During today’s Senate Budget Committee hearing with Treasury Secretary Timothy Geithner, Sen. Judd Gregg (R-NH) argued that the administration’s investment in health care reform was a “massive expansion of the government”:
You’re adding another $664 billion in your budget, which you say is a down payment on the entitlement accounts relative to health care, which is probably a downpayment that’s only about half of what you’re really calculating — it’s probably closer to a trillion, a trillion-two. So you’re exploding the size of health care spending on top of health care spending which already exceeds any other industrialized country in the world by about 5 percent. So there’s no discipline there. In fact, there’s a massive expansion of the government.
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Gregg is right about the Obama administration’s view of entitlements. As Peter Orszag argued during the administration’s fiscal responsibility summit,”health care reform is entitlement reform. The path of fiscal responsibility must run directly through health care.”
Since the rising cost per beneficiary is responsible for most of the fiscal problem, you can’t stabilize the economy without lowering the costs of health care, and you can’t lower health care costs without investing in the system.
I — I don’t want us to wind up getting universal coverage, which is morally imperative and necessary, and not do enough preventative and primary and cost control changes about the way the system is organized to bring our costs in line with our competitors. Because if we are 5 points of our GDP more on health care than any of our competitors and we’re getting no better results, now we get worse results. But if we get no better results, then it will weaken our economy over the long run and we won’t be able to afford the system. So his problem — the challenge is going to be not the coverage challenge, which is what all of us from Theodore Roosevelt through Bill Clinton faced. It’s going to be the cost challenge.
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Most of the major stakeholders — the insurance lobby, the business groups, the unions — understand that we can’t expand coverage without controlling costs. In fact, just today, the Business Roundtable — which opposed Clinton’s health reform plan — released a new report that says “Americans in 2006 spent $1,928 per capita on health care, at least two-and-a-half times more per person than any other advanced country.”
The report compares “statistics on life expectancy, death rates and even cholesterol readings and blood pressures,” factors the measures together with costs “into a 100-point ‘value’ scale’ and concludes that “the United States is 23 points behind five leading economic competitors: Canada, Japan, Germany, the United Kingdom and France.”
In 2009, businesses are at the table, making the argument that health care reform will lower the costs of the system, spread the costs across the different stakeholders and make the United States more competitive. The Roundtable doesn’t want to abandon the employer-based system — large companies use health benefits to entice better workers — they just want to lower the costs of providing coverage.
Obama stressed the importance of controlling costs during the White House Health Summit, and all of the leading health care policy makers agree. Everyone believes that we must invest in prevention, care coordination, and health information technology (to control heath care costs), the trick will be to force the insurance companies to take a haircut and agree to a new public plan, or get the business groups to okay a mandate (individual, employer, combined).
