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Health Care Reform: Questions for the President

by Michael F. Cannon

This article appeared on ABC News.com on June 24, 2009.

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Health care reform is on life support," says Rep. Jim Cooper of Tennessee. And he's a Democrat.

President Obama has spent months building momentum for health care reform. But when the Congressional Budget Office put the price tag near $2 trillion, it stopped reform dead in its tracks.

What Senate Finance Committee chairman Max Baucus, D-Mont., once called "nearly inevitable" now seems much less so — and that's before supporters have confronted the really tough questions.

If America already spends too much on health care, why are you asking Americans to spend even more?

Before this debate is over, Obama should answer a few questions about his plans for reform, including:

• Mr. President, in your inaugural address and elsewhere, you said you are not interested in ideology, only what works. Economists Helen Levy of the University of Michigan and David Meltzer of the University of Chicago, where you used to teach, have researched what works. They conclude there is "no evidence" that universal health insurance coverage is the best way to improve public health. Before enacting universal coverage, shouldn't you spend at least some of the $1 billion you dedicated to comparative-effectiveness research to determine whether universal coverage is comparatively effective? Absent such evidence, isn't pursuing universal coverage by definition an ideological crusade?
• A draft congressional report said that comparative-effectiveness research would "yield significant payoffs" because some treatments "will no longer be prescribed." Who will decide which treatments will get the axe? Since government pays for half of all treatments, is it plausible to suggest that government will not insert itself into medical decisions? Or is it reasonable for patients to fear that government will deny them care?
• You recently said the United States spends "almost 50 percent more per person than the next most costly nation. And yet ... the quality of our care is often lower, and we aren't any healthier." Achieving universal coverage could require us to spend an additional $2 trillion over the next 10 years. If America already spends too much on health care, why are you asking Americans to spend even more?
• You have said, "Making health care affordable for all Americans will cost somewhere on the order of $1 trillion." Precise dollar figures aside, isn't that a contradiction in terms?
• Last year, you told a competitiveness summit that rising health care costs are "a major anchor on the ability of American business to compete." In May, you wrote, "Getting spiraling health care costs under control is essential to ... making our businesses more competitive." The head of your Council of Economic Advisors says such claims are "schlocky." Who is right: you or your top economist?
• You recently told an audience, "No matter how we reform health care, we will keep this promise to the American people. ... If you like your health care plan, you'll be able to keep your health care plan, period. No one will take it away, no matter what." The Associated Press subsequently reported, "White House officials suggest the president's rhetoric shouldn't be taken literally." You then clarified, "What I'm saying is the government is not going to make you change plans under health reform." Would your reforms encourage employers to drop their health plans?
• You found $600 billion worth of inefficiencies that you want to cut from Medicare and Medicaid. If government health programs generate that much waste, why do you want to create another?

Michael F. Cannon is director of health policy studies at the libertarian Cato Institute and coauthor of Healthy Competition: What's Holding Back Health Care and How to Free It.

More by Michael F. Cannon
• You and your advisors argue that Medicare creates misaligned financial incentives that discourage preventive care, comparative-effectiveness research, electronic medical records, and efforts to reduce medical errors. Medicare's payment system is the product of the political process. What gives you faith that the political process can devise less-perverse financial incentives this time?
• You claim a new government program would create "a better range of choices, make the health care market more competitive, and keep insurance companies honest." Since when is having the government enter a market the remedy for insufficient competition? Should the government have launched its own software company to compete with Microsoft? Are there better ways to create more choices and more competition?
• When government entered the markets for workers compensation insurance, crop and flood insurance, and disaster insurance, it often completely crowded out private options. Do you expect a new government health insurance program would do the same?
• You have said there are "legitimate concerns" that the government might give its new health plan an unfair advantage through taxpayer subsidies or by "printing money." How do you propose to prevent this Congress and future Congresses from creating any unfair advantages?

President Obama needs to address questions these directly. The health of millions depends on his answers.