Around the Concord Coalition offices today (the day after the big speech) my colleagues and I were talking about how President Obama likes to make it sound as if all we have to do to save health care costs (to “bend the health cost curve”) is cut the “waste” and “abuse” that no one should want anyway. That’s how he can claim his plan would reduce federal health spending without cutting any federal health care “benefits”–because it wouldn’t cut any spending that actually “benefits” people.
But as I said late last night, one man’s “waste” is another man’s precious benefit. It seems there are a lot of different meanings in different people’s minds when they hear the terms “waste” and “benefits.” So what we really need to do to better inform the health reform debate is to better define those terms and the grey areas between them, and then get the Administration and the other policymakers in town to explain exactly what it is they would cut and what they would not.
So I’ve come up with a “workbook” exercise of sorts for the policymakers to “fill in” that could really help us better understand what it is they’re proposing and better figure out whether we’re willing to accept the tradeoffs their policies imply. Here it is:
FILL-IN-THE-DETAILS INSTRUCTIONS for “EconomistMom’s Health Care Reform Workbook”:
Step 1: Consider this spectrum of the value or wastefulness of health care spending, from most beneficial down to most wasteful:
- “Valuable Benefits”: many people like them, and they’re essential;
- “Unnecessary Benefits”: many people like them, but they can live without them;
- “Unworthy Benefits”: some people might like them, but they are “uneconomic” in that they wouldn’t pass a cost-benefit test;
- “Beneficial Waste” (not necessarily an oxymoron): only a few people like them, and they fail the cost-benefit test miserably, because there’s a lot of “deadweight” loss in getting the “benefits” to those few people;
- “Complete Waste”: no one “likes” them because the spending is completely thrown into the wind–pure and utter waste.
Step 2: List specific examples of health care spending that you consider to fall under each of the five categories above. (e.g., “Medicare spending that goes toward these procedures: [list] or to those households making $_____ or more.”) More points/extra credit given for greater specificity and more examples.
Step 3: “Draw the line” somewhere within the list above that allows you to fill in these blanks:
“Our plan, by having the federal government stop paying for/subsidizing any health care spending below the line, is estimated to reduce federal health spending by $___ billion over the first ten years AND $___ billion over the next ten years. Coupled with a sustainable new source of revenue from [name the sensible revenue-raising policy], our plan would expand health coverage to ___ million more Americans, including/not including (circle) illegal immigrants, in a deficit-neutral or (better yet) even deficit-reducing manner over the first ten years and beyond.”
Step 4: Listen to the cheers or the boos…
Step 5: If cheers outweigh boos, CONGRATULATIONS. You’ve just come up with a fiscally-responsible bill that might actually pass. If boos outweigh cheers, go back to Step 1.
Ok, so who’s gonna try first? President Obama? I’ll even let you have Peter take the test for you.