View from Washington – Too Important Not to Do

Americans want health reform, but a major overhaul may not be their preference

Public perception about health reform is changing. Granted, the majority of Americans do say they want a different type of healthcare system. Clearly, expectations of a return to an era of lower prices for healthcare are running into the reality of the complicated nature care is delivered today. It now appears the American public is becoming increasingly alarmed about the potential cost of the health reform proposals under discussion in Washington. So here is a question. What if a major overhaul of the health system politically fails?

In the mid-1960s, President Johnson – who knew a thing or two about cracking heads – put each arm on the shoulders of the presidents of the American Hospital Association (AHA) and the American Medical Association (AMA) and reportedly asked “Boys, don’t we want to do something about healthcare for the elderly?” At that time, America was spending about 5 percent of the gross domestic product (GDP) on healthcare. As 2010 approaches, America is projected to spend in excess of 17 percent of GDP on healthcare. It is a troubling amount of money when compared to other countries, which cover their entire populations and in some instances have better quality outcomes than the United States.

Facts, nevertheless, can be troubling things. If you look at the data when President Johnson put the figurative – if not literal – squeeze on the AHA and the AMA in the 1960s to enact Medicare and Medicaid, the average American household spent 53 percent of their disposable income on food, shelter, energy, and health care. According to researchers, the proportion of household spending today has hardly changed at 55 percent. While healthcare costs have been escalating faster than the other components, the fact is the relative cost of the other three components have actually been decreasing. One economist explained that this phenomenon is partly because society has on average become richer in the last 50 years. Said another way, as income increases, more is spent on healthcare. Another economist observed “healthcare – for most of society – is the ultimate luxury good.” And, who says economics is the dismal science?

Where credit is due
Despite the quality problems which are under the microscope in Washington right now, not much credit is given to the overwhelming competence of healthcare providers. As an example, on a recent tour of a hospital in Minneapolis, I noted with great satisfaction a sign in the patient lobby area reporting the hospital had not had a single “adverse patient event” in over three years. This at a hospital which does over 20,000 surgical procedures a year! Compare that kind of success rate to another industry. To Americans of the 1960s, our biomedical and technological capabilities in healthcare today would seem like science fiction. For the overwhelming majority of patients, our healthcare system provides remarkably successful care.

Clearly the desires of the public for a new economic paradigm for healthcare and the realities of what healthcare actually cost, are in opposition. This is because the real cost of healthcare is masked because most of individual healthcare today is paid for by someone else (government, employers, insurance companies, etc.) Under such an arrangement, most people are disassociated with the actual cost of their healthcare. This is unlike the majority of all other economic decisions made by the public every day. Some argue that until the tax exclusion for health benefits is changed, Americans will continue to be desensitized to the cost of care. This is why such policy proposals are under consideration in Congress today.

Less than willing
After falling all over themselves in the face of President Obama’s health reform juggernaut, fiscal conservatives and some moderates of both parties are beginning to coalesce around an important message. With healthcare reform cost estimates from the highly respected and non-partisan Congressional Budget Office (CBO) putting the current reform proposals before Congress between $1 and $3 trillion of additional spending over the next decade, the political momentum for reform is slowing noticeably. To buttress support in the Senate, where any real reform bill will be written, some liberal and progressives have begun to savage moderate Democrats who have expressed alarm at the cost of reform. An old political wag observed “Looks like some of the ‘Coalition of the Willing’ may not be so willing after all.”

When the financial crisis hit in full force at the beginning of this year, the message from the White House was “certain” financial and automotive organizations were “too big to fail.” Despite unprecedented financial interventions by the U.S. government, the recession of 2009 continues. In the midst of this severe economic downturn, other major policy initiatives are being simultaneously pressed by President Obama – initiatives like climate change and reform of the U.S. educational system, to name a few. On healthcare, Obama has linked the very economic future of the country to an overhaul of the healthcare system. Reportedly, the President told a group of healthcare committee chairman that enacting health reform was “too important not to do.” Additionally, reports say the White House has indicated health reform must happen despite the rising cost impact gloom from the CBO.

The public and some in Congress are waking up to the astronomical cost of the health reform proposals under consideration. The multi-trillion dollar impact these proposals will have on the deficit has been sobering, to say the least. American sentiments about health reform are changing. The President may think health reform is “too important not to do.” A growing number of Americans – and some who represent them in Washington – are begging to differ. At this time, systemic health reform may be necessary, but the hard reality may be that incremental reform paced over several years is the only possible course forward.

Robert Betz Ph.D. About Robert Betz Ph.D.

Robert Betz, Ph.D., is president of Robert Betz Associates, Inc. (RBA), a well-established federal health policy consulting firm located in the Washington, D.C. area. Additionally, Dr. Betz is an adjunct professor teaching at The George Washington University where he specializes in political science and health policy. For more information about RBA, visit www.robertbetz.com.

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