Stuart Butler is Vice-President for Domestic and Economic Policy Studies at The Heritage Foundation in Washington DC. He plans and oversees the Foundation's research and publications on all domestic issues. He is an expert on health, welfare and Social Security policy. He is also an Adjunct Professor at Georgetown University Graduate School and has been a Fellow at Harvard University's Institute of Politics. He is widely recognized as an individual who is willing to work with people across the ideological spectrum to find solutions to the nation's health care problems.
So, Senator Daschle, you’d like to see a “federal health board with the political autonomy” and the legal power to run our health system. Well, let’s think about that for a moment. Annual spending in America’s health system is larger than the economies of all but six countries in the world (and that includes the US economy). It is the size of the economy of Britain. And it is just as complex as any economy. Imagine if someone suggested that a special board of experts with “autonomy” (i.e. free from effective democratic control) should run the entire British economy, or the French economy, or the… Read more
It is good to see the Finance Committee re-opening the discussion about reforming the health tax exclusion as part of overall health reform. While I think an overall replacement of the exclusion with credits would be the right way to go, that would be a heavy political lift. But capping the exclusion based on income and the local actuarial value of a benchmark plan would be a good and achievable step. Given the choice between revamped regulation of the private market and a public plan, count me with the regulators – notwithstanding Uwe’s caution about the degree of regulation… Read more
It didn’t take long. The story used to be that a) widening coverage now would mean more efficient care and immediate savings, and b) there is so much overspending in the system that we can do much more with less. Now the story is that if we just spend more on X now it will help us save money in the future, so please “bend” PAYGO just for us and you will be happy. Honest. I was at Obama’s “Fiscal Responsibility Summit” where this was the constant refrain around the table of health care providers: just spend more money on the people we represent… Read more
If we are going to provide new health services to Americans who now lack them then one of two things has to happen. Either taxpayers are going to get squeezed (more than they are currently scheduled to be) or some providers are going to get less than they expected so that others serving the uninsured will get more. One person’s saving is another person’s squeeze. It is that simple. Doctors and hospitals as a group have no sacred right to ever-growing revenues, any more than computer makers or teachers do. The issue they should be concerned about is how savings are achieved. They can support market-based… Read more
Paul Ginsburg has it right. The kind of “public plan” Len Nichols lays out is a public plan in name only. If it operates under exactly the same rules then in what sense is it a public plan? Well, then, what is the big problem with it, one might ask. The problem is that it is inconceivable that Congress would set up a public plan that would actually have to live by the same rules. For instance, would Congress make it live by the same financing and financial reserve requirements as its private competitors, or would it have special access to the Treasury? If private GM… Read more
My friend and self-styled country bumpkin economist Uwe Reinhardt is missing two points, I think. First, whatever one thinks of the merits of Medicare the promises to everyone in that program imply huge financial commitments that right now are likely to be honored only by crowding out funds from other priorities in the future, such as education. And second, the design of Medicare itself (e.g. heaving subsidizing drugs without regard to income) inefficiently fuels general health costs – as do many perverse incentives in the private sector, such as the unlimited tax exclusion for employer-sponsored coverage. So it is reasonable and… Read more
I attended the Summit and the health care breakout session. The good news is that the conversation was cordial and positive, and could presage a serious conversation about what to do. The bad news is that nobody was willing to talk about tough choices. But unless hard choices are made, it’s impossible to rein in the tsunami of Medicare and other health spending that makes the long-term fiscal picture so dire. The President should commit to getting out of Washington and holding a bipartisan Fiscal Wake-Up Tour, modeled on the very successful Tour that Heritage, Brookings and the… Read more
The 87 billion dollars in Medicaid funding merely represents a temporary shift in the accounting ledger from the states to the federal government. But once the two-year federal commitment expires, states will be forced to pick up their share of the tab again. Will they drop people, or press to use the federal taxpayers as an open checkbook. I think the latter. Although these bailout funds are designated for Medicaid, it is important to recognize that the flow of dollars to the states does not ensure access for enrollees; it only guarantees payment to providers and institutions for the… Read more
