There’s a chicken and egg aspect to health care reform which often frustrates lawmakers and policy makers. To achieve universal coverage the cost of health insurance must be affordable. To make coverage affordable you need universal coverage. So which comes first?
My take is that affordability has to come first. You cannot require people to buy something they cannot afford. When a pen is out of ink, all the regulations in the world won’t fill it again. This means the government has to make coverage affordable, most likely through subsidies of some kind. Subsidies are expensive And the budget, already groaning under the weight of the recession, two wars, an economic stimulus package, existing entitlements, and much, much more. Congress will be hard pressed to find the funds needed to provide the premium support required to get close to universal coverage.
Consequently, affordability needs to come first. This explains, in part, Director of the Office of Management and Budget Peter Orszag’s consistent focus on the as much as $700 billion in medical spending each year that goes towards services which do not improve health outcomes. He began pushing lawmakers on this issue when he was Director of the Congressional Budget Office and he continues in his new role at the OMB.
The opportunity for health care reform to reign in medical costs received a substantial boost recently with the publication of an article in The New Yorker by Dr. Atul Gawande, a Boston surgeon who is also a staff writer for the magazine. Titled “The Cost Conundrum,” the article described Dr. Gawande’s exploration of medical practices in McAllen, Texas. That community spends more per person on health care than anywhere in the country with the exception of Miami, Florida which has higher labor and other costs. McAllen’s spending is twice that of nearby El Paso, Texas, even though the two areas have similar demographics and similar outcomes. The explanation, Dr. Gawande discovers, is the entrepreneurial culture of the community’s physicians. They maximize their incomes, but fail improving the health of their patients.
The article has been cited by President Barack Obama (who, it is said, has made the piece required reading for his staff), members of Congress, pundits and policy wonks. Few magazine articles have had comparable impact on the health care reform debate.
Those wanting to learn more about what he discovered in McAllen will enjoy an interview with Dr. Gawande on Public Radio’s Fresh Air. During the nearly 30 minute segment, the doctor expands on his article providing insights from his own practice.
Dr. Gawande has made a valuable contribution to the health care reform debate by shedding light on the correlation between community medical practices, health care costs, and health outcomes. For anyone interested in health care reform, his Fresh Air interview is well worth the investment of time.