Tough Choices Ahead: Candidates Ignore Pain of Needed Cuts to Health Costs

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Commentary on The Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey on the Presidential Candidates Health Reform Proposals by Dallas L. Salisbury, president and CEO of the Employee Benefit Research Institute and a member of The Commonwealth Fund Commission on a High Performance Health System.



The consensus of employers, government officials, academics, health consumers, presidents, and presidential candidates over the past 70 years has been that the U.S. health care "nonsystem" is broken and needs to be fixed. President Franklin D. Roosevelt's tenure saw the first proposals for universal health insurance. The creation of Medicare and Medicaid in 1965 was seen by most as major reform, but by 1968 President Nixon was talking of a health care cost crisis, demanding more reform and proposing a universal coverage program.

That did not happen, but the HMO Act of 1973 did. The nation experimented with managed care just long enough to determine that although it did hold down costs, it also limited individual choices and allowed tough decisions on care that consumers did not like. The managed-care backlash largely resulted in the replacement of prevention-focused, total-service health care organizations with complex networks of providers and complicated reimbursement and cost-share provisions. Choice increased, tough decisions decreased and costs increased along with rates of utilization.

More than a decade later, the Clinton administration proposed health care reform in the midst of that managed-care backlash. The proposals were sufficiently complex and controversial that they did not become law, but at one point they did bring renewed focus on universal coverage, a mantra of the current campaign.

Researchers at the Heritage Foundation, a conservative think tank, suggested in that debate of the early 1990s that the answer was an individual mandate, an end to employment-based coverage and major changes in the tax treatment of health insurance benefits. They proposed that the Federal Employees Health Benefits Program was a perfect model, and that individuals could be allowed to buy into it if nothing else, as a replacement for employer coverage.

This year, most of the Democratic candidates have embraced a number of the Heritage Foundation proposals, though they don't agree that employers should be closed out of the system. Most support an individual mandate. Most would support the option of purchase into the federal employee program. Most support some tax policy modifications. Sen. Barack Obama (D-Ill.) does not favor a mandate, but did say in New Hampshire that his first preference was a single-payer system—he just doesn't think it could become law.

Republican candidates likely do not know that the individual mandate was a conservative think tank proposal. The head of the Heritage Foundation, Edwin Feulner, was a domestic policy consultant to President Reagan, and Edwin Meese, a top aide to Reagan and later attorney general, has been affiliated with the foundation since the end of that administration. As recently as the final New Hampshire Republican debate the candidates condemned the "socialist" proposal of an individual mandate "coming from the Democrats." In fact, staffers at Heritage were key actors in Gov. Mitt Romney's Massachusetts health care reform.

Candidates of both parties talk of the need to control health care costs, expand the focus on wellness and prevention, and modernize health information technology as they also talk of increased individual choice and responsibility for decision making. They are likely influenced by campaigns such as the Partnership to Fight Chronic Disease, and the ugly fact that chronic disease is where most of the cost in the system resides. Yet it is individual choice that has led to the epidemic of obesity and continued high rates of smoking that are tied to cancer and heart disease. Choice has led to much greater use of brand-name drugs, yet we spend billions on treatments related to people's adverse reactions to drugs that in hindsight should not have been prescribed. Yet, neither party's candidates suggest denial of care to those whose own choices create cost challenges.

At the last New Hampshire debate, Republicans noted that an insurance mandate was not needed because even those without insurance would not, and should not, be denied care at an emergency room. Tough love is certainly not part of the present set of health care reform options from candidates of either party.

The Congressional Budget Office recently released a report on future fiscal implications of not finding a way to slow health care costs. Presidential candidates have been long on rhetoric and short on specifics in their call for health care cost control. Republicans mainly suggest that moving to an individually based system where individuals have to pay more will bring a market solution: lower spending. Yet, if most spending is tied to chronic disease—as the data firmly show—deductibles at the levels required for health saving account tax preferences will achieve little total system savings. Democrats mainly suggest universal coverage, better information, and new payment approaches. Again, given the high proportion of total spending attributable to chronic conditions, these changes may improve efficiency and outcomes, but they will not come close to solving the health care cost spiral.

Candidates of both parties seem to be spending most of their time trying to appeal to public wants, with almost no discussion of the dire choices lying ahead if fairly radical and politically unpopular changes are not made soon. The Congressional Budget Office's and the Government Accountability Office's reports of recent months clearly set forth this health care fiscal reality, which, to date, is being totally ignored by candidates in both parties as well as the media covering the campaigns and moderating the debates. At that New Hampshire debate, Romney actually started to touch on some of the core issues and was immediately cut off by the moderator as "getting into the weeds."

Ironically, the health care weeds are exactly where the nation and its leaders need to focus. Real solutions are likely to carry with them far less individual choice, as opposed to more. That is going to be an unpopular prescription and a tough pill to swallow.

The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.

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