It’s unfortunate that the SCHIP bill so far conflicts with two of President Obama’s promises: bipartisanship and protecting the private coverage Americas have today. It’s sad that this SCHIP bill is a return to partisan policy. Last year’s bipartisan bill was replaced with a one that drops provisions that had won Some Republican support. That does not auger well for the prospects of bipartisan support for broader health reform. President Obama also said in the campaign that he would make sure Americans could keep the coverage they have if they are happy with it. But the SCHIP bill… Read more
My friend Uwe is right to raise the basic moral questions facing us as a nation associated with today’s huge gaps in coverage, especially for those who are older and more medically and financially precarious. I don’t think there is much disagreement about the moral need for action. The debate is about how to act, and the consequences of acting in one way rather than another. As long as health is so closely tied to the place of work these problems will continue whenever unemployment, early retirement or even change of job occurs. If our tax subsidies were… Read more
If the government runs a national exchange, determining the rules for competing plan, and also operates a public plan as one of the competitors, the end result is inevitable. There will be no level playing field. Instead the rules will be designed to favor the government’s public plan. And Medicare-style plan, with its heavy subsidies, would enjoy an artificially low price advantage. Very soon it will drive out the private plans. Little wonder that the Lewin Group estimates that over 20 million Americans would discover very soon that their employers had assigned them to the public plan. Understandably,… Read more
There is a threshold question in paying for health care. Do we make huge new commitments while raising taxes and promising ourselves – some day in the far yonder when it is politically feasible – that we really will get health spending under control? Or do we agree that the existing rising trajectory of health spending as a proportion of GDP is unacceptable and begin – now – to redeploy resources as we expand coverage? Congress and too many analysts seem to favor the first option. How many more times are we going to fall for the argument that if… Read more
Tom Daschle’s Federal Health Board is one of the worst ideas to hit the health scene in a generation. When you read his book, and strip away all the window dressing of how the Board would examine clinical effectiveness, it quickly becomes clear what he really envisions. He proposes a remote board of “experts,” modeled on the Federal Reserve Board. This Board, he writes, would be “insulated from politics. Congress and the White House would relinquish some of their health-policy decisions to it.” Shielded from public opinion and from representative government, it would have “teeth”, potentially deciding such things as… Read more
It would indeed be wise for all those committed to major health reform to be cautious as they contemplate how to advance their agenda after the election. One lesson congressional Democrats should bear in mind is that ignoring the need for bipartisanship after a triumphant election is likely to doom reform. After Bill Clinton was talked into snubbing Republicans in 1993 his seemingly invincible health reform steamroller ground to a halt. There are plenty of areas for bipartisanship next year. Despite the brickbats of the election to and fro, there is actually deep bipartisan support for restructuring the tax treatment… Read more
Reforming the tax treatment of health care has had broad bipartisan support for years among health experts, and more recently among politicians. In tight budget times it makes sense to redesign this $200 billion tax break that is regressive, inequitable and fuels excess health spending. McCain sees it as a core part of his plan. Obama economic guru Jason Furman envisions replacing the individual tax exclusion for employer-sponsored coverage with a credit or other subsidy, as I have supported. Even Hillary Clinton wanted to cap the exclusion during the primaries. How best to do it? As part of overall tax… Read more
Both Senator Kennedy and John Goodman are right. Massachusetts was a bold breakthrough in the politics and substance of health policy. And while its centerpiece – the health exchange or “Connector” – is a critically important tool for achieving broad, portable coverage, its heavy benefits mandates will keep costs artificially high. My colleague Ed Haislmaier has looked carefully at these pros and cons Lessons for national policy? One is that the health exchange idea has enormous potential, and variations on the exchange theme need to be tested to find the right design – and the best design may not be… Read more
It's all well and good in the middle of a financial and budgetary crisis to say that now more than ever we must strengthen our commitment to health expansion. I'm sure that there are blogs being written right now urging the same recommitment to spending on education, on renewable energy, on infrastructure, you name it. But it borders on the delusional, I'm afraid, to argue that we should just plunge forward in the current climate, making commitments and just hoping we can find those constantly elusive savings and efficiency that will cover the cost. Or that new health programs themselves… Read more
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