Politics

At What Cost?

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Negotiations over health care reform screeched to a halt late last week when 40 centrist Democrats--members of the House Blue Dog Coalition--signed a letter saying they could not support the House’s emerging legislation without significant changes. Their major complaint? They said the House bill would not do enough to bring down health care costs and, by extension, limit the taxpayers' liabilities. Without more changes to reduce the cost of medical care, they warned, it would be unwise to back massive expansions of insurance coverage. "We cannot simply 'add' new consumers to a broken system," the letter said.

The Blue Dogs get a lot of grief from liberals like me, who accuse them either of protecting special interests or posturing for personal political gain. But to be fair, they may be raising some legitimate questions. Among other things, the Blue Dogs back a provision to hand more authority over to the Medicare Payment Advisory Commission (MedPAC)--an idea that the House bill doesn't include, but has support from the White House and plenty of liberals, like Senator Jay Rockefeller, D-W.Va., because it has potential to help make Medicare a more efficient program.

But let's leave those matters aside for a moment and consider that one, key sentence--about the folly of adding new consumers to a "broken" system. It's a common theme in health care reform discussions--that it'd be wrong simply to expand insurance coverage if, first, we don't wring out the system's inefficiencies, get rid of all the wasteful medical treatments and get costs under control.

Some people making this argument are basically using it as a dodge. It's a way to appear high-minded while opposing health reform, something they simply don't like for various ideological or parochial reasons. Others honestly believe that giving everybody insurance, in the absence of other reforms, would be simply wrong. That's a defensible position--but also, I would argue, the wrong one.

For one thing, the very act of expanding insurance coverage should help make the system more efficient and, as such, relatively less expensive. This may seem paradoxical, since that requires spending more government money. But it makes perfect sense if you understand the dynamics of the health insurance market and health economics.

If there's one thing we know about medical care, it's that consistency and stability lead to better, more effective treatments. The reason places like the Cleveland Clinic or Group Health of Puget Sound can offer such good care for so much less money is that they see the same patients year after year--and that the patients, in turn, are part of one system in which medical providers communicate with each other and share information.

But continuity is the exception today in American health care, not the rule. With no guarantees of coverage and no uniformity of what coverage looks like, people are constantly switching insurance plans and, in many cases, losing insurance altogether.

Simply extending coverage to the entire population goes a pretty long way toward rectifying that problem. So does setting up "exchanges," the government-regulated marketplaces through which people can shop intelligently and figure out which insurance plans provide the sort of care people at Cleveland Clinic or Group Health get.

In the long run, of course, the key to improving the quality of health care and controlling its cost lies in reducing the use of expensive treatments that are unnecessary or even harmful. We have some pretty good ideas about how to accomplish this: collect, and then publish, more information about which treatments work and which ones don't; change reimbursements, first through Medicare, to reward good outcomes and best medical practices.

Putting these policies into practice takes political strength, since every effort to change the way we pay for medical care will, inevitably, take money out of somebody's pockets. But expanding coverage doesn't make this harder. On the contrary, it makes it easier. Just look at Massachusetts, a state that a few years ago passed major reforms and now has brought insurance to about 97 percent of its population. Now that everybody has coverage--and, no less important, everybody is on the hook for some share of financing medical care--there's new political momentum for trying to reorganize the delivery of care in Massachusetts and finally do something to bring down costs.

This doesn't mean expanding coverage is guaranteed to make real cost control possible. The truth is, we can't be 100 percent certain even the boldest delivery reforms will keep medical costs from spiraling out of control. But suppose the worst happens--suppose that, after making insurance coverage universal, we haven’t fixed the cost and quality problems. Will be worse off than we are now?

I don't think so. Even if medical inflation is still out of control--even if we're still paying for a ton of what author Shannon Brownlee calls "Overtreatment"--we'd still have given economic security to tens of millions of people. They wouldn't have to fear that illness, or a lost job, would force them into financial ruin; nor would they have to forgo health care at times of crisis, risking medical calamity in order to pay the mortgage. That'd be a major accomplishment, as important and sweeping as any domestic policy move in decades.

Make no mistake: It'd be a huge disappointment not to make progress on cost and quality. But incremental progress is still progress.

Jonathan Cohn is a senior editor of The New Republic. This column is a collaboration between TNRand Kaiser Health News. KHN is an editorially independent news service and is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization, which is not affiliated with Kaiser Permanente.

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