Rebutting WaPo columnist's claim that Obama isn't serious about controlling health care costs

[ProSense]

I Didn't Wake Up Planning to Write About Samuelson

I woke up this morning planning to write about Newt Gingrich or maybe Sarah Palin. But they'll have to wait because it's Monday. And that means there's another Robert Samuelson column out in the Washington Post.

Samuelson has come to the conclusion that Obama is no more serious about trying to control costs in his health care plan than his predecessors have been:

<...>

Samuelson then goes on to say a real debate--the kind we never have in this country--would push more aggressively to cut costs by moving away from fee-for-service medicine, which encourages more health care rather than better health care. A smarter strategy, Samuelson says

to 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. 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's grasp of health economics is reasonable enough. But has he read a newspaper? Or a history book?

The idea of moving moving away from payments that reward more care rather than good care is a central feature of Obama's health reform proposal. That's why he's pushed for the "bundling" of hospital payments and other changes to Medicare.

A version of the voucher system that Samuelson describes actually exists already; Medicare patients have the option of taking the money govenrment would have spent on them in the traditional program and using it to pay for a private managed care plan. But Obama would do something else: He'd set up a competitive market for working-age people who don't now get insurance coverage from large emlpoyers. These "exchanges" would likely attract tens of millions of people, mostly those who now don't have insurance or buy it on their own. Once in the exchanges, people would do exactly what Samuelson says he wants: They'd shop for plans, with incentives heavily favoring those plans that offer high quality at low cost.

And that's not all Obama's plan would do to cut costs. Most important among them, Obama has called for a proposal to create an independent commission that would set Medicare reimbursement, in order to reward quality and efficiency while taking payment policy out of Congress and its legions of lobbyists. Many experts think this could have an enormous impact on long-term spending.

Don't forget, too, that Obama has called for a public insurance option that--if given the right tools--could also lead the way on controlling costs. (For more, read Jacob Hacker's paper on why a public plan is "key to cost control.")

<...>

And one more thing! (Yeah, I shouldn't blog before my first cup of coffee.) Even if everything Samuelson said about cost control were true, how on earth does that qualify as defending the status quo? Last time I checked, the status quo means that tens of millions of people have no insurance while tens of millions more have insurance that doesn't cover their needs. The reforms Obama supports would mean everybody get could comprehensive insurance at a price they could afford.

more

[ProSense]

1. No comment? n/t

[customerserviceguy]

2. Samuelson's wrong about capitation

It encourages the various competing networks to find ways to identify their most expensive customers, and once that is done, you can set up systems in such a way that you piss them off enough to unload themselves off on some other network.

Single-payer makes that unnecessary.