The president and his staff have brought us to the stump-speech stage of health reform: the familiar talking points, the oratory, the exaltations, the fuzzy language, the misstatements, the “yes, buts.” Why, it almost sounds like a political campaign, judging from David Gregory’s Meet the Press interview Sunday with HHS Secretary Kathleen Sebelius.
The talk inevitably turned to cost containment, since it’s the most problematic thing in the reform bill. After letting the secretary ramble about administrative simplification and changes in the delivery system, Gregory tried to be provocative—but may have just come across as cryptic:
…they say there’s only the potential for some of these things to pay off in terms of you getting away from subsidizing volume. So how can you assert with such certainty that this bill measures up to the president’s goal of bending that cost curve, of bringing health care costs down?
“Certainty” was the operative word here. Madame Secretary came across as very certain that the bill’s provisions would lower the cost of care. She asserted that changing the rules for the insurance industry would “lower costs for families, lower costs for businesses.” She had her talking points down, and her answer was more cryptic than Gregory’s question:
Everybody says that just having a new insurance marketplace, getting rid of the cherry-picking, allowing insurance companies to go back and forth, not only streamlines administrative costs, but lowers costs overall.
Did she really mean that insurance companies will save money because they will no longer pay underwriters to screen people for pre-existing conditions? Did she mean to suggest that administrative costs (high as they may be) are at the root of the cost problem? Would letting insurers sell across state lines make it easier for the little guys to compete against the giants that are so eager to get out from some state consumer protections? Sounds kind of like letting the big banks move their credit card operations to South Dakota years ago. And we all know what happened after that.
Sebelius told Gregory’s viewers that paying for quality under the Medicare program would help drive the private market. She also talked about “bundled care,” which she explained as “coordination between docs and hospitals.” Well, maybe, but it also sounds like the old fashioned capitation payments the HMOs used to make to the docs—one payment that was supposed to cover all the expected services for a doctor’s patients. That, too, was supposed to lower the cost of health care, but got subverted when the doctors didn’t like it. I still hope some enterprising health reporter will tackle the similarities and differences there.
What happens when millions of new people have insurance and suddenly begin using medical services? Without cost containment, many experts believe that the cost of care will continue to go up. Remember that simple equation: National medical expenditures equal the number of services multiplied by their price. If the number of services rise, and prices also rise—or don’t fall as much as the administration believes they will—the total amount spent goes up, too. So much for bending the cost curve!
Next, Sebelius dragged out all that hooey about health information technology and preventive care as ways to save money, if only the Congressional Budget Office would recognize that and “score” the savings. Sebelius told Gregory “we’ve got every strategy, every idea that health economists and experts say work in this bill, including a lot of measures which the Congressional Budget Office doesn’t count for.” That sounds to us like MIT economist Jonathan Gruber talking. Gruber, remember, had a contract with HHS to analyze health reform proposals.
Sebelius went on:
They say maybe health IT, you know, the use of electronic health records pays off. We know it does. It’s in the system, they don’t get credit for that. We know that investing in health and wellness works. If you have fewer diabetics in 10 years, if you have fewer people who smoke, if you have fewer overweight and obese Americans, that’s going to lower health costs. No credit is given to that.