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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Health Care and the Federal Budget

Even as we await the effects of the economic stimulus package, the Obama administration’s first federal budget is due to be released next week. And according to some rich hints dropped by Office of Management and Budget director Peter Orszsag to Politico‘s Ben Smith, that budget is likely to focus to a surprising extent on creating a foundation for universal health care:

Though the budget’s details have been closely held, Orszag revealed, in broad terms, two: a continued focus on health care policy and a plan “to restore the nation to a sustainable fiscal trajectory over the five-to-10- year window.”
The next step on health care, he said, is a set of “changes to Medicare and Medicaid to make them more efficient, and to start using those programs more intelligently to lead the whole health care system.”
With a growing body of research finding some practices more cost-effective than others, the program’s reimbursement rules can be used to force changes at those hospitals — a sort of back door to health care reform.
“Medicare and Medicaid are big enough to change the way medicine is practiced,” he said.

This suggests steps to link health care cost containment to a major shift towards adoption of medical best practices, including outcome-based medicine, chronic disease management, and prevention, all big preoccupations of Orszag when he ran the Congressional Budget Office.
So: a move towards universal health care in a budget that will reflect widespread fears over the fiscal implications of the stimulus package? Yes, because of the vast implications of medical cost containment for the federal budget.
The Obama administration’s focus on convincing Americans that universal health care will actually save money over the long run is likely to be a central feature of next week’s “fiscal responsibility summit,” which has been advertised as a first step towards “entitlement reform.” As Jonathan Cohn explained at The Treatment blog yesterday, progressives fearing some sort of change-Social-Security agenda should calm down; the “summit” will largely be about Medicare and health care costs.
As Ben Smith notes, next week will be a really big week for Peter Orszag. Comprehensive health care reform foundered in the 1990s in part because Americans weren’t convinced that the status quo would wind up being far more expensive and less reliable. Making that case again, and more effectively, will be very important for the administration and the country.

One comment on “Health Care and the Federal Budget

  1. MadamMijanou on

    The US Health Care System – basically a “for profit” system for Insurance Companies and Hospitals. It’s capitalism at it’s very worst. As AIG and certain auto companies and banks are “too big” to fail, will that be the outcome for this system we call health care? For those of you not yet on Medicare, it is a pretty good system. It’s been paid for by weekly deductions from my paycheck – my doctor sends in one bill to one company and gets a check in the mail for his services. What went wrong? The universal word for what has gone wrong with capitalism, “GREED”. Greed by the doctors first and foremost who saw a cash cow, and overburdened and defrauded the system with too many tests, fraudulant diagnosis and a system that found it more expedient to let the false claims go than to fight them. Then the Hospitals piled on. Perhaps we should start from the beginning. Perhaps doctors who put care before money would be a good place to start. A hospital system that is run as a “not for profit”, and gave great concern to their overburdened nursing staff, would be a place to start with them. Nurses – who wants to be a nurse today? My goodness they are treated like slaves and degraded by the doctors, but who cares for you in the hospital? Is it the doctor who sticks his head in your room at 10:30PM and says – hey how you feeling – or is it the nurse that takes your vitals and gives a kind word and gets you back on your feet? As our jobs disappear it’s a great time to offer scholarships to nursing students. Give a nurse a boost up financially. Pay them well, give them great status. There would be less waste and fraud if Nurses had more to say, and less greed. It’s time to give Medicare all the ammunition it needs to fight the fraud – its time to put all Americans into a Medicare System.


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