May 27, 2018
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Health Reform, Step One

With the health care crisis facing the country, it is unconscionable that lawmakers are considering stalling a debate on legislation that is a step in addressing the growing problem. The bill presented this week by Senate Majority Leader Harry Reid is far from perfect, but it can’t be improved until discussion begins.

Toward that end, David Walker, the former comptroller of the United States, recently offered a straightforward recipe for the needed reform. His key message is that an overhaul as big as the one needed by the American health care system can’t happen all at once. Trying to fix everything at one time, as we’ve seen with the months-long negotiations in Congress, is doomed to failure. At the same time, lawmakers can’t pass a single bill and think their work is done.

Passing legislation that prevents insurance companies from denying coverage to those with existing medical conditions and expanding coverage to those currently lacking it, for example, is an important step. Subsequent steps should include, among other things, developing ways to reduce medical care costs and reforming Medicare to make it more financially sustainable.

Taken as a whole, such reform work must meet four standards, Mr. Walker told the Institute of Medicine earlier this month.

First, it should pay for itself over 10 years. Second, it should not add to the deficits beyond 10 years. According to an analysis by the Congressional Budget Office of Sen. Reid’s proposal, these tests are met, although the report came with plenty of caveats.

Mr. Walker’s third and fourth standards are harder to meet and will take more time. Third is that reform should significantly reduce the trillions of dollars in unfunded health care promises the government has already made; namely the Medicare obligations that far exceed the money being collected by the program. Fourth, health care costs as a percentage of gross domestic product must be reduced. Health care now accounts for 17 percent of GDP, up from 6.5 percent 40 years ago.

Mr. Walker, who is now the president and CEO of the Peter G. Peterson Foundation, which aims to bring attention to pressing policy issues including the growing federal debt and health care, offered straightforward — but sure to be controversial — ways to reach the last two standards. Changing the current payment system to cap what can be charged for specific treatments, as other countries do, is one avenue. Creating a “health care Fed” to determine what treatments, medications and devices are effective and should be covered is another.

As for existing health care obligations, which currently total more than $38 trillion, Mr. Walker suggests that Medicare charge more to people — like himself — who can afford to pay more. Enabling Medicare and Medicaid to more aggressively negotiate prices, such as for drugs as Veterans Affairs already does, will also help.

These are longer-term challenges that must be addressed soon, but which don’t have to be part of the legislation now before Congress.

“Real reform will clearly have to happen in stages, over time,” Mr. Walker said.

The first stage is to start the debate on the Senate floor.

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