The Less You Change, The More It Costs

June 18, 2009 by Nathan Cortez · 3 Comments
Filed under: Global Health Care, Health Reform, Nathan Cortez, Private Insurance, Public Plan 
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Nathan Cortez, Southern Methodist University Dedman School of Law

Today, on his Washington Post blog, Ezra Klein described how the estimated price tag of health reform is giving Congress sticker shock, and how Congress seems to be responding with less reform, not more. However, as widely-respected Princeton health economist Uwe Reinhardt explains, the status quo of our current system is too expensive to maintain. Thus, Klein notes perceptively that, “In health care, the less you change, the more it costs.”

With Congressional Budget Office estimates sinking in, Congress might be drifting towards compromises that could scale back proposed government involvement in offering health insurance. But as Tim Jost explained in a previous post, public plan alternatives like cooperatives probably won’t solve our problems without concerted and long-lasting support from the federal government anyway. In search of a viable alternative, conservatives have struck a familiar pose, decrying rationing and more government intervention, instead proposing market-based solutions like tax rebates and consumer-directed incentives.

However, conservative proposals would take the United States health care system further out of the mainstream and make us even more of an international outlier (relying primarily, as we do, on private, voluntary health insurance). These proposals don’t seem to hold water at a time when international experience suggests we should be moving in the opposite direction. As Timothy Noah explains (and as Tim Jost has argued persuasively elsewhere), American exceptionalism isn’t necessarily a good thing in health care. We spend nearly twice as much per capita as any other country, and we account for roughly half of all worldwide health care spending each year (roughly $2 trillion out of $4 trillion). Meanwhile, we leave around 47 million people uninsured, and another 25 million don’t have adequate insurance. Finally, we don’t rank particularly well compared to our peer countries on many quality measures. If we don’t start seriously revamping the way we provide and pay for health care, we’ll continue our dubious exceptionalism.

So as we deal with sticker shock, let’s remind ourselves where we stand in the health care world. Taiwan, given the chance, avoided our model like the plague. As one observer notes, “Taking lessons in health care policy from the United States is like receiving lessons in seamanship from the crew of the Titanic.” Why should we accept going down with the ship?

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  1. AMA About Face on Public Plan? : HEALTH REFORM WATCH says:
    07/04/2009 at 9:41 am

    [...] between proclamations besides the ascendancy of Dr. Rohack? New research? A close reading of Profs Cortez, Greaney, Jost, Jacobi and Pasquale? I think not. Although reluctant to criticize for a reasoned [...]

  2. Soda & Diabetes, How Much Does That Can of Soda Really Cost? II : HEALTH REFORM WATCH says:
    07/31/2009 at 8:50 am

    [...] in the name of so called savings (excellent post by Prof. Nathan Cortez: “The Less You Change, the More it Costs“), it would behoove us to begin to back measures to fund what we need: thorough reform, [...]

  3. Last Year’s Health Care Bill Equaled $2.4 Trillion : HEALTH REFORM WATCH says:
    08/13/2009 at 3:18 am

    [...] It is not surprising that voices which offer simplistic (even if wildly erroneous) explanations have been given an ear. Most people juggling work or children and expenses and dinner don’t have the time to even make sure their phone bill is correct–never mind the time for a wonkish devotion to the intricacies of the pay mechanisms in health care or the subtleties of the HITECH Act. But Healthcare Reform is of the moment–and one of the few things that seemingly all experts  agree on is that the present system is unsustainable. But there is caution to be had even there. As the debate heats up, there are many newcomers to the fray and a recent Kaiser article describes angry seniors (who vote) descending upon town hall meetings demanding to know about the impact reform would have on Medicare and expressing displeasure at the prospect of a health care overhaul. They’re covered. They want to know, beyond anything else, that they will remain so. And I suppose the key point here is to reiterate, as President Obama has recently done, that yes, they will remain covered.  But another point that must be made is that the health care system is very costly and is long-term unsustainable as as presently constituted. It is also worth noting that it has been estimated that a couple retiring this year, covered only by Medicare, will need $240,000 of their own money to pay for health care expenses during the course of their retirement. That’s a second mortgage on a house. And to quote Professor Nathan Cortez again, “The Less You Change the More it Costs.” [...]



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