February 15, 2007

Containing health care costs

At the hearing -- or briefing -- today in the Senate on the governor's health care proposal, I thought Sen. Sheila Kuehl asked some interesting questions.

One was whether Schwarzenegger's proposal would be affordable for the working poor. The problem, as she partly acknowledged, is defining affordability. The governor's plan would cost a family making $50,000 a year $250 a month for comprehensive coverage. That's not cheap but seems like it is in the ballpark. A family making more than $50,000 a year would be able to pay less than that if they wanted to but would be getting a catastrophic package that covered primary care and left them responsible for the first $5,000 in costs beyond that, and $10,000 out of pocket for the year.

The other good question she asked was whether Schwarzenegger's plan would constrain costs in the long run. The likely answer to that question is no. As long as we keep aging, as long as we keep inventing and using new technology, overall costs and costs per person are going to keep going up.

Here is a case in point. At a recent conference I saw a presentation on a new, robotic surgery tool for prostate cancer. The surgeon who was doing the presentation said they had found that the robot reduced complications, especially from nerve damage, reduced bleeding, shortened hospital stays, and got men back to work more quickly. But guess what? All of those wonderful things had the effect of dramatically increasing demand for surgery from men who were passing it up before and dealing with their cancer in other ways. And so it's likely that the overall costs are higher now than they were before. Is that a good thing or a bad thing? It depends on whether you are paying for the surgery or getting it, I suppose.

To contain costs over time we will either have to limit access to that kind of care or regulate the salaries of doctors, nurses and hospital executives, or both. That's where most of the costs are. But that's the one thing that nobody really wants to talk about. Not the governor. Not the legislative leaders. Not Kuehl (although she comes closest with her "global budget" for health care, which could be a tool for containing costs or expanding them depending on who is writing the budget).

No one who advocates universal health coverage should fool themselves into thinking that costs are going to stop going up.

Posted by dweintraub on February 15, 2007 1:41 PM