Just the Facts Please Sir

The President was correct when he stated that the health care rhetoric had become over heated. 
Many on the right have lost track of what they don’t like about the bill and many on the left, what they do like about the bill.  The discourse has turned purely dogmatic and bitterly partisan.

The left likes that the bill will provide 30 million more Americans with health insurance.  They like the CBO analysis, which says that the bill will reduce the deficit over the next 10 years.  The left views the health care crisis as primarily a crisis of access.

The concern from those on the right is that the legislation will not bend the cost curve down and our nation’s health care costs will continue to climb.  Patients still have little incentive to shop, or to behave like rational consumers looking for the best price.  Health care providers still have little incentive to compete for business based on price.  Until natural pricing mechanisms are allowed to function in the allocation of health care services, costs will soar.  The right views the health care crisis as primarily a crisis of cost.

Regarding the rhetoric, it is hard to know where to begin.  The president sold this bill as absolutely anything that it needed to be in order to get it passed.  Claims included the following:  The bill will contain health care costs and reduce the deficit.  People can keep their existing health care plans.  Fraud and waste will be reduced even though tens of thousands of new government employees will be needed.  Commercials seemed to suggest that without the bill, there would be a raft of new cases of childhood leukemia.  Health care insurance costs will be contained.  The Republican alternative was to suggest that patients die quickly.  Every American will be granted three wishes.  Although I made up that last point, it would not have surprised me to hear it.

People are completely right to be upset.  The arrogance with which the bill was passed is extraordinary.  There is an unmistakable sense that the White House knows what Americans want and need more than Americans do.  The instinct to fight back against this unprecedented growth of bureaucracy and federal power is entirely appropriate.  However, it is important to stay focused on why this new law is so harmful, what is missing from it and what a tenable alternative looks like.  Such information will transform powerful rhetoric into persuasive arguments that will influence key independent voters.

The inputs into the CBO analysis were incorrect.  Garbage data was used for the budget estimates and garbage results came out.  $245 billion in savings comes from future cuts to physician reimbursements for Medicare.  The sustainable growth rate (SGR) formula that Medicare uses to set Part B reimbursement rates calls for such cuts every year.  The CBO analysis assumes that these cuts will be enforced, but they never are, nor will they be.  The CBO analysis also assumes that 10 years of spending cuts and higher taxes will pay for only 6 years of spending (many benefits don’t kick in until 2014 or later).  This is like saying that you can save money by financing a car for 10 years that you can only drive for 6 years.

Carping about 30 million uninsured Americans is also misleading.  Although it is true that 30 million are uninsured, 30% of the uninsured earn over $75 thousand per year.  Another 30% are eligible for employer-sponsored programs that they do not use, mostly because they’re young and healthy.  There are also millions of people who are eligible for government programs but have not enrolled.  There is some overlap in these numbers, but by most estimates there are between 5m and 10m people who are chronically uninsured and have really "fallen through the cracks".   That’s about 3% of our population, at the high end of the estimate.  Most Americans are simply not enthusiastic about abandoning the most technologically advanced and responsive health care system in the world to benefit 3% of the population.

The new law will have the unintended effect of stifling medical innovation, and will reduce incentives to enter the field of medicine.  Will innovators invest tens or hundreds of millions of dollars of capital to create a new drugs or medical devices if they are not allowed to determine the price of their innovations?  Will as many students be willing to assume tremendous debt and go through years of demanding education if the government will largely determine their compensation?

This debate is far from over and it is important that opponents of the new health care law buttress their passion with facts and ideas.  Americans deserve a law that allows pricing mechanisms to function in order to control costs, and a bill that is good enough for the President and his staffers to not be exempted from.