The Barack and Uwe Show

Presidential hopeful Barack Obama, the Senator from the great state of Illinois, made headlines today when he told the annual Families USA health care conference that we will have universal health insurance by the end of the first term of the next president. No clues as to his plan, though, which he promised "in a couple of months."

More interesting to me were the comments of Princeton University's Uwe Reinhardt, the doyen of health care economists, who followed Obama to the platform. The good professor kept the crowd of several hundred activists thoroughly entertained as he walked them through the absurdities of the Bush proposal, the inequities of the current insurance system, and the misplaced incentives of current health care tax policies.

For years, Reinhardt has been a leading voice for reining in the out-of-control health care costs by demanding accountability from providers of drugs, devices and diagnostic tests. He's also been a vociferous critic of the high prices in the U.S. system. In my book, I gladly credited him with coming up with the proposal, one of my key recommendations, that the government conduct comparative clinical trials so that it could scientifically justify decisions to eliminate pricey me-too drugs from government formularies (should it ever have the political will to establish them).

But I was struck this morning by how he seems to have thrown in the towel on cost-control. He's obviously still aware of the overpricing and overutilization imposed by providers. "What we call expenditures, they call revenues," he said. Yet he called for spending $100 billion a year to cover the uninsured, "half of what we spend a year in Iraq." The line drew thunderous applause from the crowd.

I also was surprised by his sanguine attitude toward the implications of throwing in the towel, which are that health care costs will double over the next decade (from $2 trillion to $4 trillion, making it 20 percent of GDP compared to 16 percent today). He compared that to the slower but still steady growth of the overall economy, which will grow from $12 trillion to $20 trillion over the same period. So while health care costs would grow by $2 trillion, the rest of the economy, though growing slower in relative terms, would still grow by $6 trillion. "I don't lose sleep over young people paying for Medicare," he said. "They can still pay for Medicare and have their Ferraris."

His preferred method for raising the money needed to pay for the uninsured: "Tax the upper third to pay for it."

Last week, Families USA, the preeminent lobby in Washington for uninsured poor families, joined forces with the insurance industry, the hospital association and other business groups to call for universal health insurance without spelling out a specific plan. Reinhardt applauded this new coalition. It's clear that there is an inside-the-Beltway consensus emerging that "we can get this done as long as we don't step on anyone's toes" and long-time fighters for health care reform like Reinhardt have joined in the chorus singing kumbaya.

So, all it will take to get universal health insurance is to keep Harry and Louise off the air by pouring a little more taxpayers' money into providers' coffers (and keep the insurers in the game). Sounds like the Medicare drug bill to me.

Posted by gooznews at January 25, 2007 11:14 PM