For those who had high hopes for President Obama’s health care reform but are now ready to scream in frustration over the incompetent rollout, here is a consolation prize: Health care costs are rising slower today than at any time in the past 50 years.
Part of this is just Obama’s good luck. The trend kicked off a few years before he took office, so he can hardly take full credit. Several big-name prescription drugs have lost patent protection in the past few years, allowing consumers to switch to generics. That obviously has nothing to do with Obama’s reform.
But the reform has helped in a few ways. It rolled back the overpayments to insurers for Medicare patients enrolled in managed-care programs. It fined hospitals that have high rates of readmission, an indication of poor care, a reform that has already had measurable impact. The reform also authorized a range of pilot programs designed to test nearly every credible theory on cost containment.
So how much of the progress is luck, and how much is a result of Obama’s reform? On that point, economists disagree and partisans on both sides make the predictable points.
Whatever the cause, the trend has accelerated since the reform was signed in 2010. Over the past three years, per capita health costs have risen by just 1.3 percent per year, the lowest stretch since the 1960s. Medicare costs per beneficiary have not increased at all during that period, while Medicaid costs have actually dropped.
This is a huge deal, because America’s health care system is broken in two ways that are closely related. Nearly 50 million people have no coverage at all. They are more likely to go without necessary care and die prematurely of treatable diseases, such as cancer and diabetes. And they are more likely to go bankrupt in the face of enormous medical bills.
Until Republicans present a credible alternative, their bleating will be regarded as political opportunism.
But the high cost of health care is really the root problem. The rising costs have prompted so many employers to drop coverage, dumping millions into government programs such as Medicaid and millions more into the ranks of the uninsured.
Rising health care costs are also the main driver behind the growing national debt. The Congressional Budget Office concluded recently that this trend will cut Medicare and Medicaid costs by roughly 10 percent by 2020 — a savings of $147 billion.
In our view, Obama’s reform is a gawky mousetrap, distorted by the need to make one compromise after another. We would be much better off with a single-payer system similar to Canada’s, financed by a progressive tax increase. Canadians are mostly happy with their system, which covers everyone and costs much less.
But Obamacare is at least an answer. It will provide coverage for the bulk of those who lack insurance. And the latest data suggest it will help to contain costs as well.
Until Republicans like Gov. Chris Christie present a credible alternative, their bleating will be rightly regarded as political opportunism.
· Editorial: http://blog.nj.com/njv_editorial_page/2013/12/amid_obamacares_woes_some_good.html