Peter G. Peterson Sounds The Alarm On Healthcare Deficit

It’s the eve of President Obama’s healthcare speech to Congress. So the Peter G. Peterson Foundation (best known for sounding the alarm on America’s astounding national debt and its future implications in I.O.U.S.A.) saw an ideal opportunity to release a fiscal analysis of House healthcare reform bill HR 3200.

You can read a summary here. Or download the entire 50 page report here. And beware of conflicts of interest (see "Protesting Too Much?", below).

Coverage Up, Cost Up

Basically, the analysis found that HR 3200 would:

“…expand health insurance coverage, but it would also increase the nation's total health spending.”

Nothing profound in that statement, eh?

Specifically, it found that 30 million people would gain healthcare coverage (assuming full bill implementation and enrollment), a 60% decrease in the number of uninsured. It also found the bill would pay for itself over the first 10 years. For the next 10 years beyond that (2020-2029) the net federal cost would be $1 trillion.

PGPF’s bottom line is this:

“…this study shows that the top priority needs to be reducing total health care costs and the rate of increase in future costs.”

Well, no argument from me on reducing healthcare costs. But let’s not juxtapose increasing coverage with reducing healthcare costs, as if we must sacrifice one to serve the other. Especially when there is a glaring conflict of interest in this report (insurer in sheep's clothing anyone? More on that in a minute).

There are better long-term ways to do this besides cutting coverage and options, including 1) paying for quality, not quantity, 2) reducing and standardizing reimbursement, and 3) finding effective AND cost-effective treatments. And no, none of these areas is covered adequately in HR 3200.

For instance, on #3, back pain affects 80% of people throughout their lives. Newsweek reported that the total cost to the US in 2004 was $100 billion in medical bills, disability, and lost productivity. Yet NONE of the go-to treatments, including spinal fusion, artificial disc replacement, epidural injections, chiropractic etc. have been found to be effective when rigorously studied.

Cutting out all that ineffective treatment could just about pay for the annual cost of healthcare reform!

Protesting Too Much?

There is also some conflict of interest in this analysis. Here is the lowdown:

PGPF is a legitimate, fiscally conservative organization trying to educate the public on the enormously complex topic of national debt and its effects on our daily lives. It takes a balanced approach by tackling how HR 3200 meets the two objectives of health reform:

1. Expanding coverage to most of the US population
2. Controlling ballooning healthcare expenditures

However, The Lewin Group, which prepared the report, is wholly owned by UnitedHealth, one of the largest private health insurance companies. So any alarmist language over HR 3200 increasing the deficit has to be taken with a grain of salt.

After all, measuring the effect of an HR 3200-like bill with NO public option (Lewin Group’s parent company is working hard towards this end) is literally impossible. Why? Because if we hand mandated coverage over to private insurance companies without competition from an efficient government source (proven for 44 years by Medicare, VA, MHS etc.), no one has any control over healthcare costs but private insurers.

Would you hand your wallet over to UnitedHealth with no strings attached or safety valves in place? Well, if you’re against the public option but for the consumer protections in proposed healthcare reform, that’s what you’re signing up for. Just thought you would like to know.

Now, why don’t we propose some answers instead of playing Whack A Mole with any hardy souls who put forth a good but less-than-perfect solution.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future