The Kroog Versus Sensible Centrism

Paul Krugman warns the "fiscal conservative Dems" like Ben Nelson and friends that not passing a health care reform bill now will basically ensure that health care costs will spiral out of control until the system breaks.

Some background: Long-term fiscal projections for the United States paint a grim picture. Unless there are major policy changes, expenditure will consistently grow faster than revenue, eventually leading to a debt crisis.

What’s behind these projections? An aging population, which will raise the cost of Social Security, is part of the story. But the main driver of future deficits is the ever-rising cost of Medicare and Medicaid. If health care costs rise in the future as they have in the past, fiscal catastrophe awaits.

You might think, given this picture, that extending coverage to those who would otherwise be uninsured would exacerbate the problem. But you’d be wrong, for two reasons.

First, the uninsured in America are, on average, relatively young and healthy; covering them wouldn’t raise overall health care costs very much.

Second, the proposed health care reform links the expansion of coverage to serious cost-control measures for Medicare. Think of it as a grand bargain: coverage for (almost) everyone, tied to an effort to ensure that health care dollars are well spent.

Are we talking about real savings, or just window dressing? Well, the health care economists I respect are seriously impressed by the cost-control measures in the Senate bill, which include efforts to improve incentives for cost-effective care, the use of medical research to guide doctors toward treatments that actually work, and more. This is “the best effort anyone has made,” says Jonathan Gruber of the Massachusetts Institute of Technology. A letter signed by 23 prominent health care experts — including Mark McClellan, who headed Medicare under the Bush administration — declares that the bill’s cost-control measures “will reduce long-term deficits.”

The fact that we’re seeing the first really serious attempt to control health care costs as part of a bill that tries to cover the uninsured seems to confirm what would-be reformers have been saying for years: The path to cost control runs through universality. We can only tackle out-of-control costs as part of a deal that also provides Americans with the security of guaranteed health care.

And Krugman is right.  If you're a fiscal conservative centrist in the Senate, you have to realize that scuttling this bill will ensure that nothing will be done to improve costs, and that they will in fact crush the entire system quickly.  Republicans could have enacted their plan, instead they all through spending a trillion dollars more on Medicare's prescription drug benefit rather than controlling costs would be a great idea.  After all, Ben Nelson voted for it, as did Susan Collins and Olympia Snowe.  (To his credit, Evan F'ckin Bayh did not, but surprise!  Max Baucus did along with Nelson and nine other Dems.  John Kerry and Joe F'ckin Lieberman famously skipped that vote.)

Still, many of the same folks who have issues with saving on health care costs now had no problem giving away a trillion dollars plus in 2003.  Might want to think about that come 2010, guys.