Samuelson says Obama isn't doing what he said he would -- change the status.
Obama took a pass. He simply claims that his plan will do things it won't. What he's offering is an enlarged version of the status quo that, as he says, is already unsustainable.Samuelson adds:
...open-ended reimbursement by government and private insurance has ballooned health spending despite repeated pledges to "contain" costs. For example, health payments for individuals rose from less than 1 percent of federal spending in 1965 to 23 percent in 2008.What would a debate over controlling health care costs really look like?
Obama would perpetuate this system. No president has spoken more forcefully about the need to control costs. Failure, he's argued, would expand federal budget deficits, raise out-of-pocket health costs and squeeze take-home pay (more compensation would go to insurance). All true. But Obama's program would do little to reduce costs and would increase spending by expanding subsidized insurance. The House legislation would cut the uninsured by 37 million by 2018, estimates the Congressional Budget Office. The uninsured get care now; with insurance they'd get more.
"You'd be adding a third medical entitlement on top of Medicare and Medicaid," says James Capretta, a top official at the Office of Management and Budget from 2001 to 2004.
For starters, we wouldn't be arguing about how to "pay for" the $1 trillion or so of costs over a decade of Obama's "reform." Congress wouldn't create new benefits until it had disciplined the old. We'd be debating how to trim the $10 trillion, as estimated by CBO, that Medicare and Medicaid will spend over the next decade, without impairing Americans' health. We'd use Medicare as a vehicle of change. Accounting for more than one-fifth of all health spending, its costs per beneficiary, now about $12,000, rose at a dizzying average annual rate of 8.5 percent a year from 1970 to 2007. (True, that's lower than private insurers' rate at 9.7 percent. But the gap may partly reflect cost-shifting to private payers. When Medicare restrains reimbursement rates, hospitals and doctors raise charges to private insurers.)I think the answer, and Samuelson only mentions it in passing and indirectly, is restoring market forces to the health care system, e.g. vouchers for one. Government will have to stop offering everybody something for nothing. More government control and regulation will only make matters worse, e.g. rationing, less access to medical care for those with serious conditions, reduced quality of care, etc.
Medicare is so big that shifts in its practices spread to the rest of the delivery system. But changing Medicare, and through it one-sixth of the U.S. economy, requires more than a few demonstration projects of "comparative outcomes" research or economic incentives. What's needed is a fundamental restructuring. Fee-for-service medicine -- Medicare's dominant form of payment -- is outmoded. The more doctors and hospitals do, the more they get paid. This promotes fragmentation and the overuse of services.
We should move toward coordinated care networks that take responsibility for their members' medical needs in return for fixed annual payments (called "capitation"). One approach is through vouchers; Medicare recipients would receive a fixed amount and shop for networks with the lowest cost and highest quality. Alternatively, government could shift its reimbursement of hospitals and doctors to "capitation" payments. Limited dollars would, in theory, force improvements in efficiency and effective care.We're not having this debate. To engage it would require genuine presidential leadership, because, admittedly, these proposals would be hugely controversial. Medicare recipients -- present and future -- would feel threatened. Existing doctor-patient relationships might be disrupted. Spending limits would inspire fears of short-changed care. Hospitals, doctors and device manufacturers would object.