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Archive for November, 2007

Health Care Reform Safety Valves

Posted by Alan on November 30, 2007

The Health Access blog has an interesting post today (November 30th) concerning whether there should be an “affordability standard” in whatever comprehensive health care reform package California’s lawmakers might enact. Written by the organization’s Executive Director, Anthony Wright, the post takes Governor Arnold Schwarzenegger to task for refusing to accept, at least in public, an affordability exemption to the mandate that all residents have health care coverage.

What the post highlights is the need for safety valves in several areas of the reform package being discussed. Like most complicated bills, there’s an internal logic to the proposals put forth by the Governor and the Democratic Leadership. In the confines of their proposals, everything fits together snugly. An underlying assumption concerning Tab A assures it will fit snugly into Slot B.

External logic, what we all know as the real world, tends to make any assumptions somewhat iffy (to use the technical term). So while there’s a logic to requiring all residents to have coverage (Tab A) and offering subsidies to assure affordability (Slot B), the reality is, at the end of the day, the cost of coverage may still be out of reach for some Californians. In this context, a well fashioned affordability exemption is a reasonable safety valve.

Similarly, a mandate on carriers to sell individual policies to all applicants, regardless of their health (Tab A), makes sense if there’s an enforceable requirement that everyone gets covered before they head for the hospital (Slot B). But if enforcement fails, Californians will wind up with a system much like New York’s, where the average individual health plan costs twice as much as it does here. That’s why the California Association of Health Underwriters’ health care plan, Healthy Solutions, includes a safety valve in connection with the mandate to sell. Until a specified percentage of Californians are in compliance with the mandate, the state’s high risk pool should be the insurer of last resort, not commercial carriers.

The mandate to sell, the requirement to buy, and an affordability exemption are all critical parts of achieving comprehensive reform. And they are all interconnected. As a result, they must be balanced. 

I’ve written several times concerning my belief that the affordability standard in Assembly Bill X1-1 (Nunez), the one Health Access is willing to support, is too broad. By using both premium and out-of-pocket costs in calculating what’s affordable, the legislation undermines the requirement to have coverage and that will drive health insurance costs out of sight. A more appropriate standard would be to consider only the cost of coverage, not the deductibles and co-insurance. After all, without any coverage, an individual risks unlimited out-of-pocket expenses; with coverage those costs are limited.

The Health Access post misreads my position, citing it as criticism of the concept of an affordability standard. They’re wrong. A disagreement over what the standard should be is far different than whether there should be a standard at all.

 In conversations and email, Mr. Wright and I recognize we’re going to differ on a lot of health care reform specifics. However, I’m in full agreement with the final paragraph of his post, “There is a conversation to be had about what is affordable, with regards to premiums, out-of-pocket costs, and benefits, but it’s amazing to me that we are still talking about whether an affordability standard should even exist in the first place.”


Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform | Tagged: | 2 Comments »

Another Delay for Health Care Reform in California.

Posted by Alan on November 29, 2007

Things aren’t looking good for comprehensive health care reform in California this year. Assembly Speaker Fabian postponed a floor session to consider health care reform that had been scheduled for December 5th and/or 6th. A spokesperson for the Speaker said negotiations are continuing on a compromise and additional time was needed to “draft language and shop it around.” Whether there will ever be compromise language worth shopping around, however, is a matter of some debate. Conventional wisdom, and the people who spout it, are growing increasingly doubtful Governor Arnold Schwarzenegger, Senate President Pro Tem Don Perata and Speaker Nunez can reach  a compromise this year.

The most significant sign health care reform is in trouble comes from Bill Ainsworth, who in the San Diego Union blog claims the blame game has begun. If so, this is the political equivalent of a B-Western cowboy seeing buzzards circling overhead. The blame game, as played in Capitols everywhere, involves key players spending a couple of news cycles giving others credit for the failure to accomplish something. And with California’s health care reform effort, there’s plenty of “others” to credit: the unions, the Republicans, the carriers, the Democrats, the Chamber of Commerce, the doctors, the Administration, the wildfires, the budget deficit and so on and so forth. If this is the route the principals will be taking, you’ll start hearing about the do-nothing legislature that’s too beholden to the unions and how the Governor sold out to big business and the insurance industry. Then the Legislature will pass their health care reform package, Assembly Bill X1-1 on party line votes and the Governor will veto the bill. Both sides will use these actions as opportunities to offer various innuendos, insults and accusations.

