The right eloquence needs no bell to call the people together and no constable to keep them. ~ Emerson

Wednesday, July 29, 2009

Trimming the Fat

The Link Between Cutting Healthcare Costs and Massive Government Intervention Is Closer than Many Realize

Reports of increased costs associated with the Congressional healthcare reform plans written by progressives have alarmed the public. In the midst of all this generated anxiety, moderates and conservatives see an opportunity to present themselves as brakemen on a runaway spending train.

Three Republican members of the Senate Finance Committee have teamed up with an equal number of centrist Democrats and announced they are close to compromise on an alternate bill that places reducing costs within the existing system ahead of universal coverage. Eliminating any type of government-run public insurance option, a source of anathema to most Republicans, is central to their proposal, as well as eliminating mandates for even large companies to provide health insurance to all employees.

Meanwhile, in the House, seven Blue Dog Democrats on the Energy and Commerce Committee have stalled that panel into inaction by demanding more cost savings.

President Obama signaled he might be willing to compromise on these points if he deems the counterproposals equally effective. However, most liberal Democrats have cried foul, insisting any such changes effectively gut reform.

Former DNC Chairman Howard Dean’s comments were typical. “This compromise does nothing except reform health insurance,” he told reporters. “It is not worthless because it makes [health insurance] fair, but it is not healthcare reform.”

The Washington Post’s Harold Meyerson agrees, today writing that the Senate Finance Committee seemed “on track to produce a plan that falls short of universal coverage, omits the savings that a competitive public plan would create, and might actually make health care harder to get. The only justification for such a bill is that it might win some Republican support. Why that is a goal worth pursuing at the expense of decent reform, however, is not at all apparent.”

Nonetheless, cost-cutting approaches are likely to garner enthusiastic public support. A recent Rasmussen poll found that Americans viewed reducing existing healthcare costs as more important than achieving universal coverage by a hefty forty point margin.
Common complaints about reforms leading to universal coverage include a Congressional Budget Office projection they will initially increase healthcare costs rather than reducing them and result in more government intrusion and loss of individual choice. In addition, the CBO insists the progressive plans will do little to fight the underlying drivers leading to healthcare cost inflation.

Let us consider one such driver. A 2004 study, published in the journal Health Affairs by healthcare economist Kenneth Thorpe of Emory University, tracked three hundred and seventy medical conditions and found a mere fifteen accounted for over fifty percent of the $200 billion rise in health spending between 1987 and 2000.

The top five conditions – heart disease, mental illness, pulmonary conditions (e.g. asthma, allergies), cancer, and hypertension – alone accounted for a third of the increase. The remaining ten conditions, in descending order of contribution, are trauma, cerebrovascular disease, arthritis, diabetes, back problems, skin disorders, pneumonia, infectious disease, endocrine disease, and kidney disease.

The Washington Post hailed the study, noting, “By documenting the most costly conditions, Thorpe’s findings offer the beginnings of a road map for controlling health costs.”

Now, five years later, researchers have drawn a great big Interstate highway down the middle of that roadmap. A study just released this week by the nonprofit research group RTI International, again published in Health Affairs, identifies obesity as the key risk factor increasing the likelihood of virtually all those most expensive health complaints.

Obesity-related health spending topped $147 billion last year, double what it was nearly a decade ago. Obesity care now constitutes over nine percent of all healthcare spending, up from six and a half percent over the past ten years. The RTI study found medical spending averages $1,400 more per year for an obese person than someone of normal weight.

Thorpe is already in agreement with RTI’s conclusions. This past May, he testified before the Senate Health, Education, Labor, and Pensions Committee that six obesity-related medical conditions – diabetes, hypertension, hyperlipidemia, asthma, back problems and comorbid depression – are “key factors driving growth in traditional FFS Medicare.”

The problem of obesity is widespread in our nation, with about a third of adult Americans qualifying as obese. The obesity rate rose thirty-seven percent in the past decade.

For those fearing big government intrusions because of healthcare reform, the identification of obesity as the number one healthcare cost driver is not good news. Although some researchers have begun to reveal genetic predispositions and chemical imbalances that cause some individuals to eat more and/or convert food into fat more rapidly than others, the majority of the medical and healthcare community continues to regard obesity as a modifiable lifestyle choice.

“We have ways of changing behavior and changing those health outcomes so that we don't have to deal with the medical consequences of obesity,” explains Jeff Levi of the nonprofit Trust for America's Health, which advocates community-based programs that promote physical activity and better nutrition.

In addition, the CBO and other economic studies conclude people too seldom heed the warning signs identified in traditional preventive care, such as regular screenings and checkups, to result in any significant cost savings.

The bottom line here is that those seeking to combat healthcare cost inflation must conclude the main reason we’re sick is because we’re fat and the main reason we’re fat is because we’re lazy, over-privileged, and stupid. The “hard choices” faced by government regarding healthcare reform are to force us to make the hard choices for a healthier diet and lifestyle that we are apparently unwilling to make for ourselves.

Instead of the cost/availability of health insurance tied to age and family medical history, as it often is today, how about tying it to weight and body mass index? How about an income tax penalty or surtax along the lines of the Alternative Minimum Tax, using a formula tied to how many pounds each of us exceed the “ideal weights” for our heights? How about national ID cards we swipe at pre-approved establishments that prove we are putting in a minimum hours of exercise per week at the gym?

How about hefty federal sales tax on Big Macs, Coca-Cola, and ice cream, similar to the ones levied on consumers of products like tobacco and alcohol? How many small businesses do you think that might drive out of operation and how many total jobs will be lost along the manufacturing and supply chain?

In many ways, these dire predictions are as much a bugaboo against this type of healthcare reform as the often-raised specter of “socialized medicine” against a government-run public insurance option. Yet just as cold-blooded bureaucrats could dictate who really needs various tests and treatments, cold-hearted economists could just as easily dictate who must shape up or ship out their hard-earned incomes.

In the end, a government-run public option has less to do with the type and quality of healthcare provided and much more with how Americans might obtain their health insurance. It is only when we pursue healthcare cost drivers and seek to contain/eliminate them that we begin to consider reforming the type and quality of healthcare provided and flirt with massive government invention into private decisions feared by so many.

If we want to trim the fat from healthcare costs, the best place to start is by trimming the fat from our waistlines. The old clich̩ remains the rule for healthcare reform Рwe cannot have our cake and eat it too . . . at least not without paying extra.

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