• Would repeal be healthy? Uwe Reinhardt responds

    The following is a guest post by Uwe Reinhardt, the James Madison Professor of Political Economy Professor of Economics and Public Affairs at Princeton University’s Woodrow Wilson School and regular contributor to the Economix blog of the NY Times.

    Austin Frakt, whose views I greatly respect, takes me to task for assuming that, if the Republicans managed to repeal the Affordable Care Act (ACA) – or the Supreme Court did it for them – Republicans then would act responsibly and solve the problems that the ACA tries to solve.

    I tacitly did make that assumption, and that may have been irresponsible.

    After all, if we judge Republicans by their style of governance during the period 2001-2006, when they controlled the entire Congress and the White House, we might not so hastily make that assumption. One can hardly call their domestic policy – both fiscal policy and health policy – responsible.

    In fiscal policy, they acted like a frog at the bottom of a well who sees only sunshine above – to use my wife’s description of that policy. It was “spend, spend – borrow, borrow” and much of the latter from foreigners.

    In health policy, virtually nothing was done to bring relief to the hard-pressed lower-middle class which is being systematically priced out of health care. True, the elderly got relief through the Medicare Modernization Act of 2003 (MMA ’03) – a sizeable entitlement in which our children and grandchildren were made to subsidize heavily the prescription drugs used by today’s elderly. It was fully deficit financed. The MMA ’03 is currently projected to add close to $1 trillion to the federal deficit during 2010-19, something so easily forgotten by folks who now wring their hands over the possibility that the ACA might ultimately add to some billions (nothing like the MMA ’03) to the deficit. Anyone who would call the financing of the MMA ’03 responsible governance requires remedial English, in my view.

    Finally, although I give journalists my honest assessment that the ACA does not do much if anything to control the growth health care spending – other than developing some tools that might help in that quest – I would not blame the President or his allies on the Hill for it.

    Instead, I would ask critics who accuse the President of having failed on that score – business executives prominently among them: what would you have the President do?

    Any attempt to reduce Medicare reimbursements immediately triggers the outcry that the government shifts costs to the private sector – a No No.

    Any attempt to reduce utilization in the public programs immediately triggers outcries over “rationing,” “killing Granny” and “death panels.” Another No No. The Washington Times carried a lead editorial entitled “Efficiency in health care can be deadly.” To underscore its thesis that cost-effectiveness analysis is a Nazi tool, it had a picture of Adolf Hitler right next to its editorial.

    Finally, any attempt by government to control prices or utilization in the private sector would trigger immediate outcries over a “government takeover of medicine.”

    Literally the only thing acceptable to the critics seems to be ever more rationing by income class through very high deductibles and coinsurance.

    So I would be the last to criticize the drafter of the ACA for not doing much about controlling health spending. The American people are not ready for it. They’ll experience a few more dire teaching moment before they can debate cost-containment responsibly.

    • Thanks for the response Professor. I am sad to say that I agree with you. I do like your idea of trying to make the right come to grips with the issue and make concrete proposals, and if it worked it would be great. I just don’t think they are ready to do that yet.

      BTW, I have slowly come to agree, in my own plodding way, that you are correct about private insurance driving health care cost inflation. Unfortunately, I think it makes health care reform even harder, and it was already difficult. Keep up the good work. This doc learns a lot from you and Austin.