That’s the low road, but there’s another option available to the Governor, Speaker and Senator. Instead of savaging one another, they could salvage something meaningful from the wreckage. In this scenario, they enact several “small” reforms that lay the foundation for future, more comprehensive reforms while also fixing some present problems. I’ve already written about what three elements of such a package might be: 1) cost containment; 2) increasing MediCal reimbursement; and 3) improving outreach for Healthy Families. (The post even suggests how to fund these efforts). Assemblyman Mervyn Dymally already introduced a bill in the special session concerning the state’s high risk pool that would be a worthy addition to the package.

Whether it’s these or other incremental reforms, there’s reason to be optimistic that the troika will take the high road. They already have a track record of successfully working together. There are a host of other issues they will face next year (think water and budget deficits) that will require compromise and cooperation. Creating ill will over health care reform won’t make those issues any easier. And they all have a political needs a salvage operation would help meet.

They may yet fashion a compromise on health care reform. The conventional wisdom, after all, is rarely actually wise. But if they can’t, let’s hope, at the very least, they find a way to work together on a meaningful Plan B.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform | Tagged: , , , , | Comments Off on Another Delay for Health Care Reform in California.

The Health Care Reform Environment in California: Turning Toxic?

Posted by Alan on November 28, 2007

For a long time I’ve predicted Governor Arnold Schwarzenegger, Assembly Speaker Fabian Nunez and Senate President Pro Temp Don Perata would find their way to a compromise on comprehensive health care reform. The tremendous political benefits of a deal for the trio, I figured, would guide them to common ground. After all, the Speaker and the Senator need to demonstrate the legislature can produce results prior to the February vote on modifying California’s term limits law. And the Governor hates to lose, especially on an issue in which he’s so publicly invested.

Now, for two entwined reasons, I’m not so sure. First, any legislative deal needs to have enough buy-in from the constituents of the negotiators’ that they’ll support the November 2008 funding initiative required to make the legislative reforms real. Second, those constituents have all but locked the negotiators into their current positions. The result: a political context in which a handshake is just out-of-reach.

Consider just one of several contention issues: the affordability exemption to the individual mandate. The Legislative Leaders have accepted the Governor’s demand that all residents obtain health care coverage (that’s the “individual mandate” part). However, their legislation, ABX1-1, exempts individuals from this requirement if the cost of coverage and out-of-pocket medical expenses exceeds 6.5 percent of an individual’s income (the “affordability exemption”). The Governor recognizes that this formula undermines the balance he’s tried to achieve between the mandate for carriers to sell coverage and for residents to buy it. From everything I’m hearing he’s refusing to accept the exemption as written. However, the unions and consumer groups that comprise the Democratics base on health care reform have made it extremely clear they will not accept a watering down of what’s on the table.

Of course, Speaker Nunez and Senator Perata could compromise on this issue anyway. But this would make it unlikely Labor and grassroots progressives would support — either politically or financially — the 2008 financing initiative. And their support will be critical not only for passage of the measure, but in qualifying it for the ballot in the first place.

There are several other issues resulting in a similar dynamic. Moving from their current positions means either the Governor risks alienating his support in the business community or the Democrats lose the backing of the unions and consumer groups. Passing the November 2008 health care reform financing measure is going to be a huge challenge in any case given the state’s fiscal woes. If the financing package includes a cigarette tax, the tens of millions of dollars the tobacco industry is likely to against the initiative will only make the task harder. If business and/or labor sit out the campaign, the measure could be doomed. And it’s not like these groups won’t have other important issues deserving of their time, attention and resources on the 2008 ballots.

That’s why I’m no longer optimistic about the chances of California enacting comprehensive health care reform this year. (There’s still an opportunity to pass some meaningful health care bills, as I’ve written about previously).  The political will exists for a deal, but the political environment necessary for a compromise seems to be growing toxic.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform | Tagged: , , , | Comments Off on The Health Care Reform Environment in California: Turning Toxic?

Why a Compromise Matters

Posted by Alan on November 27, 2007

It is true that no health care reform is better than bad reform. And to judge from the eulogies already being written (e.g., “Analysis: No easy Rx for health care’s hurdles,” from the Sacramento Bee and “Cost key issue for health care proposal,” from the Associated Press), it appears the likelihood of comprehensive reforms in California is increasingly unlikely.

For some, this is a relief because aspects of the reform package being negotiated in Sacramento are, well, bad. But no one should rejoice that the year of health care reform seems to be fizzling out. A series of articles on Monday in the Los Angeles Times by reporter Susan Brink shows why.

