Conservative Principles Now

For the past several months, Washington has exhausted every possible method to pass a health care bill designed to increase government’s control over health care.  They haven’t been successful yet, but that may not matter: even without Obamacare, government health spending is set to increase far faster than private health expenditures, surpassing the private sector as soon as 2012.

Today the Centers for Medicare and Medicaid Services released its projections of national health expenditures for the next ten years.  The report shows that spending by the public sector grew much faster in 2009 at 8.7 percent, compared to the private sector which only grew at 3.0 percent.  Though public spending was heightened by the recession, as unemployment caused more Americans to lose employer-sponsored coverage and enroll in Medicaid, the trend is expected to continue into the next decade.

What is more, the report bases its projections on current law.  In the case of Medicare, this underestimates future spending.  Under current law, Medicare is set to reduce physician reimbursement rates by 21.3 percent in 2010.  This would lead to growth in Medicare spending of just 1.5 percent in 2010. However, the likelihood of these cuts coming to fruition is slim to none, as every year, Congress votes to suspend them.  2010 will likely be no different.  A report by Health Affairs cites that, if physician payment rates are held constant, the more likely growth in Medicare will be 5.1 percent in 2010.  Whether or not these physician cuts occur is no small matter—with them, overall health spending growth would be 3.9 percent.  Under the more likely scenario, health spending growth would be 4.7 percent.

Thus far, the debate on health care reform has focused on increasing government spending to reduce the number of uninsured.  But government spending should be moving in the opposite direction.  With government spending growing at a fast clip, rather than overhaul the entire system, lawmakers should channel reform towards high-cost (and largely cost-inefficient) government programs, like Medicare and Medicaid.

Medicare, Medicaid, and Social Security, the three entitlements big spenders, are duly in need of attention from Congress.  These programs will be responsible for unsustainable growth in government spending in the years to come, and will quickly become insolvent.  By reforming entitlement programs, Congress could kill two birds with one stone: achieve long sought-after health care reform and bend the cost curve in health care spending, all the while addressing the fiscal crisis facing the nation due to out-of-control spending.

Rather than increase government’s role in the health care system, Congress should see the current trend for what it is: a cry for reform of existing government health care programs.  Getting public health spending under control would have a monumental effect on overall spending, directly and indirectly reducing costs for all Americans.

After thousands of Americans attended hundreds of townhalls this summer, after the President of the United States delivered a rare speech to a Joint Session of Congress, after endless coverage of legislative markups in the relevant congressional committees, what if the Senate began actual floor votes on the health care overhaul and the drive-by media refused to cover it? Couldn’t happen? It already is.

This week the Senate is set to vote on a measure that would approve spending for almost one quarter of Obamacare’s $1 trillion price tag. Sen. Debbie Stabenow (D-MI) has introduced, and Majority Leader Harry Reid (D-NV) is moving to the floor, S. 1776 which, as we explained yesterday, raises Medicare provider reimbursement rates by $247 billion over the next ten years and $3 trillion over the next 75. Under current law, doctors nationwide are set to take a 21.5% pay cut for every Medicare patient they see starting in January 2010. Such a cut could lead many doctors to abandon Medicare patients, thus significantly undermining our entire health care system.

Doctor’s reimbursement rates do need to be fixed. But such a fix should be part of comprehensive reform of our health care system. Instead, Reid and the White House are trying to pull a fast one on the American people, claiming “the Medicare doctors’ payment discrepancy is a budgetary problem” while “health insurance reform tackles a serious regulatory problem.” The Obama administration is trying to add $247 billion in deficit health care spending one week, and then turn around and claim their health care plan is deficit neutral the next. The trickery has come in for some heavy bi-partisan criticism. Sen. Kent Conrad (D-N.D.) said he thought the tactic is a “mistake”, and Sen. Evan Bayh (D-IN) told Politico: “I am for the fix, but I don’t think we should blow the roof off the deficit — not at a time when we are already running record deficits.”

Robert Bixby, Director of the nonpartisan, grassroots Concord Coalition clearly articulates why the Medicare reimbursement fix should be considered part of health care reform:

Dealing with the ‘doc fix’ in a separate bill, outside of health care reform, would change the scoring of the bills but not the effect on the deficit. If policymakers believe that the current SGR [Sustainable Growth Rate] formula is unrealistic, they should replace it with a more appropriate policy and pay for the change in keeping with their pledge to reform health care in a deficit-neutral way. If paying for this SGR change means there would be fewer offsets on the table to pay for expanded coverage, then policymakers would be forced to appropriately weigh their priorities and make the necessary tough choices — either scale back other costs in the health reform package or find more ways to pay for the larger bill.

The Tea Party movement that swept the nation this summer is already making life difficult for politicians that say they care about deficit spending but then support policies that undermine that goal. The Boston Tea Party of 1773 set the stage for the Declaration of Independence in 1776. Will the debate over S.1776 set the stage for something much larger and important?

Quick Hits:

• Not wanting to admit their $787 billion stimulus failed, the Obama administration is planning a “Stealth Stimulus” expected to cost another $100 billion.
• According to a new Politico poll, 62% of Americans agreed that “economic growth should be given priority, even if the environment suffers to some extent.”
• Just two weeks after agreeing to send its nuclear fuel to Russia and France for enrichment, Iran is already threatening to back away from the agreement.
• The Senate Finance Committee finally produced the legislative text of their health care bill yesterday, all 1,502 pages of it.
• The Canadian dollar is now almost at parity with its U.S. counterpart.