Small Steps Could Mean Big Savings on Health-Care Reform
To achieve the goals of health-care reform -- universal coverage and reducing costs -- is it really necessary to overhaul our entire health-care system? The answer is probably yes. No one would design anything like our current system if he or she were starting from scratch. Why try to renovate this ancient mess of leaky pipes and rotting wood? Why not tear it down and replace it with something shiny and new?
And what better time than immediately? President Obama has what one of his recent predecessors used to call "the big mo." His popularity still soars. And he seems fearless about overcrowding his agenda. Like all presidents, he got elected, in part, through a long list of promises, and kudos to him for trying to keep them. No doubt a sense of urgency is useful. But during most of the campaign, no one realized that the next president would have an economic emergency to deal with. He's gotten his fiscal stimulus, he's rescued the banks, he's almost through rescuing the auto companies (for a while). He's unveiled a complete overhaul of financial regulation. None of these items can actually be checked off his list and forgotten, though. They all require his, and the nation's, continued attention. And that is just the domestic side.
We're not just talking about a busy schedule. Almost all of these items are hugely expensive. Obama also seems fearless about that. The fiscal stimulus was, of necessity, a numbingly huge number, and almost nobody has said it was unneeded or not urgent or too big. (The complaint this week is that it was too small.) As several conservative commentators have pointed out, Obama has pulled a sleight of hand in which the items on his agenda long before the economic emergency -- items such as health-care reform -- have taken on a sense of great urgency merely from their association with truly urgent measures like the stimulus package.
But people, even liberals, are starting to get unnerved by the cost of all this. We now talk of trillions the way, even a few months ago, we spoke of billions. In mid-June, the Senate health committee put out its version of reform and was horrified when the Congressional Budget Office figured that it would cost a trillion dollars over 10 years (over current spending) and would still leave millions uninsured. The committee retreated to its lair and re-emerged in early July with a revised plan "scored" by the CBO as costing only $600 billion and leaving only 3 percent of the population uninsured. Six hundred billion doesn't sound like all that much to achieve, or come close to achieving, an important and long-standing goal such as universal health care. But keep in mind that health-care reform is supposed to save money. Its premise is that the current path is unaffordable. In that sense, a "mere" $600 billion extra is total defeat.
Why doesn't the president give himself a well-deserved treat and slow down a bit on health-care reform? Instead of going for a total overhaul, go for some smaller successes, or what business executives and gorillas call the "low-hanging fruit"? Pick half a dozen, get Congress to swallow them and see where we stand?
My list would start with malpractice reform. An achingly balanced CBO report last year cited a study showing that victims of medical negligence are 2 1/2 times more likely to get compensation than people who were not victims. This was an argument against reform: that for every dollar going to victims of malpractice, "only" 40 cents goes to plaintiffs who have no case at all.
Next on my list would be eliminating paperwork. This is the kind of savings that economists say can't exist: Is anyone in favor of paperwork? Of course not. So if huge savings were possible, they would already have been made. But for whatever reason, unless I'm crazy, those endless, duplicative forms do still exist. And if I'm crazy, it's from filling out all those forms.
Third would be outcomes research. A favorite statistic of health-care reformers is that 30 cents of every health-care dollar is wasted because we make remarkably little use of medical records to figure out which treatments work and which don't. In a column a couple weeks ago, I expressed skepticism about this 30 percent figure. But even if only a tenth of that amount is indisputably wasted, that's still a lot.
Ambulances are way overused. So are emergency rooms. There are dozens of smallish, concrete reforms that we all could agree on and avoid a political cataclysm. There are two risks in comprehensive health-care reform. One is that it won't pass -- and a second failure would doom the project for decades. The second is that it will pass but won't work. These mini-reforms are almost sure to work. So why not try them first?