In one story, a Dana Point family of five goes without coverage because it’s “unaffordable” on their $70,000 annual income. As it turns out, focusing on this family was a questionable choice. As many of the reader comments point out, they apparently consider health care coverage less important than other, perhaps less critical, lifestyle choices. (The article also highlights the need for a good agent. The family claims coverage they’re looking for would cost them in excess of $900 per month, but a professional agent could probably find them acceptable coverage for roughly half that amount). So the story makes two points. The intended point is that there are families just beyond the cusp of qualifying for premium subsidies who are struggling to obtain care. Under either the Governor’s or the Democratic Leadership’s reform proposals, these families would qualify for state help. The inadvertent point is that there are families who make decisions that health care isn’t important to seek out even minimum coverage — until something goes wrong.

Another article in the group describes a single mother whose pay raise results in her child losing eligibility for Healthy Families. It shows the hardships families face when their priorities are in the right place, but nonetheless find themselves struggling to maintain health care coverage. Frighteningly, with re-authorization of the State Children’s Health Insurance Plan (SCHIP) stalled in a bitter dispute between Congress and the White House, even eligible children may be dropped from the program soon.

The point here is not that Governor Arnold Schwarzenegger, Speaker Speaker Fabian Nunez and Senate Pro Tem Don Perata should sign off on any plan just to get something passed. (Although it is clear the Administration and Congress need to resolve their dispute over SCHIP, and quickly). What it does underscore is the importance of getting the reforms right, even if it takes more time. After all, subsidizing premiums for families who struggle to afford coverage now won’t help much if reforms result in their premiums doubling. Yet based on the difference between what New Yorkers and Californians currently pay for health insurance that could very well happen if lawmakers aren’t careful. And it’s a reminder that while politics is closely entwined in the health care reform debate, in the end, it’s about people facing real problems and challenges. Anecdotes are a poor foundation for fashioning legislation, but they do help keep things in perspective.

Posted in Arnold Schwarzenegger, California Health Care Reform, Health Care Reform, Healthcare Reform | Tagged: , , , | 1 Comment »

Upcoming Medicaid Cuts: A Single Payer Warning

Posted by Alan on November 26, 2007

If the debacle over funding for the State Children’s Health Insurance Plan (SCHIP) wasn’t enough, here’s another reminder why ceding control of health care decisions to the government can be hazardous to your health — especially if you’re not powerful or well connected. Washington is cutting yet more Medicaid funding and, as a result, services to California’s most vulnerable residents are at risk.

The Sacramento Bee reports at least $15 billion in Medicaid funding is being cut by the feds, $4 billion of that from Targeted Case Management programs. According to the article, written by Aurelio Rojas, Targeted Case Management programs are used by counties to serve “pregnant women and infants, the elderly who cannot care for themselves, the mentally disabled, foster children and adult probationers who receive substance abuse treatment.”

The federal dollars are used to match expenditures by state and county governments. Because of the nature of the programs, it’s not yet possible to project the impact on California’s Medi-Cal program (Medi-Cal is the state’s version of Medicaid). However, the Bee reports state officials as predicting it will be a “substantial amount.”

The cut to Target Case Management programs has been delayed by the current Congress, but that repreive is scheduled to end next year.  Governor Arnold Schwarzenegger has written California’s congressional delegation asking them to help extend the maratorium and to try to reverse the cuts. Whether that will happen is unknown, but there’s certainly no guarantee.

There are no market forces at play here, just the politics of the federal budget. There’s no doubt far more than $15 billion in pork, waste and funding for out-dated programs in that budget, but it’s pregnant women, infants, and the elderly who cannot care for themselves who are taking the hit. Yet single payer advocates want to turn our health care system over to the this government — or its state counterparts. Do they think that every president from now on will be liberal? That Democrats will hold a majority of Congressional seats forever? Or do they labor under the misconception that governments: 1) always do the right things; or 2) at least do fewer wrong things than private (especially for-profit) entities. If so, there’s little evidence this is the case.

Instead here’s yet another example of a government program facing mounting  financial problems that attempts to address the problem by whacking away resources from those who need it most. I doubt advocates of a single payer system would say this is the “right” thing. At least private insurance companies are subject to regulation by state agencies. Bad things happen, but they get addressed. Between market forces and government oversight the system tends to right itself. But when it’s the government itself doing something like what’s happening with Medicaid, it’s just business as usual.

