Posted by: Jeff | March 22, 2010

It’s In The Details

Ezra Klein notices something I’ve seen myself in arguing about the health care bill with conservatives. People understand taxes and spending in the crude sense, and they understand that $900 billion over ten years is a really big number. (Though actually not all that big in the context of the government’s total expenditures, or America’s total health care expenditures, over that same period.) So they have a hard time buying the idea that this bill will potentially cut lots of money from the deficit.

There are basically two ways to save money when it comes to health care. One is to try to cut costs out of government programs, or even get really draconian and slap hard spending limits on those programs. Neither approach is terribly popular, because they involve cutting benefits to individuals or reimbursements to popular interest groups like doctors. So the Democrats pretty much stayed away from those methods in this bill. (Some day, of course, those methods may still be necessary.)

But the other way you can save money is by changing the way government programs spend. This method doesn’t involve any dramatic one-time cuts, but instead makes minor changes to rates of growth in costs that should add up to big savings over time. These changes are usually highly abstract and technical, and involve complicated economic stuff about incentives and payment methodologies and fee-for-service and what-have-you. Their effect is also cumulative over time, so at any one moment it’s hard to see how they’re doing any good. Long story short, people have a hard time understanding this second way of saving money, so they don’t really believe that it works.

But just because you don’t believe in something doesn’t mean it isn’t there. So if you’re so inclined, here’s Klein laying out the five most important cost control measures contained in the health care bill.

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Responses

  1. As a moderate I can tell you I’m okay with the cost cutting, what I’m not okay with is anyone from government telling me I have to purchase a certain type of health care. If you honestly cannot see that this is the first step as many Democrats including our president have stated, then your not looking far enough into the future. If this plan goes forward it will ultimatly be the end of this country as we know it. The Hyper-partisan way it was passed will not set with those of us that sit middle of the road. Also if you believe that medicare can be cleaned up to the tune of 600billion or just under that, your not watching the same congress I am. This country should not have it’s citizens standing with a hand out but a hand up asking what they can do to make it a better country. Instead we now have three entitlements now and none are fiscally responsible.

  2. 1) You don’t have to purchase “a certain type of health care.” You will simply be required to have some kind of health insurance, just like you’re already required to have some kind of auto-insurance. Where you get that insurance is up to you, and the regulations allow for a great deal of variation in the type of coverage you can buy. And all this only applies if you’re on the individual market. If, like most Americans, you get your coverage through your employer, things won’t change at all.

    2) Of course this is only a first step. Eventually we’re going to have to move to either a single-payer system like what they have in France, or to a national individual market like what was envisioned in the Wyden-Bennett bill. The bill just passed is a first step in either direction. And I fail to see how either result would be the “end of this country as we know it.”

    3) How exactly does getting 60 senators out of 100 to agree on a bill constitute hyper-partisanship? Especially when those 60 senators represent MORE than 60% of the national population, since a lot of Republican senators hail from low-population states.

    At any rate, the American people have a very short memory. No one remembers the ethics violations Tom Delay engaged in to pass Medicare Part D. In six months, no one’s going to remember the complaints over this bill’s process either. (Not that I think those complaints were terribly legitimate to start with.)

    4) I don’t think Medicare can be cleaned up to the tune of $600 billion. I do think Medicare + the health system as a whole + Social Security + defense spending + our absurdly low tax regime can be cleaned up to the tune of $600 billion.


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