President Obama has pointed out many serious problems with American health care: the millions of un- and underinsured, substandard quality, and unsustainable cost growth.
Of these three problems, the easiest to address is the un- and underinsured. Quality is more difficult, but trends are encouraging, and the president’s initiatives in health information technology and comparative effectiveness should help.
The most difficult problem is cost growth. Obama has correctly pointed out that the historical rate of growth is unsustainable. Here in Massachusetts we have come close to universal coverage, only to see that progress threatened by spiraling costs that we cannot afford. Unfortunately, we do not know how to lower those rates except for a limited period without curtailing beneficial services — some of which have yet to be developed. Hence, we risk losing more in benefits than what we save.
Yes, American health care is wasteful. Administrative costs are excessive. Too much care at the end of life is pointless. Some regions spend more than others with little or nothing to show for it. Obama has correctly said we should eliminate as much of this waste as possible. But we don’t know how to carry out a surgical strike on waste. Crude measures such as spending caps could reduce benefits more than they save. And because there is only so much waste to get rid of, even a surgical strike only changes the growth rate while the waste is shed — a free snack if you will.
Many Americans believe that they have a right to any medical service that they and their physician agree could benefit them and that public or private insurance should pay for most of the cost. Lowering the steady-state growth rate of medical costs is incompatible with that view, at least if new beneficial treatments continue to be developed at historical rates. Currently, an elected official who says, “We can’t keep having it all,” risks defeat. Obama’s leadership task is to make it safe to acknowledge this truth in public.