Everyone knows that government programs tend to spiral away from their original purpose toward a state of non-reality enabled by a host of barnacle-like interests. It’s Political Science 101 — just look at the Farm Subsidy program. Does anyone think a government-run health care program will be any different? Would voters hold incumbents accountable at the ballot box? Not likely.

Supporters of the effort to pass Senate Bill 840 (Keuhl), which would eliminate private health insurance companies and put virtually all health care for nearly all residents of the state in the hands of government bureaucrats, often describe their proposal as offering “Medicare for everyone.” Whether that’s a good model or not is for a later post, but what amazes me is that they never seem to consider even the possibility that they’ll be delivering what’s happening to Medicaid today, instead.

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A Prescription for Reducing Health Care Costs

Posted by Alan on November 25, 2007

The drumbeat for addressing the high cost of medical care in the United States is growing louder and more insistent. The New York Times weighed in today with an editorial entitled “The High Cost of Health Care.” Unlike most recent comments on the need to control health care costs (including mine, yesterday) the Times offers a laundry list of ideas for addressing the problem.

Not all the ideas are new or startling.  Kaiser Chairman and CEO George Halverson offers some of the same ideas in his recent book, “Health Care Reform Now!, A Prescription for Change.” And some are already a part of the various health care reform bills bouncing around Sacramento.

Further, the Times recognizes that some of it’s suggestions would take years to implement. This doesn’t mean they shouldn’t be tried, but it does mean the time to start is now. All of which makes the Times piece worthy reading. This is especially true for California lawmakers who, if they unable to come up with a comprehensive health care reform package, would do well to consider enacting a package of widely supported cost containment measures as an alternative to accomplishing nothing.

Posted in California Health Care Reform, Health Care Reform, Healthcare Reform | Tagged: | 1 Comment »

Some Affordability Data

Posted by Alan on November 24, 2007

A few days ago I wrote about Congressional Budget Office Director Peter Orszag’s warning to policy makers concerning the need to focus on health care costs. As California lawmakers struggle to fashion a reform plan that the Legislature can pass, the Governor will sign, and voters will finance, there’s not a lot of talk about cost controls. Yet focusing on this issue is a public policy imperative and a, potentially, a political lifeboat.

Because without somehow constraining skyrocketing medical costs it’s hard to see how universal coverage becomes an affordable reality for the state — or the nation. At the end of the day, access is about affordability. If families can’t afford coverage it doesn’t matter what’s available to them. If the state can’t afford it’s health care programs, all the public proclamations mean nothing. It’s about cost.

Granted, increased access helps lower costs, but only temporarily. Once the benefits of broader coverage is achieved, it’s built into the system. Even the stated goal of single-payer advocates, eliminating the cost of the insurance industry, achieves a one-time benefit. Once carriers, agents and the rest disappear, that’s it. If there’s any savings (a far from certain assumption) once they’re captured that’s it. And medical cost inflation will continue to increase costs to consumers, taxpayers and governments.

The Henry J. Kaiser Family Foundation provides some interesting statistics to show the central role health care costs in the reform debate. The Foundation published Health Care Costs: A Primer back in August which breaks down the impact and the elements of health care costs. For example, that the aging of America increases costs is a part of conventional wisdom. The Kaiser Family primer shows why. Consumers age 25-44 spend on average $2,277 per year on health care, while those 45-64 spend twice as much, $4,647. Americans over 65 spend nearly twice that amount again, $8,647 again (380 percent more than the younger cohort, to be precise). 

Most significant for those who would reinvent the health care system is the reality that the rate of health care cost increases has outpaced the growth rate of the economy as a whole since at least the 1970s. Without exception (not necessarily every year, but every decade). The cumulative effect is substantial: from 1970 through 2005, the nation’s Gross Domestic Product grew by 7.4 percent; nominal national health expenditures grew by 9.8 percent. Perhaps 2.4 percent doesn’t look like much, but over 30 years it means health care costs doubled compared to the economy’s growth. That this trend is unsustainable is indisputable. That there’s no clarion call for change is disappointing.

Then there’s the element in the leading Democratic health care proposal moving through the legislature, Assembly Bill X1-1 (Nunez), concerning requiring all Californians to obtain at least minimum health care coverage. This mandate to buy is critical to making the mandate on carriers to sell coverage work (something I’ve written about several times, including yesterday). ABX1-1, however, exempts from the mandate to buy those for whom health care expenses (premiums and out-of-pocket expenses) exceeds 6.5 percent of their family’s income.

