Writing New Prescriptions For Change
Policymakers' Interest In Health Care Intensifies

By Lori Montgomery
Washington Post Staff Writer
Tuesday, June 17, 2008

From Capitol Hill to K Street, Washington is gearing up for another run at health-care reform.

The Congressional Budget Office has nearly doubled its health policy team, hiring 21 people in the past year. The Brookings Institution has snatched up more than a dozen researchers for a new center devoted to health-care innovations. Smaller Washington think tanks are also bulking up, stealing experts from academia, private companies and the Bush administration.

This time, unlike the ill-fated 1994 attempt led by then-first-lady Hillary Rodham Clinton, many political and policy experts say the stars may be aligned for Congress to make big changes.

"We have a broad consensus that we aren't getting nearly as much as we should for the money," said Mark B. McClellan, President Bush's former director of the Centers for Medicare and Medicaid Services who now heads the new Engelberg Center for Health Care Reform at Brookings. "There's an unprecedented level of agreement that something can be done and that something must be done."

That last point was hammered home yesterday at the Library of Congress, where the Senate Finance Committee hosted a daylong health-care "summit" featuring frustrated employers, worried economists and cheerful analyses of more-cost-effective systems in other countries.

In a half-hour speech to kick off the proceedings, Federal Reserve Board Chairman Ben S. Bernanke said spending on health care already consumes more than 15 percent of the nation's economy and about a quarter of the federal budget. It is "the single largest component of personal consumption," Bernanke said, "larger than spending on either housing or food."

And it is growing at a rapid pace, exceeding GDP growth by about 2 1/2 percentage points, on average, over the past four decades. If that pace continues, Bernanke said, health spending will exceed 22 percent of GDP by 2020 and will devour half of all federal spending by 2050.

"A piece of wisdom attributed to the economist Herbert Stein holds that if something cannot go on forever, it will stop," Bernanke said. "At some point, health-care spending as a share of GDP will stop rising. But it is difficult to guess when that will be, and there is little sign of it yet."

Then there's the problem of the uninsured: Last year, 47 million people -- 16 percent of the population -- lacked health insurance. That issue has received significant attention on the presidential campaign trail, where Democrat Barack Obama and Republican John McCain have both offered plans to increase coverage. Add widespread anxiety about rising health-care costs across the economic spectrum -- from big corporations to small employers to labor unions -- and many observers see a recipe for reform no matter who wins the White House in November.

Several groups already are working on legislation. Sens. Ron Wyden (D-Ore.) and Robert F. Bennett (R-Utah) are sponsoring the Senate's first bipartisan proposal for universal coverage. It would encourage the demise of employer-based health insurance by creating a state-run system requiring insurance companies to offer basic coverage to all applicants and requiring individuals without employer-based coverage to buy in.

A quartet of former Senate majority leaders is also working on model legislation. Republicans Bob Dole and Howard Baker and Democrats Tom Daschle and George Mitchell hope to introduce a plan in November. And Senate Finance Committee Chairman Max Baucus (D-Mont.) said he may offer his own plan later this year.

"I think people are tired of just yakking about this," Wyden said. "There have been so many blue-ribbon commissions. People just want to get going."

At this point, however, few lawmakers seem to know where to start tinkering with a health-care system so vast and so complex -- and so critical, as Bernanke put it, to "economic growth, wages and living standards, and government budgets."

"I wonder if we're competent to answer some of the questions we're being called upon to legislate," Baucus mused yesterday.

That's where the newly beefed-up policy shops and think tanks aim to help. Under McClellan, the new Brookings center is evaluating and providing technical assistance to state programs, particularly those that try to do a better job measuring the quality and cost of care.

In 1994, "a lot of the focus was on financing and how to provide new subsidies and access to affordable health insurance. Now the focus is going to be much more on reforming health care itself, because that's all we can afford to do," McClellan said.

The Congressional Budget Office, meanwhile, is compiling a two-volume compendium of critical issues and options for health-care reformers, focusing closely on costs to the federal budget.

"There is increased analytical effort being dedicated to this topic in a variety of settings, including at CBO," said director Peter Orszag, whose health team is poised to grow from 30 to 51 people in less than a year. "Frankly, at this point, one constraint is finding the types of highly qualified people that we need for the effort. A lot of us are very actively recruiting."

Will the next administration do something big and bold? Orszag declined to speculate. Others predicted that, regardless of what the White House wants, lawmakers will go slow, preferring a piecemeal approach that makes small changes to expand coverage.

"Anything big is really extremely expensive or extremely disruptive or both. And there's no consensus on what the big thing should be," said Jim Jaffe, a longtime aide to former congressman Dan Rostenkowski (D-Ill.) who survived two rounds of health-care reform and now serves as vice president for public affairs at the Center for the Advancement of Health. "We aren't ready to cut the cord on the employer-provided system, Ron Wyden notwithstanding."

But others see an appetite for far-reaching reform.

"There's a broad-based desire to do more to make health care more accessible and more affordable," McClellan said. "If all that happens is some incremental reforms, that would be a missed opportunity."

View all comments that have been posted about this article.

© 2008 The Washington Post Company