World Health Care Congress
April 19, 2006
Bush Administration’s Health Reform Plan Allan Hubbard, Director, National Economic Council, The White House
Allan Hubbard: …there are three visions, but the third vision is not sustainable, the third vision being the status quo… I promise you, things are going to change, and we can go one of two ways. One way… is a single payer system, basically expand Medicare to take over everything. Medicare will set prices. They will find that it costs more than they expect, so they will cut back reimbursement. They will cut back the options that people have in terms of doctors, in terms of procedures. Eventually care will be rationed, and that’s one vision, and that’s what happened in every other country that had a single payer system… Or we can go to a consumer-directed health care system where the consumer is incentivized to be a wise consumer, incentivized to care about price, to care about quality… That is the vision of this president. We believe health savings accounts are exactly the way to go, with high deductible, low cost health insurance policies, and then… tax deductions for your contributions to your health savings accounts, which means what you pay for out-of-pocket gets the same tax advantage as what’s paid for by insurance, and then you have an incentive to be a wise consumer…
Later…
Stuart Altman, reading a question from the audience: You talked about consumers as a way to reduce prices and increase efficiency. What about the medical emergency situation, when the patient doesn’t have a choice about when, where, and what type of care takes place?
Allan Hubbard: Obviously it doesn’t work there, and I think we all know that, but that’s the exception. You can only shop in a non-emergency.
Later, in response to another question…
Allan Hubbard: Now for the chronically ill, to be perfectly frank, that is the biggest challenge in health care. The president has two proposals on that. And when I talk about chronically ill, it’s the people who have predictably high costs year in and year out… The president’s proposals are the following – an employer provided health savings account… it will put extra money into the health savings accounts of the chronically ill… And then, secondly, the president wants to provide 500 million dollars to the Secretary of HHS to be able to award to up to ten states a year, for innovative ideas in accommodating the chronically ill. But, I want to be perfectly frank, the chronically ill is a problem that is very difficult to solve.
http://www.worldcongress.com/events/NW600/index.cfm
Comment:
By Don McCanne, M.D.
So the president’s proposal for consumer-directed health care doesn’t work for acute problems since individuals are not in a position to be informed consumers, and it doesn’t work for chronic disease since they haven’t figured out a way to pay for it.
Since it doesn’t work for either acute or chronic problems, apparently the president’s proposal works only for those without significant medical needs. Are healthy individuals really the appropriate target for health care reform?
Why would the administration support a reform proposal that they quite frankly concede will not work? It’s because they recognize that the status quo is not sustainable, and the only other realistic option is a single payer system. Although Hubbard drags out the canard of rationing, it is only because their bogeyman bag is otherwise relatively empty. Their real reason for opposing single payer is that their anti-government ideology overrides all other considerations and trumps reform that they know will work, merely because it is a government solution. Should reform be driven by ideology, or by health policy science?
Allan Hubbard is right about one thing. He promises us that there will be change. He has explained why the consumer-directed nonsense cannot lead us to reform. It looks like it will have to be single payer, by default.