The Kaiser Foundation study seems to indicate that this exemption, as designed, would undermine the mandate. The primer found that 10 percent of Americans households earning 400 percent of the Federal Poverty Level in 2003 spent in excess of 10 percent of their gross income on health care costs. The report doesn’t provide a means of determining what the impact of lowering the threshold to 6.5 percent would be, nor what four years of inflation have done to this data, but it should be setting off alarm bills loud enough to penetrate even the state capitol. At the very least it’s a call for further study.

The primer offers some suggestions as to why health expenses are increasing faster than wages and general inflation. An aging population is the “gimme” in these discussions. The Kaiser Foundation suggests three drivers which are less frequently discussed:

  • Wealthier countries spend more on health care because they can– and the United States is a very wealthy country.
  • Insurance coverage has increased, encouraging more people to incur more health care.
  • Americans pay a lower percent of medical care than they used to, encouraging consumers to use more health care.

This last item is especially interesting. Between 1970 and 2005, the percent of “personal health expenditures paid directly out-of-pocket by consumers fell from about 40 percent to 15 percent.” This is a statistic those who claim the current system is broken — which is virtually everyone in Sacramento — somehow neglects to mention.

Health care reform is a complicated matter. It’s driven by politics as much as public policy, which is why the focus has been on market reforms rather than tackling the much harder task of constraining health care costs. Yet as the CBO and Kaiser Family reports indicate, that’s where the real challenges lies. Unfortunately, neither offers a magic formula to address the issue. But that is just testimony to how tough an problem it will be to resolve. Yet if we fail to find a solution to this core problem, the reforms causing so much pain today, won’t solve much of anything.

Posted in California Health Care Reform, Health Care Reform, Healthcare Reform, Politics | Tagged: , | 1 Comment »

ABX1-1 Exemption: A Road to New York?

Posted by Alan on November 23, 2007

Earlier this month, America’s Health Insurance Plan’s (AHIP) published it’s annual Health Insurance: Overview and Economic Impact in the States. It provides a snapshot of the economic impact health insurance has on state economies along with some interesting statistics. More importantly for those involved in California’s health care reform debate, it offers a warning about the need to get reforms right.

First, some general statistics. The average individual insurance policy in the country costs the average single American $2,613 and the average American family $5,799. Californians hover within two percent of the national average — a little lower for single coverage; a little higher for family policies. Note: the AHIP numbers reported for California strike me as high. The average monthly premium I’ve seen for single individual coverage hovers around $130, substantially below AHIP’s findings. Granted, my data comes mostly from online sales where purchasers tend to skew younger than the general population, and, consequently, pay lower premiums.

When it comes to small group coverage, Californians pay about five percent less than the national average. Nationally, single coverage in this market segment is, on average, $3,732 and family coverage averages $9,768. In California the premiums average $3,552 for singles and $9,768. So, pre-health care reform, California’s premiums are pretty typical. So far, so good.

While comparison to the national average is interesting, what the report clearly indicates is that health care reform, done badly, costs consumers money. Lots of money.

 In New York, for example, where there’s a mandate to sell coverage, but no mandate to buy it, single coverage in the individual market costs $4,734 (85 percent more than in California) and families pay $12,254 (over twice as much). In New Jersey, which has also sacrificed affordability in the name of health care reform, single coverage costs $5,326 (twice as much as Californians pay) and $10,398 (77 percent more).

In California we’re considering a path to higher premiums no less dramatic than our east coast cousins. However, whereas they were explicit about the path they took, in California we’re contemplating a more indirect route to higher premiums. In New York and New Jersey, they consciously chose to create an unbalanced market dynamic, one that encourages folks to wait until they’re in need of health care before buying insurance. This is comparable to allowing drivers to buy auto insurance from the AAA as the tow-truck hauls your car away to the shop).

Assembly Bill X1-1 (Nunez) gets California to a similar result, but with more subtlety. The bill includes both, a mandate to sell and a mandate to buy individual coverage. However, it also includes an exception to the buy-side of the equation which makes the mandate nearly irrelevant. ABX1-1 exempts anyone from the obligation to have coverage when the premiums and out-of-pocket costs (deductibles, etc.) exceed 6.5 percent of a family’s gross income. ABX1-1 mitigates the impact of this exemption slightly by providing subsidies to many low- and moderate-income families, but there’s clearly a segment of the population that will be covered by this provision. The question is, how large is that segment? If it’s too numerous, the result will look a lot like Gotham.

