takes an average of 45 days to get an appointment with a general practitioner, 90 - 120 days for specialist, and similar number for dentists.

The pricing is confusing and does not relate to actual cost of doing business or related incentives (if you want to pay immediately, it is highest cost, if it is 60 - 90 days later through an insurance it is 30 - 50% cheaper, and if you are having government pay for it 6 month later, it is 70% less). This is economic theory turned upside down.

Regarding the cost of lawsuits, according to most studies it costs over $160 billion per year in malpractice insurance, defensive medicines, and actual awards. This is a huge cost not borne by any other industrialized country there the losing party pay lawyer's bill.

These three things are the reason health care costs so much. It will not be resolved due to vested interest of trial lawyers, insurance companies, and doctors.