Sen. Grassley says costs will increase with health reform

Insuring Resources Commentary:

Yet another opinion, on how the health care reform bills before us do not address the cost issue. This time a Republican Congressman- Sen. Grassley- cites the Congressional Budget Office and the Chief Actuary at the Dept. of Health and Human services who have analyzed the legislation and find that costs will increase.

Grassley was a key Republican in most of the Senate bill formulation talks in the fall but voted against the bill in committee and on the Senate floor because it did not address or attempt to control spiraling health care costs.

The bills do not create incentives for sustainable efficiency in the health care system. we need fundamental health care payment reform that incents efficiency based on quality health outcomes through episode of care based reimbursement. Drs and hospitals need to be paid based on outcomes not per procedure on a fee-for-service basis.

If reform does not address the cost issue the system will deteriorate further and premiums will increase.

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From the New York Times blog: Jan. 14, 2010
by DAVID M. HERSZENHORN


At the crux of the debate over major health care legislation is the question of why health care in America is so expensive – or to be more precise, why the cost of medical care has been growing far faster than the cost of everything else. It is far outpacing regular inflation and threatening to bust not only the federal budget but the finances of individuals and families as well.

Earlier this week the Prescriptions blog asked two experts of differing political perspectives to address two simple questions: Why is health care in American so expensive? And will the legislation emerging in Washington take sufficient steps to control costs? The experts, Joseph R. Antos, health policy researchers at the conservative American Enterprise Institute, and Jacob S. Hacker, a liberal proponent of a government-run insurance plan at Yale University, agreed – though for very different reasons – that the legislation would not do enough to control cost. You can read their responses here.

Next, Senator Max Baucus, Democrat of Montana, chairman of the Finance Committee and a leading architect of the legislation, weighed in with his own view that the bill incorporates virtually every idea put forward in the last 50 years to improve the health care system. Read the Baucus post.

Today, we hear from Mr. Baucus’s counterpart, Senator Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee.

For months, Mr. Grassley was part of a small group of senators working to develop the legislation, but he ended up turning against the bill and opposing it both on the finance panel and on the Senate floor.

Mr. Grassley, who enjoys using Twitter to communicate with his constituents, offered the most succinct answer to the cost question so far.

“High costs come from flawed payment systems and defensive medicine,” Mr. Grassley wrote. “The system contains incentives that many times provide too much care and the wrong care, and there’s too much waste, fraud and abuse.”

Mr. Grassley’s opposition to the Democrats’ health care legislation is well known. Asked to elaborate on the reasons that he feels the bill will increase rather than decrease health care expenses, he offered the following.

A major goal for comprehensive health care reform was to lower spiraling costs, so it’s regrettable and really pretty unbelievable how the $2.5 trillion legislation that’s been passed fails to reduce rising costs. That judgment isn’t mine. It comes from the independent experts.

The nonpartisan Congressional Budget Office said on Dec. 19, “Under the legislation, federal outlays for health care would increase during the 2010-2019 period, as would the federal budgetary commitment to health care. The net increase in that commitment would be about $200 billion over that 10-year period.” The Congressional Budget Office and the Joint Committee on Taxation also estimated, on Nov. 30, that “the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.”

Separately, the chief actuary for the Department of Health and Human Services said on Jan. 8 that under the Senate bill “total national health expenditures . . . would increase by an estimated total of $222 billion during calendar years 2010-2019.” In the same report, the chief actuary anticipated “an increase in overall national health expenditures ranging from $5.8 billion in 2011 to $13.8 billion in 2019.” The actuary said the Senate bill also would bend the spending growth curve upward for federal spending on health care, increasing it by $279 billion from 2010-2019.

These facts back up the majority opinion at the grassroots that health care bills passed by the House and Senate would make things worse, not better. Instead of sending this legislation to the president’s desk, Congress should work on the fundamental problems in the health care system and pass common sense medical malpractice reform to stop wasting so much money on defensive medicine, end pre-existing condition exclusions and waiting periods, start paying for value rather than volume, and empower consumers to shop around for health care and lower costs with competition, just like with other services we buy. Congress should make market reforms that help small businesses and the self-employed access health insurance.