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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (134306)	3/23/2010 9:33:31 AM
From: JohnM	Respond to of 543134

Ezra Klein has this interview with Uwe Reinhardt. He's definitely one of the true experts on hcr. ----------------------------- Uwe Reinhardt: We are not 'off the hook' on costs Uwe Reinhardt is a Princeton health-care economist, a longtime member of the Institute of Medicine and a frequent contributor to the New York Times Economix blog. I spoke to him earlier today about the cost controls in the bill. The CBO says this bill will save more than a trillion dollars. Should we believe them? Well, the CBO’s numbers, these poor guys have to guess, and this is the best they can do with a messy bill. By and large, this bill tries to pay for itself, and a little bit more. They’re carving out $500 billion from Medicare. There are genuine, real taxes on high-income people, particularly the broadening of the tax base for Medicare. When you think about cost, there are two questions: What does it do to the deficit, and what does it do for national health spending? The bill does not necessarily do much for national spending. But it puts in the architecture that would make it possible, if we wanted to have cost containment, to do it rationally. That’s the program on bundling payments, the research on comparative effectiveness and the Medicare Commission. All of that needs to be done. And if it is done, this bill makes it possible for someone willing to control costs to do it and have the evidence to defend it. This argument that the bill is a start on cost control – is it an argument or a rationalization? Do you need to build this infrastructure before you control costs, or is this just putting the hard decisions off till later? I think it’s necessary. When McAllen, Texas, became the poster child for high spending, suddenly the Wall Street Journal jumped out to say that it’s spending was justified! The only way to answer that is to have the really good research to say this isn’t justified. So we need this research to be able to tell Miami that they’re not going to get three times as much as Minnesota in the future. At the moment, we don’t have the evidence to make that case. Health-care reformers say that you can’t get reform if you slap the providers in the face. They have to buy in. If you tried to do what the Clintons did and tell hospitals and doctors that this reform will make them poorer, that’s the kiss of death. Even the pope couldn’t cut health-care costs in the short run. It’s a 10-year strategy. How about the cost controls on the insurance side? Things like the exchanges, the excise tax. Are you optimistic this will work? I’m very optimistic on the exchanges. Think of how insurance is sold. Some insurers say they need to burn 40 percent of their premiums on administration and advertising and brokers. Imagine telling another country that America’s insurers need to be able to burn 40 cents of every dollar. That’s going to end in the exchanges. And that will save a lot of money. And the excise tax? There’s an assumption that that will move people out of such generous policies and increase take home pay. I’m an economist. When I teach students, I believe this stuff. But I have my doubts that it will work. I would have liked to see a tax on the place of work rather than the insurers. I would have said if you make less than $75,000, you don’t pay any tax. If you make between $75,001 and $199,999, you pay taxes on some of the insurance. And if you make above $200,000, the whole thing is taxed. So what comes next? If this is the first step, what should the second step be? This thing will not get us off the hook cost-wise. But it’s a bit like moving into a house. You’ll spend another half year having workmen come fix the house. The individual mandate, for instance, is not good enough. You could still have young people pay the fine, and you’ll get the death spiral. I think they should have a window, if you enroll now, you’re in the club. But if you don’t enroll now, if you decide to play the adverse risk selection game, then if you try to reenroll, you can be discriminated against for health status. By Ezra Klein \| March 22, 2010; 6:43 PM ET voices.washingtonpost.com