Yesterday’s Special Report with Brit Hume had good fun with President-elect Barack Obama’s nominations to head-up health reform. After Fred Barnes suggested that universal health coverage would only increase costs, Charles Krauthammer chimed in with his own unique analysis of Obama’s health care plan.

Using smoking cessation programs as an example, Krauthammer explained that while Obama’s focus on preventive care was “a nice thing, it doesn’t save money”:

The biggest preventative healthcare success in American history is the reduction in smoking. What happens instead of dying young if you smoke, you die older, spending years in a nursing home, and the costs end up higher. I’m not in favor of dying young, but it’s more expensive if you live longer. If you die of a heart attack at 50, that’s awful, but it’s cheap. If you live into your 80′s, you will end up with Alzheimer’s or cancer or a chronic disease that’s expensive.

Watch it:

Krauthammer’s argument is this: if people forego preventive care, they will become sick and die, sparing the country the costs of long-term care. But between diagnosis and death lies treatment of chronic diseases, on which we spend the great majority of our health care dollars.

As the Campaign for Tobacco Free Kids points out, tobacco use adds billions to the national health tab:

- $97 billion: Productivity losses caused by smoking each year.

- $96 billion: Total annual public and private health care expenditures caused by smoking.

- $30.9 billion: Annual Federal and state government smoking-caused Medicaid payments.

- $27.4 billion: Federal government smoking-caused Medicare expenditures each year.

- $4.98 billion: Annual health care expenditures solely from secondhand smoke exposure.

Krauthammer blames rising health care costs on defensive medicine and “trial lawyers,” suggesting that “the way to save money in healthcare, the most immediate and effective, is to eliminate defensive medicine.” “I was a chief resident 30 years ago and a lot of our tests are entirely unnecessary and are a way to prevent lawsuits. The Democrats will never do that because of their dependence on the trial lawyers,” he explained.

Research indicates that “defensive medicine” does affect spending, but only to a point. The Congressional Budget Office concluded that malpractice costs amounted to less than 2 percent of overall health care spending in 2002. Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent.

In fact, the larger potential for true reform is in the area of better quality of care and more equitable compensation of those suffering large losses, not reduced health care spending.

Yesterday on Fox News Channel, Fred Barnes of the Weekly Standard argued that universal health care reform would not contain health costs in the long run:

But there was another whopper in there, and I’ll read it too you. He said his plan pays for itself over, say, a ten-year period, so that we’re actually saving money over the long term. In other words, we’re going to insure all the uninsured, and they’re going to have better healthcare. In other words, you’re going to get a lot more for less. Now, does anybody who can tie his shoes believe that? I don’t think so! Come on! That’s ridiculous. We’re going to save money. There’s going to be a lot more for you, but it will cost a lot less.

Watch it:

The short answer to Barnes’ question is ‘yes.’ Plenty of independent, self-sufficient shoe-tiers believe that if we bring everyone into the health care system, we could better manage preventive care and chronic diseases and eliminate the cost shift from the uninsured to the insured.

A third of all Americans have a chronic condition. We spend about $1.2 trillion a year, or approximately two-thirds of all national health care spending, on managing these diseases. If heart disease, cancer, stroke, chronic obstructive pulmonary disease could be prevented, the American health care system would save billions of dollars. (If every diabetes patient received the appropriate primary care for their condition, for example, then national health care spending would fall by $2.5 billion).

So by covering everyone, we can ensure that Americans have access to preventive care that saves literally billions “over the long term.” As Chris Jennings explained at a recent CAP health event, “the uninsured and the underinsured and their challenges have to be addressed not just because of the moral blight on our country, on our history, on our record… but frankly it’s a necessary condition to make our health care system more efficient“:

If people go in and out of the system you can neither prevent that problem nor can you coordinate the disease [management] well if you don’t have coverage.

The uninsured are also contributing to the nation’s health care bill. While they do pay for a significant amount of their care at retail rates, a Families USA study found that uncompensated care for the uninsured contributes an average $922 to family health insurance premiums. In the wake of the economic crisis, a growing number of Americans are also skipping preventive care and doctors visits, only adding to the country’s health care tab and driving up health care costs.

As President-elect Barack Obama suggested yesterday, rather than asking if we can afford to reform the health care system during “this moment of economic challenge,” Barnes should be wondering “how can we afford not to?”