It's A Health Care Problem: Not A Debt Problem

Today’s Managing Health Care Costs Quote is

The federal government does not have a spending problem per se. 
What it has is a health-care problem

Click to Enlarge.  Link  

That’s from James Surowiecki in this week’s New Yorker. 

He’s pointing out, as many progressive bloggers and columnists  have recently noted, that the Ryan plan would lower overall federal spending by shifting costs of Medicare to the elderly and costs of Medicaid to states and to beneficiaries. 

The Affordable Care Act has laid out a series of cuts (or decreases of planned increases) which would help make Medicare more affordable, but would be painful for doctors, hospitals, pharmaceutical companies and medical device manufacturers.  It would cut as much as a trillion from health care spending over the decade. By contrast, the Ryan plan would increase the overall cost of health care while shifting the burden away from government.

A third approach would lower the deficit far more – and that’s offering a public option to compete with existing health plans. That’s because the government could negotiate lower prices and exert more cost-control pressure on health care providers.  This isn’t especially welcome among insurers or providers.  The CBO suggested this could save $15 billion a year by 2020. 

There is a historic “iron triangle” of cost, quality and access – you can’t change one without making a tradeoff in another. There are some places where it appears we can increase quality and decrease costs (more childhood immunizations and fewer hospital acquired infections and medical errors). Alas, the dollars in these areas are small.

Surowiecki suggests a new iron triangle: senior access to care, reduction of the debt, and no change in provider payment. He tells us we can only have two of these three simultaneously.

The Managing Health Care Costs Indicator will be back with the next post.