Heavy hand on health reform

The main aim of House and Senate health care reform bills is to mandate health insurance for all Americans to assure coverage for the uninsured. The House bill squeaked through to passage on Nov. 7; the Senate bill is expected to face its first procedural test today. Debate has rightly focused on the cost of reforms, but has skirted a more important issue: how to reduce health care costs while maintaining quality. The House and Senate bills fail to address this issue adequately. Many analysts say the proposals will raise health care costs, and there's good reason to think they are right.

For example, the House and Senate bills would require large new subsidies costing over $100 billion a year. The bills pay for these subsidies partly by requiring providers to accept less for their services.

The "cram down" approach has failed to control health costs in the past, has led to shortages in primary care doctors and vaccines, and is responsible for the pending $250 billion "doc fix" required to restore medical payment rates previously capped by Congress.

The true aim of health care reform should be to lower costs and improve quality. Communities around the U.S., seeking a competitive economic advantage, have shown this can be achieved even within the present imperfect system. Success stories reveal many different ways to attain higher quality health care at costs as much as 30 percent below the national average.

Health care reform should encourage, not obstruct, such local innovation.

In contrast, the bills create new mandates for federal health care policy. Those include: Forcing health care providers to accept lower payments discounted for assumed "productivity gains." Forcing providers to adopt changes in medical practices recommended by studies of comparative cost-effectiveness. Forcing drug companies to negotiate drug prices with the Secretary of Health and Human Services.

The House and Senate bills rightly encourage experiments to expand approaches to health care delivery that have saved money and improved quality in some locations. But these modest pilot projects are likely to collide with mandates that reduce incentives for innovation.

An effective way to lower costs and improve quality is to give consumers choices. The health care system, instead, restricts consumer choice through the employer-based insurance system and limits on interstate insurance markets.

Congress should enlarge consumer choice and encourage communities and health care providers to find their own ways to reduce costs and improve care. Congress should set an attainable long range goal, such as reducing the nation's health care costs by 30 percent by the end of the next decade, and monitor progress. But it should not try to get there all at once or through "one size fits all" mandates. Experience shows that many different paths can lead to the goal.

Congress should help the uninsured with pre-existing conditions obtain affordable insurance. All other Americans will be better helped in the long run by reforms that truly bring down health care costs, not by fiat, but by unleashing real competition.