The Wall Street Journal recently connected a few more dots, although they could have gone further. The Journal reported that the Senate’s five-year budget plan allowed the government ten years to cover the cost of reform, so it could spread out the costs while not adding to the deficit. This would also give the government time to generate savings from changes to the system, and “allow it to rely less on new taxes or other revenue increases.” The Journal’s interpretation: lawmakers are hoping they can make health care reform pay for itself, even though it’ll likely take years before they see any substantial savings. My question: where will the money come from to pay the costs of reform incurred today if the savings will only be realized years from now?
The Journal speculated that these future savings would come in various ways: reducing incentives to stop providers from performing unnecessary medical procedures; addressing regional cost differences; letting providers know about effective treatments; and promoting prevention. Will all this really yield the trillion or so dollars needed to subsidize health insurance?
Then I thought of a New York Times story from last week, which offered an ominous take on one way the future savings would be generated—using information technology to cut costs and improve quality and efficiency. The Times reported on two articles published in the New England Journal of Medicine that, according to the Times, “point to formidable obstacles to achieving the policy goal of not only installing electronic health records, but also using them to improve care and curb costs.”
Now I ask you, dear reader, what does this add up to? A president backtracking on a campaign promise? Taxing workers instead of wealthier people? Causing more people to be underinsured? Letting insurers off the hook? Budget games? Banking on future savings that may not materialize? What a good story this will be when the dots are connected!