Why the White House is Still Wrong About Health-Care Spending

The Foundry (Heritage Foundation)
Why the White House Is Wrong - Again - On Health Care Spending

Nancy-Ann DeParle, the Director of the White House Office of Health Reform, posted a note – ironically titled “Reality Check” – on the White House blog this morning claiming that a new report from the federal government’s health actuaries, supports the administration’s position on health care reform.
But all that report says is that U.S. health care spending continues to increase – even though the rate of increase actually hit a historic low in 2008, the latest year for which figures are available. DeParle’s argument is basically this: We spend too much on health care, therefore the “ reform” proposals currently in Congress will fix everything.
However, DeParle seems to have missed the actuaries’ earlier report on what those “ reform” proposals will actually do – which is, to make health care spending grow faster, not slower. In particular, they estimate that if the Senate health reform bill becomes law, total health care spending would increase by 0.7%, or $234 billion through 2019. And that’s after taking into account what little savings would be achieved by cutting Medicare benefits and encouraging employer to cut health benefits by taxing private insurance plans that are “too generous.”
In other words, the primary source of “savings” in the Senate bill comes not from making the health care system more efficient, but from denying health care services to seniors under Medicare and from encouraging private insurance companies and employer to deny health care services to everybody else. And even after taking account of that so-called “savings,” total health care spending would still increase faster than it would without the Congress’s so-called “reform”!
The inescapable conclusion is that “reform” proposals currently in Congress will take an inefficient health care system and make it even more inefficient than it is now. One does not have to be what DeParle dismissively calls “defenders of the status quo” to oppose a reform plan that will produce something clearly even worse than the status quo. DeParle claims that if “opponents of reform get their way,” health care spending will continue to increase.
The facts are, if the administration gets its way, health care spending will increase faster than they do already and we’ll get less health care for our money. If opponents of this “reform” get their way, we’ll instead have real reform that gives patients more choices, providers incentives to give the best treatment instead of the most expensive treatment, and leads to better health care at lower cost. Unfortunately, that’s the opposite of the outcome that the bills in Congress will give us.