The voices of Tax Policy Center's researchers and staff
Today’s letter from key health industry players to President Obama promising to “do our part” to control medical care cost growth is a big deal. It sends a powerful message that “Harry and Louise,” the fictional couple who became the symbol of the medical establishment’s opposition to Clinton-era health reform, have retired to a condo in Florida.
Instead of sitting the sidelines saying “nyet” to reform, influential providers, drug and medical technology firms, and insurance companies now understand the proverbial train is leaving the station. Their role is no longer to oppose reform, it is, instead, to tailor reform to their own interests. That is a profound change.
But make no mistake, for now their promise to trim 1.5 percent off of expected health care cost growth over the next decade is little more than rhetoric. Their two-page letter contains many platitudes but no specifics. It touches all the usual bases: transparency, aligning quality and efficiency; evidence-based best practices, coordinating care, disease prevention, and health information technology. But it promises nothing.
And while the health industry is widely represented in this missive, one interest group is conspicuously missing: consumers. And in the end, unless patients are willing to accept the consequences of all these clichés—which is to say, sometimes they will not get costly treatments they think they deserve—none of these promises will be worth the price of a used bedpan. No politician will stand up to the kind of consumer revolt that sunk most of the managed care movement in the 1990s, even though the HMOs of those days promised many of the very same reforms that are in today’s letter.
And keep in mind that even the kind of massive change these groups promise is still unlikely to pay the full cost of health reform. President Obama acknowledged that in his own way today, with an expanded set of tax hikes intended to fund about half of a $600 billion health reform reserve fund. Even the full $600 billion would pay for less than half the cost of the President’s campaign version of health reform, TPC estimates.
I’ll talk some more about those tax hikes tomorrow. But for now, the take-away is this: Even with the best of intentions, it will be exceedingly difficult for providers and insurers to trim $2 trillion from expected cost growth over the next decade. The changes industry promised today are a welcome step in the right direction but won’t avoid tax increases. In many ways, they highlight just how important new revenues will be to reforming the way we all get medical care.
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