Explaining health care

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There are a lot of issues being considered in the current health care policy, according to Douglas Holtz-Eakin.

He explained the complexities of current health care policy to a group of about 30 students in Kathleen Cooper’s Politics of Economic Policy class Feb. 18.

Holtz-Eakin served as the Chief Economist of the President’s Council of Economic Advisors from 2001-2002, and later as director of the Congressional Budget Office from 2003-2005 during the George W. Bush Administration. He also worked as the Director of Domestic and Economic Policy for Sen. John McCain’s 2008 presidential campaign. In 2009, he was appointed to the Financial Crisis Inquiry Commission. The FCIC is investigating the roots of the current financial crisis that began in 2007.

Holtz-Eakin broke down health care policy into four areas: issues, policy, strategy and politics. Issues, he said, were the most important to look at when analyzing policy. He separated two issues of the policy debate: practicing medicine and paying for it.

Although health care spending has increased per person in the United States, Holtz-Eakin sees “some real shortcomings” in the current system.

He noted that life expectancy has not risen, and that although there is “dramatically different spending” between various areas, results show the same outcomes.

Holtz-Eakin described these shortcomings as “dual indictments of the current system.”
“We want to have a high quality system that delivers,” he said.

Holt-Eakin identified another set of problems with health insurance: the number of uninsured people and, problems with non-portable insurance.

When looking at health care policy, Holtz-Eakin explained that a person must diagnose the problem: “Is this a question of the way we practice medicine? Or is this the way we pay for it?”

Health care policy is built around these questions, according to Holtz-Eakin. Some policies focus on reducing health care costs, while others try to reform health insurance.
Current health care policy debates in Congress focus on reforming health insurance and getting everyone insured.

Holtz-Eakin explained that both issues need to be resolved. Some costly medical procedures could be deemed unnecessary by cheaper, and equally effective, measures. Current health insurance is not equipped to handle chronic diseases, which make up 70 percent of costs.

He argued that the insurance-first method would lower some costs, but it would also alienate doctors and hospitals, telling them that “we’re going to make you cover, take care of a lot of a lot more people, and then we’re going to tell you how to do your business.”

However, he noted, the other side of the debate would point to Massachusetts, who enacted health care legislation in 2006, saying his concerns didn’t happen there.
From his perspective, policy should focus first on reducing health care costs.

“I am a delivery system first kind of guy,” he said. “Form the delivery system so that we deliver the same care for a lower cost or better care for the same cost—that’s all possible—take the savings that accrue and funnel them into greater insurance coverage. I favor it because it’s automatically fiscally responsible.”

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