Health Care Witness Sets Out Dire Predicament

     WASHINGTON (CN) – If the system doesn’t change, Americans will pay one out of every three dollars they make towards health-care costs by the year 2040, presidential economic advisor Christina Romer said Friday before the House Budget Committee. “Doing nothing is simply not an option,” she declared.

     “Good health-care reform is good economic policy,” said Romer, the chair of the president’s Council of Economic Advisers. But while she was long on the need to cut the cost of health care, she was short on how to do it.
     Pennsylvania Democrat Allyson Schwartz, vice-chair of the committee, said, “Employers say they would actually add jobs if they didn’t have to worry about the rising cost of health coverage.”
     “The question is not ‘should’. The question is ‘how'” said Texas Republican Jeb Hensarling, the vice ranking member.
     But Romer said she would not get ahead of the legislative process and that she is just making the case for reform. “Our report is saying it’s worth it,” she said.
     Obama already tried to slow the rising cost of health-care just last month, when he convened doctors, unions and health insurers.
     He announced that he had secured a pledge from the industry representatives to cut the rise in health-care costs by 1.5 percent each year over the course of a decade, but the attendees denied a week later that they had made such a promise.
     Romer said during the hearing that the president is looking for legislation that will slow the growth rate of health-care costs “significantly,” and that will encompass the currently uninsured. Also, she said that legislation that ends the exclusion of pre-existing conditions from coverage is “non-negotiable” under Obama’s plan.
     She suggested that Obama is not looking for drastic changes, saying he wants to work with the current system. This matches comments Obama made in his speech to doctors Monday, when he all but rejected a single payer system like the one in France and Canada, deciding to leave it to the private sector.
     “I believe every business has a responsibility to provide health insurance for its workers,” said Obama in Monday’s address.
     In the past few weeks, health-care has dominated committee hearings as Congress drafts a bill on reform. House Democrats chairing the Ways and Means Committee, the Energy and Commerce Committee, and the Education and Labor Committee released their health-reform proposal Friday, just days after Republicans released theirs.
     In her testimony, Romer referred to a report issued earlier this month by the Council of Economic Advisers to make her case. Despite claiming that cos reductions are possible, she refused to say how.
     If nothing is done to reform health-care, Romer warned, then by 2040 the number of uninsured Americans will climb from 46 million today to 72 million, and the cost of Medicare and Medicaid will grow from three percent of gross domestic product to 15 percent.
     Americans already pay 18 percent of GDP in health-care expenditures, the highest such ratio in the world.
     If the system is allowed to continue, she explained, workers would see “stagnating take-home compensation” as employers divert more in potential employee benefits towards rising health-care costs.
     “The finding of this survey is that up to 30 percent of health expenditures in the United States could be cut without affecting health-care quality,” she said. “This is important in making the case that slowing the growth rate of costs by improving efficiency is possible.”
     She proposed cutting the rise in health-care costs by 1.5 percent each year. “Slowing cost growth year after year is essential,” Romer said, but admitted such a reduction would be difficult.
     If such a reduction were to succeed, it would put health-care costs at 23 percent of GDP in 2040, instead of costing 34 percent as predicted now. And family income would be nearly $10,000 higher in 2030 than it otherwise would have been
     In an interview, President Grace-Marie Turner of the Galen Institute, a think tank that believes in a market-based approach to health-care reform, said that the plan to curb the growth in health-care costs is too vague. “What are they specifically going to do to get costs down by 1.5 percent a year?” she said. “It raises as many questions as it answers.”

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