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Washington Post Staff Writer
Sunday, July 26, 2009

President Obama says the primary goal of health reform is to rein in runaway spending, and he points to real-world examples in which doctors and hospitals have improved care and reduced costs.

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Making the leap from a handful of success stories to restructuring one-sixth of the nation's economy -- and writing it all in legislative language -- is a puzzle he has not solved.

The proposals circulating in Congress make strides toward curbing medical spending, largely by grabbing what Len Nichols of the nonpartisan New America Foundation calls the "low-hanging fruit." The bills extract savings by targeting medical errors, administrative waste and unnecessary duplication -- money that would be reallocated to cover many of the 47 million uninsured.

But a diverse cross section of experts says the legislation lacks the more far-reaching structural changes needed to ensure that over the long term the nation gets its money's worth.

"The truth is that we don't know today all of the steps that are necessary to move towards providing higher-quality, lower-cost care," White House budget chief Peter Orszag recently told the Council on Foreign Relations.

As health care consumes more and more of the total economy, it reduces the money available for other expenditures. The question is whether Americans are getting a good return on the investment.

Achieving Obama's goal, say Orszag and other experts, requires covering every American, digitizing records, encouraging healthy behaviors and, perhaps most important, rewarding medical teams that deliver evidence-based care rather than those with the highest volume. It means focusing on chronic illnesses, reducing costly hospital and specialist visits, and nudging doctors to work in teams.

Combined, those strategies "represent our best chance of creating a health-care system" that delivers value and does not bankrupt the nation, Orszag said.

Many of the concepts have made appearances in the unfolding congressional drama, but they are largely cameo roles. The debate over cost controls has become a central dilemma slowing progress on the president's top legislative priority.

Negotiations in the House blew up last week over the cost issue, with one faction of conservative Democrats and prominent medical systems such as the Mayo Clinic clamoring for reforms that address underlying cost drivers. Senate leaders have announced that no votes will occur before September, and prospects have dimmed for action in the House before its break starts Friday.

An Economic Approach

In the past, Congress has framed health reform as a moral imperative to cover everyone. The Obama team approaches it as an economic issue, noting that $1 of every $6 spent in America goes to health care. If nothing changes, it will be $1 of every $5 by 2017.

"The evidence is clear that the biggest threat to our fiscal future is rising health-care costs," Orszag said.


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