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The New Republic: Affordability

The final subject covered at the New Republic conference was how we define affordability of health care, both for the individual and as an industry in society. Several good points here. Harold Pollack of the University of Chicago cites how as a nation we actually underconsume per capita in areas such as prescription volume and average hospital days. The difference is we pay significantly more for services, where George Halvorsol of Kaiser states that we spend up to triple the dollars for the same MRI scan in countries like Japan. He also gave an example of effective ‘budgeting’ in order to improve system-wide affordability using the Tufts Health Plan, which forces providers and consumers to distribute limited resources.

Senator Wyden proposes eliminating mechanisms like the employer health insurance tax exclusion as a way to improve affordability for individuals, referencing last year’s Wyden-Bennet health reform bill that removes employer sponsored insurance, increases wages, and lets individuals choose insurance on the private market with a tax credit. He believes this will not only allow individuals to more effectively purchase affordable insurance, but will also provide additional tax refunds beyond insurance costs by incetivizing purchase of value-based plans. His most profound statement, though, came when commenting on the proposed insurance subsidies in order to make insurance affordable for those under 400% FPL: “I don’t think there are enough subsidies on the planet to bring true affordability because we fail to inflict real cost-containment measures onto the system.”

Senator Weiner thinks the government should “be more like Walmart” by utilizing effective buying power, but he questions why “we are simply going to give substantial government subsidies to health plans [through individuals] for their high-cost administrative activities and profits.” Senator Cooper also cited over $700B in annual waste in the health care system, claiming that capturing just 10-15% of that waste would fully pay for health reform.

(Here is the preliminary CBO score of the House health care bill, which reduces the federal deficit by a more-than-expected $104B over the first ten years and expands coverage to 96% of citizens.)