If America
truly is serious about dealing with its deficit problems, there's a
fairly simple solution. But you're probably not going to like it:
Enact a single-payer health care plan.
See, we told you
weren't going to like it.
But the fact is that
everyone who has studied the deficit problem has agreed that it's
actually a health care problem — more specifically, the cost of
providing Medicare benefits to an aging and longer-living population.
The bipartisan National
Commission on Fiscal Responsibility and Reform
reported last December: "The Congressional Budget Office (CBO)
projects if we continue on our current course, deficits will remain
high throughout the rest of this decade and beyond, and debt will
spiral ever higher, reaching 90 percent of GDP in 2020.
"Over the long
run, as the baby boomers retire and health care costs continue to
grow, the situation will become far worse. By 2025 revenue will be
able to finance only interest payments, Medicare, Medicaid, and
Social Security. Every other federal government activity — from
national defense and homeland security to transportation and energy —
will have to be paid for with borrowed money."
That being
the case — and nobody argues that it isn't — there are two broad
ways for the government to address its spiraling health care costs.
One, shift more of those costs to recipients, by trimming benefits
and/or extending eligibility ages and indexing eligibility to
personal income. This is politically unpalatable, particularly to
most Democrats, President Barack Obama being a conspicuous
exception.
The second way for
government to address its health costs is not to shift them, but to
reduce them. This is what a single-payer health care system would do,
largely by taking the for-profit players (insurance companies for the
most part) out of the loop.
The advocacy groupPhysicians
for a National Health Program
estimates that "private insurance bureaucracy and paperwork
consume one-third (31 percent) of every health care dollar.
Streamlining payment through a single nonprofit payer would save more
than $400 billion per year, enough to provide comprehensive,
high-quality coverage for all Americans."
Once everyone is
covered, the government would have the clout to bring discipline into
the wild west of health care spending. It could insist that providers
be paid for quality of service, not quantity. Health facilities and
equipment could be managed by regional boards. Medical services could
be "bundled" — rather than paying hospitals and doctors
and laboratories separately, there would be fixed prices for
treatments. And so on.
The Patient
Protection and Affordable Care Act passed in 2009 contains many pilot
programs
designed to test cost-reduction strategies. Most of them won't kick
in for another six to eight years, by which time health care costs
will be approaching 20 percent of U.S. gross domestic product. Thecombined
state and federal share
of that will be 49 percent, up from 45 percent today.
Indeed, a study
published this month in the journal Health
Affairs
estimates that while the Affordable Care Act will pay for itself by
2020, it won't actually "bend the cost curve," as the Obama
administration had hoped. But the study, done by the Actuary
Centers for Medicare and Medicaid Services,
says the ACA will significantly slow the rise of health care costs to
state and local governments.
But consider those
two findings: In effect, they say that if the goal is reducing
overall health care costs, then the ACA didn't go far enough. Thirty
million more people will be insured and government costs will grow
more slowly. But overall health care costs will continue to explode.
Sooner or later, a
nation serious about controlling spending must take broad control of
the health care system.
It surely
won't be sooner. Compared to the political fight that would erupt
over a single-payer plan, the congressional battle over the
Affordable Care Act would seem as tame as resolution praising mom,
the flag and apple pie.
The ACA was a
compromise. Mr. Obama brought everyone to the table — doctors,
insurance companies, drug companies, hospitals — and came away with
a "best we can get" kind of bill. Many of those at the
table turned around and lobbied against it or sought special favors
once the bill came before Congress.
It passed by narrow
margins, and Congress is decidedly more conservative now. Indeed,
the new House majority has voted to repeal the ACA and challenges to
its constitutionality continue to work their way toward the Supreme
Court.
But now, like a baby
discovering its toes, Congress has discovered the deficit. And the
plain fact is that unless you want to commit political suicide and
cut Medicare to the bone — as Rep. Paul Ryan's, R-Wis., budget
plan
would do — the best way to seriously address long-term deficits is
to get control of health care costs through a single-payer plan.
In 2008, when health
care costs amounted to "only" 16
percent of U.S. gross domestic product,
Great Britain was spending 8.7 percent of its GDP on health care, and
Canada was spending 10.4 percent. Both nations have single-payer
plans. Quality
of care
scores in both nations are at least comparable, and in most cases,
better.
Eventually, the
United States will have a single-payer plan. But we'll waste a lot of
money and time getting there.
