Thursday, October 15, 2009

Cost, Such an Inconvenient (And Convenient) Word

Earlier this week, the Sen. Finance Committee passed a health care reform bill introduced by Sen. Max Baucus, D-Mont., the Committee’s chairman. The passage follows an alternative bill passed by the Senate Health Education Labor and Pensions Committee in July. The bills must now be melded into a new bill. The House is also working to blend several bills.

Good news, right? Well that depends on whom you ask. While in theory everyone is on board with health care reform, cost is a word that keeps creeping into the debate. This is a fair enough issue to raise. Do we want to saddle ourselves and our children with the burden of paying huge tabs for more comprehensive health care? Well, no.

But it is also fair to examine cost in a couple of different ways.
First, as many in the debate are raising, is the issue of dollars and cents.
America’s Health Insurance Plans, Washington, delivered sticker shock findings of a recent PricewaterhouseCoopers report which found that a family policy today with an average cost of $12,300 will rise to:
• $15,500 in 2013 under current law and to $17,200 if these provisions are implemented.
• $18,400 in 2016 under current law and to $21,300 if these provisions are implemented.
• $21,900 in 2019 under current law and to $25,900 if these provisions are implemented.

Labor, who you would think would be squarely behind reform, is arguing that at least as far as the Baucus proposal is concerned, the measure would tax the average person imposing a 40% excise tax on insurers of employer-sponsored health plans. Affected plans would be those with benefits of over $8,000 for individual coverage and over $21,000 for families.

But the White House has a few bullet points of its own that emphasize health care savings. It argues that its plan:
• Won’t add a dime to the deficit and is paid for upfront. The President’s plan will not add one dime to the deficit today or in the future and is paid for in a fiscally responsible way. It begins the process of reforming the health care system so that we can further curb health care cost growth over the long term, and invests in quality improvements, consumer protections, prevention, and premium assistance. The plan fully pays for this investment through health system savings and new revenue including a fee on insurance companies that sell very expensive plans.
• Requires additional cuts if savings are not realized. Under the plan, if the savings promised at the time of enactment don’t materialize, the President will be required to put forth additional savings to ensure that the plan does not add to the deficit.
• Implements a number of delivery system reforms that begin to rein in health care costs and align incentives for hospitals, physicians, and others to improve quality. The President’s plan includes proposals that will improve the way care is delivered to emphasize quality over quantity, including: incentives for hospitals to prevent avoidable readmissions, pilots for new "bundled" payments in Medicare, and support for new models of delivering care through medical homes and accountable care organizations that focus on a coordinated approach to care and outcomes.
• Creates an independent commission of doctors and medical experts to identify waste, fraud and abuse in the health care system. The President’s plan will create an independent Commission, made up of doctors and medical experts, to make recommendations to Congress each year on how to promote greater efficiency and higher quality in Medicare. The Commission will not be authorized to propose or implement Medicare changes that ration care or affect benefits, eligibility or beneficiary access to care. It will ensure that your tax dollars go directly to caring for seniors.
• Orders immediate medical malpractice reform projects that could help doctors focus on putting their patients first, not on practicing defensive medicine. The President’s plan instructs the Secretary of Health and Human Services to move forward on awarding medical malpractice demonstration grants to states funded by the Agency for Healthcare Research and Quality as soon as possible.
• Requires large employers to cover their employees and individuals who can afford it to buy insurance so everyone shares in the responsibility of reform. Under the President’s plan, large businesses – those with more than 50 workers – will be required to offer their workers coverage or pay a fee to help cover the cost of making coverage affordable in the exchange. This will ensure that workers in firms not offering coverage will have affordable coverage options for themselves and their families. Individuals who can afford it will have a responsibility to purchase coverage – but there will be a "hardship exemption" for those who cannot.

To look at cost as just dollars and cents is too narrow an approach. I think the more realistic and valuable way is to look at cost as a broader issue and to incorporate opportunity cost and reputational cost as well as the cost to the economy.

If everyone is truly on board with health care reform that will give people access to care and not just offering lip service, then there must be a willingness to look at opportunity cost. We are probably the closest we’ve ever been to having meaningful reform to our system. There are people who have fallen through the cracks or at risk of falling through the cracks. How much longer are we going to wait before we take action? The moment is now. If we don’t seize it, it might be years before we come close again. We can’t wait.

And, if pure reason can’t move us (and if it can’t, that is a sad commentary on our state of affairs,) then maybe vanity can. We are paying a high price in terms of reputational cost. How can we say we are a leader among nations when so many of our citizens are uninsured and many more risk being uninsured? How do you define ‘leader among nations?’ If we continue to let our people go without basic care, we are certainly not a leader when measured by compassion or common decency. We’re fooling ourselves. We believe our own press releases.

So, the next time you hear cost being used as a reason to oppose health care, be expansive and think beyond dollars and cents. Reality is far broader.

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