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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Health Care Dilemmas

While the AMA endorsement of the House bill represented yesterday’s good news on the health care reform front, the less-so-good news was testimony by CBO director Douglas Elmendorf that the plans CBO has reviewed lack sufficient measures to reduce overall health care costs. This testimony will, of course, be brandished as a club by anyone opposing health care reform.
The biggest problem is that some of the very people wailing about costs oppose the available cost-containment measures, including some already in the existing bills. The Blue Dogs, as J.P. Green reported yesterday, even as they threaten to defeat the House bill based on cost concerns, want higher reimbursement rates for rural doctors under Medicare, and also want higher exemptions for small businesses that would otherwise be subject to play-or-pay costs.
And some of the most effective cost-containment provisions are just politically toxic. Elmendorf made it clear he thinks Congress should limit the tax exemption on employer-sponsored health benefits, which would not only generate revenues to help pay for expanded coverage, but would also arguably reduce a subsidy for over-utilization of health services. The trouble is, this idea is opposed by Speaker Pelosi, Majority Leader Reid, the White House, the labor movement, and (according to every poll) a large majority of the American people.
Another oft-cited cost control measure is called “comparative effectiveness research,” which would make federal reimbursement rates for specific procedures dependent on their medical effectiveness and their cost effectiveness. Many physicians bitterly oppose this approach as interfering with the doctor-patient relationship and their basic responsibility for diagnosis and treatment.
Ezra Klein today offers a useful quick summary of cost control options, and suggests that any politician who complains about the cost of health care reform should be forced by reporters to explain which of these options they favor.
The only problem is that most Republicans and maybe even some Democrats wouldn’t have big problems just sticking with the status quo, which health reform critics are increasingly prone to defend as the debate continues. That inertia, and the willingness to promote irreconcilable goals, are probably the two biggest obstacles to real congressional action on health reform in this congressional session.

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