When President Obama addressed Congress in September on health care, he assured them and the American people that he would not sign a plan that adds one dime to the deficit, neither now nor in the future. This focus on cost is appropriate in the context of a federal deficit of $1.4 trillion and a national debt in excess of $12 trillion. Now, seven months later, the House is considering the Senate bill that proposes spending roughly $1 trillion over the next 10 years in order to save money. In order to get the Congressional Budget Office estimates in a favorable light, numerous budget gimmicks were employed. Rep. Paul Ryan (R-Wis.) estimates that when you strip out these budget gimmicks, the bill would add $460 billion to the deficit over the first 10 years, and in the second 10 years, that deficit would increase by $1.4 trillion. That’s a bit more than a dime.
There are also hidden costs not accounted for in these figures. These figures assume that physician’s payments under Medicare are going to be severely reduced. Many physicians are already dropping Medicare because of low reimbursements (i.e. Mayo Clinic in Arizona), and this is only going to worsen with further cuts. That means that if physician reimbursements were maintained, the costs (deficit) would further increase. Medicare, a program that currently has $38 trillion in unfunded obligations, is also being slashed by $464 billion. Medicaid, currently with $17 trillion in unfunded obligations, will be dramatically expanded. Medicaid reimbursements for physicians and hospitals currently are even lower that Medicare. Medicaid is also the leading budget item on many state budgets, including my home state of Illinois that has a budget deficit this year of in excess of $4 billion. Those deficits will necessarily increase when the Medicaid roles expand. As a consequence, state taxes will dramatically increase. And what about those with private insurance? In Massachusetts, where a plan similar to ObamaCare was instituted in 2006, health insurance premiums are the highest in the country, and state insurance regulators this last week approved premium increases of up to 32 percent. The Senate bill also includes nearly $500 billion in new taxes. This level of taxation will undoubtedly cause many Americans to lose their jobs.
And what would be the cost of the Senate bill with respect to the quality of health care? As a result of the Medicare cuts in this bill, the chief Medicare actuary estimates that 20 percent of Medicare providers will either go out of business or stop seeing Medicare patients, leaving an increasing number of Medicare recipients with fewer physicians to care for them. Given decreasing reimbursements, the length and cost of training, and malpractice costs, what will be the incentive for the brightest and the best to go into medicine? The quality of medical school applicants will decrease. Taxes on new medical devices are a disincentive for research and development of new medical innovations. All of these will have a negative long-term impact on the quality of care in the United States.
As a nation, we are at a proverbial crossroads. The road to the left takes us to a government takeover of health care, with the addition of the largest entitlement of all, at a time when we are unable to pay for the entitlements we already have. This expansion of entitlements will bankrupt the country, will be detrimental to the quality and availability of health care, and will centralize control of our health care system in Washington bureaucracies. The road to the right takes us back to square one with health care reform, allowing a bipartisan, targeted approach to the problems we all recognize. This approach would be more consumer-driven, effectively making health care more like the rest of the economy. This would include making individuals owners of their health insurance by giving the same tax incentives to individuals as employers, encouraging health savings accounts, eliminating restrictions on interstate sales of health insurance, establishing state-wide high-risk pools for patients with pre-existing conditions, and tort reform. These reforms would make patients better consumers, make health insurance affordable to many more people, and eliminate obvious sources of waste, such as frivolous lawsuits.
No matter how many times it is said, it is hard to take someone seriously when he states that the proposed health care reform will not increase the deficit. The American people aren’t buying it either, as evidenced by a recent Rasmussen poll which found that 81 percent of voters believe that health care reform will increase the deficit. Rep. Joe Wilson’s (R-S.C.) protocol-breaking outburst during Obama’s address to Congress last year was correct.
Dr. Neerhof, an associate professor of Obstetrics and Gynecology at the University of Chicago Pritzker School of Medicine, is an Executive Board member of Docs for Patient Care, the nation’s largest group of physicians dedicated to maintaining the doctor-patient relationship.