Because ABX1-1 fails to define the minimum coverage residents are expected to have, there’s no way of estimating familys’ out-of-pocket exposure. But let’s be conservative and assume $3,000 for an individual and $6,000 for a family (most discussions assume it will be closer to $5,000 and $10,000).  Using the AHIP’s study average premiums, single Californians earning less than $85,615 would be exempted. Using my $1,800 annual premium estimate sets the exemption at $70,150. Either approach amounts to a lot of single Californians.  The average AHIP average for family premium, means those in households earning $182,830 would have the option of waiting until medical care was needed before obtaining coverage.

Now, these are averages and questionable ones at that. But even so, they serve as warning flags. In crafting an affordability exemption, California lawmakers need to consider what it will do to the balance needed to achieve a healthy insurance system. One solution: limit the exemption to the cost of coverage. After all, someone taking the exemption has unlimited exposure to medical costs; with even catastrophic coverage their exposure is capped. Failure to consider the need for balance will result in what New Yorkers bear: a formidable health care reform surcharge.

New York is a nice place to visit, but I wouldn’t want to buy health insurance there. Neither would a lot of other voters. California lawmakers should take note.

Posted in California Health Care Reform, Health Care Reform, Health Insurance, Healthcare Reform, State Health Care Reform | Tagged: | Comments Off on ABX1-1 Exemption: A Road to New York?

November 26th Assembly Session Postponed

Posted by Alan on November 20, 2007

Assembly Speaker Fabian Nunez announced today the floor session scheduled to consider health care reform would be pushed back from November 26th to the first full week of December. According the the Sacramento Bee’s CapitolAlert, the Assembly will meet on December 5th and 6th to consider special session legislation (which would include a water bill if those negotiations make progress).

In the meantime, negotiations continue on health care reform. As the need for a delay underscores, there are still substantial differences between Governor Arnold Schwarzenegger and the Democratic Legislative Leadership on some major issues. However, neither side is calling it quits yet. Indeed, they’re continuing to meet with stakeholders for input on a host of issues. 

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CBO to Policy Makers: Focus on Health Care Costs

Posted by Alan on November 19, 2007

Most health care reform rhetoric focuses on health insurance premiums and access to coverage. Too often it fails to address the real danger facing us: ever escalating health care costs.

Earlier this month, the Congressional Budget Office published “The Long-Term Outlook for Health Care Spending.” It’s not a pretty picture. While the report acknowledges that the aging of America’s population impacts health care costs, it warns that the impact of this factor has been greatly overstated — at least over the long term. In the next 75 years, the CBO estimates population aging will increase Medicare and Medicaid spending by roughly two percent as a share of the Gross Domestic Process. Of far greater concern to the CBO is unnecessary medical spending. According to a posting on the Health Affairs Blog, CBO director Peter Orszag estimates that 30 percent of health spending is on “wasteful or low-value services.” Considering this country spends around $2 trillion (that’s with a “t’) on health care, that 30 percent is a $600 billion (with a “b”) savings opportunity.

The CBO is pushing for more evidence based assessments of new technologies and the need to expand research on comparative effectiveness. They key, Mr. Orszag indicated, is to provide new incentives in the system aimed at changing provider and consumer behavior.

None of this will be easy. In January, the Center of Budget and Policy Priorities published a report entitled, The Long-Term Fiscal Outlook is Bleak. It identified health care costs as “the single largest contributor to the long-run budget problem ….” It goes on to say, “… the rate of growth in health care costs is driven largely by medical advances that tend to improve health and lengthen lifespans, but that also increase costs. It is inconceivable that Americans will not want to avail themselves of the medical breakthroughs …. The challenge therefore is to pursue major reforms that eliminate inefficiencies in the health care system and restrain costs in the system to the greatest extent possible without unduly constraining medical progress.” Shouldn’t take more than five, OK, six days. And then on the seventh day we can rest.

Constraining health care costs won’t be easy, but avoiding even the attempt to do something will be disastrous. Or as the Health Affairs Blog reports Mr. Orszag of the CBO putting it, “Don’t expect overnight results. But the time to get started is yesterday.”

There’s an easy place to start in California: look at the cost containment provisions of the various bills introduced in Sacramento. Seize the common ground in these proposals and fashioning a compromise of relative modest costs and pass it quickly.

Will the need for medical cost containment work its way into the rhetoric of the health care reform debate? It already has, but only on the edges. The issue needs, however, to take it’s rightful place — the center of it all.

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