‘Stars aligned’ for health-care reform

What happened

President Obama’s drive for a major overhaul of the health-care system received a big boost this week when trade groups representing doctors, hospitals, and insurance companies pledged to reduce medical spending by $2 trillion over the next 10 years. The cuts, the groups said, would be achieved by aggressive efforts to reduce obesity, curtail unnecessary tests, eliminate ineffective treatments, and create more efficient, computerized medical records. The goal is to cut the growth of overall health-care spending from 6.2 percent a year to 4.7 percent a year. Obama, who courted the industry’s cooperation, said “the stars are aligned” for Congress to pass a comprehensive health-care reform package this year.

The White House views health-care cost containment as the key to reining in long-term deficits and to expanding coverage to 47 million uninsured Americans. Without cuts, health-care spending is projected to total $4.4 trillion in 2018, and would bankrupt the nation’s Medicare fund by 2017. Obama and the Democrats will seek to cut costs more dramatically than the industry’s proposal, partly by setting up a new, government-run medical insurance program that will compete with private insurers, negotiate for cheaper drug prices and doctors’ fees, and force down costs overall.

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What the editorials said

It’s nice that the health-care industry finally cares about costs, said the St. Louis Post-Dispatch. But last year, health care was about “$7,421 for every American man, woman, and child.” By 2018, it will cost $13,100 per person and consume a full 20 percent of the national economy. Only through Obama’s government-run medical program—which will have real leverage over drug companies and hospitals—can we effectively stop the ruinous escalation in spending.

So now the government wants to run the health-care system, too, said The Wall Street Journal. On top of this week’s “vague” pledge from the industry, the White House promises to save a bundle through “competitive effectiveness research,” which analyzes waste and channels spending to the most cost-effective treatments. But we’ve been there and done that. It was called “managed care,” remember? Patients hated it, and revolted against a system they perceived as “inferior care.” The only way to cut health-care costs is through rationing—denying treatment based on the dictate of some bureaucrat. That’s where Obama-care is headed.

What the columnists said

Should we be “suspicious” of the industry’s sudden cooperativeness? said Paul Krugman in The New York Times. “You bet.” Obama enlisted support from some of the same “villains” who’ve worked to scuttle reform efforts in the past, including Bill and Hillary’s managed-care plan. And what we call “costs,” these guys call “income.” Nevertheless, “this is tremendously good news.” These powerful interest groups have now acknowledged that the rise in health-care spending is unsustainable; they’re scrambling for a seat at the table because they think this time reform will really happen.

Don’t expect this lovefest to continue, said Ezra Klein in The American Prospect Online. The insurance industry has always “howled in pain and anger” whenever its profits were hurt, and its vague promise of “future cost containment” is a ploy to stop “the cost containment ideas that are actually on the table.” So don’t expect Obama to avoid a heavyweight fight with industry brawlers. This week was “just the weigh-in.”

Let the fight begin, said Rich Lowry in National Review. Obama’s “public option” will create a government bureaucracy similar to Medicare that will compete with private insurers. But since the “government will stack the deck in favor of its option to the detriment of private insurers,” competition will wither and we’ll end up with what Obama really wants: a single-payer health-care system under total government control. That’s the real agenda here.

What next?

Democratic lawmakers in the House and Senate are already sorting through options for extending insurance to the estimated 47 million Americans without health-care coverage while holding down the costs. House Speaker Nancy Pelosi said this week that she expected her chamber to pass a sweeping health-care reform package by the end of July. Republicans vowed to fight, and met with strategist Frank Luntz to craft their message. He recommended saying that Obama’s plan “will deny people treatments they need” and set up “a committee of Washington bureaucrats who will establish the standard of care for all Americans.”