Is Health Care Reform Possible?
This week, one of the 7 possible congressional health care reform bills currently being configured was scored by the non-partisan Congressional Budget Office (CBO). The legislation, proposed Senate Finance Committee chairman Max Baucus (D-MO), would cost an estimated $843B over 10 years and reduce the federal deficit by $81B over the next decade. While the initial estimates on debt reduction are promising, three obstacles remain. One, the other bills currently in the House and Senate committee’s range anywhere from the Baucus Bill estimates to $1.5T. A final bill would have to be agreed on in conference between both houses of congress. Secondly, the apparatus being constructed to takeover and manage 1/16 of our national economy is staggering (see imbedded chart). And finally, skepticism remains as to whether government can ever meet the cost targets they claim. And there is reason to support this skepticism.
A story broke last week regarding Medicare and accusations that the federal program ”knowingly” overpays for almost everything it buys. An internal audit found the following examples:
1. $7,215 to rent an oxygen concentrator, when the purchase price is $600
2. $4,018 for a standard wheelchair, while the private sector pays $1,048
3. $1,825 for a hospital bed, compared to an Internet price of $1,071
4. $3,335 for a respiratory pump, versus an advertised price of $1,987
5. $82 for a diabetic supply kit, instead of a $47 price on the Web
Simply staggering. An attempt was made within the Bush Administration last year (led by HHS secretary Mike Leavitt) to replace Medicare’s fixed price fee schedule with a competitive bidding program that would have been piloted in 10 major US cities. This change, it was felt, would have resulted in a $125M savings per year, with an astonishing $1B in return should the program go nationwide.
Sadly, the Democratic-controlled congress stepped in and passed legislation that terminated the competitive bidding contracts and returned things to the status quo. Secretary Leavitt noted, “The problem here is one man’s waste is another man’s living, and whenever there is an effort put forward to actually make an efficiency, someone goes on the offensive and hires lobbyists and does what they can to constrain Congress from doing it.” Why would they do this? The Center for Responsive Politics, the health care industry is currently spending $2 million a day lobbying Congress. Perhaps Mr. Leavitt was correct is his accusations.
Simply put, the biggest obstacles to true health care reform can be found within the ranks of those who claim they can produce progress. How can the same people who are running Medicare (poorly) be counted on the deliver us an efficient, well-ran, and cost neutral health care program when they cannot do that with what they have today? It is not logical to believe they can given their record.
