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Is health reform possible in this economy?
The financial crisis roiling Wall Street and Main Street will make wide-ranging health reform all but impossible next year and perhaps for years to come.
So warn a growing number of policy analysts, including Joseph Antos, the Wilson H. Taylor scholar in health care and retirement policy at the American Enterprise Institute, a conservative think tank.
I asked Antos if he thought the presidential candidates leveled with the American people this week during their debate when they were asked about health reform.
No they didn’t, he responded.
If Sen. Barack Obama was honest, Antos suggested, he’d have to say something like this: “We have major problems in this country. Health care is only one of these problems. And we have very tight circumstances next year and possibly for a number of years to come, given what’s happening in the economy. We still need to do something about health care. But that vision of getting everyone insurance, everyone getting coverage as good as your congressman’s – that’s not possible right now.”
If Sen. John McCain leveled with voters, he’d have to admit his health plan would be extremely expensive to implement – almost as costly as the Obama plan – and that it, too probably isn’t affordable during an economic downturn, Antos said.
A recent report from the Tax Policy Center prices the McCain plan at $1.3 trillion and the Obama plan at $1.6 trillion over a 10-year period.
I asked Antos to focus on Obama’s health proposals since I’ve spent a disproportionate amount of time writing about the McCain plan this week. (For those posts, check 2008 Elections.) It’s a subject he analyzes in the upcoming issue of the New England Journal of Medicine, one of the world’s foremost medical journals.
First off, voters need to know that none of the health care cost containment strategies that
Obama is promoting will produce immediate savings, Antos said. These include disease management, evaluating the effectiveness of medical technologies, a renewed focus on prevention and the wide-scale adoption of health information technologies. (McCain is promoting many of the same strategies.)
Instead, it’s likely all these measures will require significant upfront investments before they begin to yield significant savings, Antos said. And funding for those investments – many billions of dollars’ worth – will be difficult to find given the steps the government is taking to try to stabilize the economy.
Even if funding wasn’t an issue, it’s highly unlikely that substantial health care cost reductions will materialize any time soon. “These strategies will take a long time, and certainly you won’t see anything major during the first term of an Obama or a McCain presidency,” Antos predicted.
For his part, Obama has predicted his plan will yield $200 billion in annual savings – a figure that Antos believes isn’t achievable. (Health care spending comes to about $2.2 trillion annually, currently.)
“You can find lots of studies in the academic literature about all the things [Obama] wants to do. And the conclusion is, unfortunately, that in some basic way we don’t know how to do these things yet. Especially, the patient management ideas that everyone is throwing around,” the analyst said.
Nor can Obama make good on his promise that families will see an average $2,500 reduction in health insurance premiums if he wins the presidency, in Antos’ view. That would only be possible with massive subsidies from the government – another pie-in-the-sky prospect, given current economic realities, he said.
What then is possible, I asked?
“I think you’ll see Congress reauthorize the State Children’s Health Insurance Program next year and perhaps look at expanding coverage for parents as part of that package,” Antos said. “But that’s going to have to be paid for out of the health sector; there isn’t going to be any extra money lying around” in the federal budget.
“Beyond that, I think there will be opportunities to make prudent investments in the infrastructure of the health care system that generate smaller but meaningful improvements,” he continued. “People should not have overly ambitious expectations.”
Of course, Antos’ views are far from universally shared. Obama’s health care advisers confidently assert that government interventions will help bring order to the chaotic health insurance market, create new choices for consumers and bring costs under control. Other economists claim that rising health care costs will make far-reaching intervention of some kind virtually inevitable.
To hear the candidates’ arguments spelled out in detail by their leading health care advisers, check out two new Webcasts sponsored by the Kaiser Family Foundation. Click here for a moderated discussion with Obama’s adviser, David Cutler, a professor of applied economics at Harvard University. Click here for a discussion with McCain adviser Jay Khosla.
Judith Graham, 10.10.08, chicagotribune
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