CNBC Guest Blog

The Case for Health Care Reform

Like a broken record that hasn’t been taken off the turnstile since the early 90s, opponents of health care reform love to cite the same debunked reasons for opposing efforts to overhaul our health care system.  No need to rush, they say. The free market should be allowed to do its job.  The public option is socialized medicine at its worst. Reform is too expensive.

Of all the arguments, the one claiming that there is a reckless rush to reform is the most specious.  In fact, President Truman made the first appeal for universal health insurance three months after Hiroshima. Since then, both the cost of health care and the number of uninsured Americans has risen at breakneck speed.  If the status quo were to persist, over one-third of our GDP will be devoted to health care costs within thirty years.  Make no mistake: those who have counseled patience for six decades even as continued inaction plunges our nation towards fiscal doom are not urging delay. They are urging defeat.

Opponents of reform also love to cite the free market as the panacea for all ills. But, in fact, the market has already failed with respect to health care.  Insurers routinely deny coverage to those with pre-existing conditions because the market has determined that covering them is too expensive. Unlike cereal purchases, health procedures don’t lend themselves easily to bargain shopping. 

All of this, of course, leads to a singularly anti-free market phenomenon: workers are often reluctant to leave their jobs to look for better opportunities because they fear losing existing health care coverage.

Similarly, those opposing a public option may as well be shills for the insurance industry.  They argue that a public option will have an unfair advantage over private insurers by virtue of having comparably low overhead and greater power in negotiating costs with pharmaceutical companies and medical providers. They complain that a public option will provide savings to its subscribers that will leave private insurers with an inability to compete.  Apparently, it is more important to protect the bottom line for insurance companies than to force them to compete with a cheaper option. This protectionism on behalf of existing insurers does nothing to bring down the cost of care.

The bottom line is that those who oppose health care reform are fighting simply to preserve a bankrupted status quo.  President Obama has been clear in his mandate:  any proposal to reform health care must be deficit neutral. Although the current legislative process is akin to watching sausage being made, the end result will have to meet this fiscal requirement. 

In this, the president has been more responsible than his critics. Over the past eight years, they thought nothing of promoting irresponsible tax cuts during wartime and expanding the size of government to such a degree that they left us with the largest deficit in history on their way out the door.  These latter-day fiscal messiahs never cared about the costs of rushing us into war in Iraq but now want to put the brakes on providing life saving treatment to all Americans.

Those supporting health care reform aren’t engaging in an intellectual exercise. There is a serious economic imperative to reforming the system now, before it devours both our national and personal budgets.  Politicians and pundits throwing up roadblocks aren’t just engaging in a political Waterloo to weaken Obama politically – they are irresponsibly promoting a status quo that will come at great cost to our national interest.

The Stubborn Facts of Health Care

Facts, even in Washington, can be stubborn things.

It's the presence of cold, hard facts -- not some malicious Republican scheme -- that has put the brakes on President Obama's mad dash to ram through health care reform before congressional vacations begin in August, and before the American people and businesses know what hits them.

And no amount of presidential finger-wagging can make those facts go away.

Some of those facts obliterate the goals President Obama put forth for health care reform he could support.

The non-partisan -- albeit Democrat-led and controlled -- Congressional Budget Office determined that legislation put forth by congressional Democrats fails the President's tests. CBO says that rather than lowering costs and not adding to the deficit, the plans under discussion will increase both costs AND the deficit. And while Democrats have been geared to fight Republicans on health care, they are confounded by the reality that the real battle is with Blue Dogs in their own caucus and the number crunchers at CBO.

Contradictions can be nettlesome, too, and those contradictions are confusing Americans.

The President asserts he doesn't want a government takeover of health care -- all the while supporting the creation of a new government-sponsored health care entitlement program. The so-called "public option" promises to be a dumping ground for businesses that want to off-load their employee benefits programs. This isn't the change Americans voted for.

And he continues to assert that he's reducing health care prices and reducing the cost of health care for government, employers and businesses - but says it will cost us all more than a trillion dollars to accomplish it, and commits to prevent the cuts to doctor pay put in place by prior Congresses.

No wonder Americans are confused and congressmen are begging for more time.

Here's a fact that should color the spirit of the congressional debate as we go forward: Every policy-maker, of every political stripe, wants increased access, lower costs, and better health outcomes. All agree that every American should have access to basic, affordable health care. Period.

There's no question, as the President has said, that if we do nothing to change incentives and reduce the cost of health care that we're on an unsustainable path - with spending eating a larger and larger share of paychecks and profits, and more and more Americans uncovered. Unfortunately, it's now clear that none of the bills under discussion in Congress change those incentives. Instead, they simply propose higher spending, savings that CBO judged highly unlikely to be realized, and a new government program.

Health care hasn't been "solved" yet not because policymakers are indifferent or captured, but because the issue is complex. Despite the apocalyptic language from the White House, Congress needs to take the time to put in place real, lasting reform that deals with our system of payment, competition, the tax treatment of health insurance, the role of technology and innovation, and the cost of defensive medicine because of the nation's tort system.

All these factors impact the cost and affordability of health care and health insurance. Almost none of them are dealt with in congressional legislation.

President Obama and congressional Democrats should go back to the drawing board, bring Republicans into the room, and start a serious discussion that will bring real reform to our health care system. And start by dealing with the real facts.