THE BLOG

Solons Punt On Health Cost Caps

11/07/2009 12:55 pm ET | Updated May 25, 2011

Congress is making impressive progress toward reducing America's uninsured population, but there's growing reason to believe that new health reforms will do little to constrain costs in the short-run and minimal confidence it will significantly bend the cost increase curve over the longer period.

The message is clear -- even tools that experts say are too modest to get the job done are the subject of ongoing opposition . Optimists who report impressive results think systemic change will take decades .

It is possible that the bill could implement constructive changes over the next decade and equally possible, given the girth of the legislation, that there are some positive surprises that won't be fully understand until well after enactment

But two popular short-term strategies are underwhelming.

Playing the role of Dreamaway ("the popular plan that allows you to eat all you want and lose weight while you sleep") in this legislative drama is the highly polarizing but seldom understood public plan. Proponents argue that by simply subjecting commercial insurers, who sometimes make profits of up to 3% annually, to new competition we'll control healthcare costs, which regularly rise twice that quickly. The math eludes me.

The nearest thing we have to a public plan today is Medicare, which has the power to unilaterally set reimbursement rates paid providers and is nonetheless tottering on the edge of bankruptcy.

The other option is an autopilot, which resembles a dieter putting a lock on the refrigerator that would impose discipline on a reluctant Congress. This scheme, an iteration of the "stop me before I sin again" tactic, would create a technocratic panel that would decide on Medicare spending adjustments could be rejected by Congress only if it voted down the entire package.

The idea here is that members wouldn't be so parochial as to reject such a national plan merely because it imposed some pain on the particular area they represent. Instead, they'd somehow be convinced to impose such local pain as part of comprehensive spending reductions that they'd otherwise reject if permitted to vote on individual elements.

Embracing this approach requires a suspension of disbelief and entry into a new world very different from the one we're familiar with. Proposing it at the very moment that Congress is about to undo automatic cuts created by a different autopilot mechanism it embraced a dozen years ago creates credibility problems.

Ultimately, of course, Congress makes the rules and can revise them at will. Precedent has little appeal and reversals cause no shame. We have little power to stop them before they sin again. And sin they will if that's the price of sidestepping the imposition of painful changes on either providers or patients. They've done it before and they'll do it again. One man's sin is another's equity.

In Washington, we call that responding to constituent concerns.

The game will resume next spring when Medicare's trustees will deliver their annual bleak report. The combination of continued medical inflation coupled with a weak economy will probably accelerate the day of reckoning. We're told that Medicare spending is unsustainable. People say that about American medical spending generally. On the other hand, that challenges the heretofore reliable assertion by Nixon aide Herb Stein who noted that anything unsustainable will ultimately stop.

Today's system has demonstrated remarkable resilience. It is simultaneously as hated and reliable as Congress, which most voters give low marks while voting to re-elect their representative. In this instance, a majority believe the health system is seriously flawed, but are quite satisfied with the care they're receiving.

Responding to the broad concern without undermining satisfaction with the personal status quo requires a strategy still undiscovered.

(An earlier iteration of this, along with comprehensive commentary on health reforms, is posted at Centeredpolitics.com)