Tag Archives: healthcare reform

The Economics of Healthcare Reform

It’s getting so I hate to turn on the television, unless I’m watching something I have TIVO’d, and can zip through the commercials. On live TV, there is an ad that runs every few minutes declaring that healthcare reform will add to the national deficit and raise taxes. The ad ends by darkly warning that “America cannot afford” to reform healthcare.

Complex issues are never accurately addressed by slogans and bumper stickers, of course, but those of us who have actually been following the various proposals and arguments cannot help but be offended by the intellectual dishonesty of this particular 30-second spot. There are a number of proposals still on the table, for one thing, that would have different results. None of them currently would do any of the things this ad claims, for another. The Congressional Budget Office says that the version in the U.S. House would REDUCE the deficit by some 100 billion dollars over the next ten years.

Since I grit my teeth every time this particular bit of propaganda airs, I was gratified to see release of the following open letter from several of the nation’s most eminent economists.

Successful health care reform is vital to the nation’s fiscal and economic future. The legislation the House will vote on in the coming days will guarantee security of coverage, limit the costs of care, create incentives for improved quality of care, and set us on the path towards sustainable economic growth. In short, the House health reform legislation takes the steps necessary to promote our economic health.

Specifically, the bill:

  • Reduces the deficit by over $100 billion in the first 10 years, and continues to reduce the deficit in subsequent years, as judged by the Congressional Budget Office.
  • Takes initial steps to “bend the cost curve,” and thus might lead to even larger cost savings than official estimates suggest.
  • Covers nearly all American citizens and legal residents.

We urge House passage of the legislation, which provides a historic opportunity to realize the long-delayed goal of significant health care reform.


Dr. Henry J. Aaron, The Brookings Institution
Dr. Mike Chernew, Harvard University Medical School
Dr. David Cutler, Harvard University
Dr. Judy Feder, Georgetown University, Center for American Progress Action Fund
Dr. Dana Goldman, University of Southern California
Dr. Jonathan Gruber, Massachusetts Institute of Technology
Dr. Len Nichols, The New America Foundation


That’s the amount the Commonwealth Fund says Indiana could save annually in Medicaid payments if we had healthcare reform.

Commonwealth has just completed a national survey that ranks states on a variety of health dimensions. Those who live in Indiana and pay any attention to such things will not be surprised to find that we land in the bottom quartile of the states overall, and rate comparatively poorly in most of the categories for which there was a ranking.

As our state continues to struggle to provide essential services with declining revenues, Governor Daniels might consider the merits of healthcare reform rather than threatening once again to cut (cripple)education. (I’m sure his long affiliation with Eli Lilly has nothing to do with his disinclination to support measures that might affect its bottom line…)

I think Jonathan Chait has it just about right.

If health care passes, will it be a grand historical achievement, or a crushing disappointment? The answer, I predict, will be both. The American health care system is an indefensible morass of waste and cruelty. The distance between the status quo and the ideal is therefore so vast that we could—and probably will—end up with a reform that massively improves the system, while coming nowhere close to the ideal.

Tod Gitlin Sums It Up

I was going to post about Obama’s speech this morning, but Tod Gitlin has already said it, and said it best.

He sounded like a winner. Like all great preachers, he started methodically and built to crescendos. The Republican responder, Charles Boustany of Louisiana, sounded like a whiner, crying, Deficit, deficit, and government-run, government-run, and built toward nothing. Obama charged the Republicans with specific lies. He made the obligatory gestures toward bipartisanship, including the unexpected shout-out to John McCain, who had campaigned in favor of mandatory catastrophic insurance–and I don’t want to be cynical about those gestures, even though I think he’s naive about the other party’s intentions–but that’s not where his stresses fell. He was reminding the majority who voted for him why they did that. He was reminding independents that the reason why no progress has been made toward universality, mandates, and affordabiity is Republicans–as with 1935’s Social Security and 1965’s Medicare laws. He was reminding them, as well as the few rational Republicans left, that the insurance companies are not the glories of American value.

He did not sound like a patsy. He offered specific programs but the peroration was clear: he stood for values and national character. If he went too easy on the insurance companies for my taste–his audience could have used the information that Americans pay insurance companies twice as much as they pay doctors–he took a proper jab at Republicans (they know who they are) who make up the party of fear. You can say that he’s still not willing to talk to Americans straight about the need to limit high-tech medicine for the very old and very frail. Presidents won’t do that.

But he bet on the strength of the American character. It was his finest public moment since the Inaugural. I’m betting national decency wins.