Bush Faces Hurdles in Health Care Reform

As part of the White House's "Health Week," President Bush Wednesday travels to the headquarters of the fast food chain Wendy's in Dublin, Ohio to push his agenda for health care. That agenda — which includes expanding health savings accounts and slowing spending on Medicare and Medicaid — seems modest compared to the unsuccessful overhaul pursued by his predecessor, Bill Clinton. But that may not make his efforts on the politically sensitive subject any easier.

Having failed last year to get Congress to create private accounts for Social Security, this year President Bush is taking broader aim, including the other major federal entitlement programs — for health care. "Together, Medicare, Medicaid, and Social Security are now growing faster than the economy, faster than the population, and nearly three times the rate of inflation," the President said in a speech last week. "And the retirement of baby boom generation will put even more strains on these programs. By 2030, spending for Medicare, Medicaid, and Social Security alone will be almost 60 percent of the entire federal budget."

But since this is an election year, the President has chosen the safe way out of directly pursuing such an ambitious goal — he wants to appoint a bipartisan commission. "The commission will include members of Congress from both political parties. It will recommend long-term solutions that will keep the promise of these vital programs while addressing their growing costs," he continued.

Yale Public Policy Professor Ted Marmor says commissions like these generally have two purposes. They're either intended to punt a thorny issue off the agenda for a while, or else to hammer out an emerging solution, as the famous 1983 Social Security Commission managed to do. But he says this commission actually has a third purpose in mind — "to frame the conversation in America about entitlements, and to suggest that entitlements represent a kind of slow-moving tsunami, that requires massive reform in order to avoid the flooding that will happen in the absence of it."

In fact, says Marmor, that's not necessarily the case at all. "I think it's sheer and utter nonsense," that major changes are required to put Social Security, Medicare, and Medicaid on a more financially stable path. "When you start using projected troubles in 2042 or 2052 as a reason for action in 2006, you know what, you need medical care," he said.

In the case of health care, Marmor does agree with the president that Medicare and Medicaid are growing more rapidly than the rest of the economy, and consuming a growing share of the nation's output. "But that's not because of the structure of Medicare or the structure of Medicaid; it's because of the forces in American medical care that are not counterveiled by the structure of our public policy," he said.

In other words, what plagues the two big health programs is what plagues the system as a whole. And Marmor says the administration's proposed solution — to make people more responsible for the cost of their own health care — may solve the government's problem, but only by shifting the costs to individuals. "This distinction is absolutely crucial. There's a huge difference to American patients between the cost of medical care to the government and the cost to them. what the government is proposing is restricing the cost to the government and shifting the burden of the cost to them."

Administration officials deny that's their ultimate goal. Because Medicare and Medicaid are so big — accounting for nearly half the nation's health care spending — improvements to them can in turn force improvements to the rest of the system. "Medicare and Medicaid are extraordinarily important players in health care reform," Health and Human Services Secretary Mike Leavitt told reporters earlier this week. "So as we're reforming the 46 percent side of that equation, we're also having an impact on the 54 percent" of the system that's paid for privately, Leavitt said.

In fact, Kaiser Family Foundation President Drew Altman says when you put them all together, the president's plans for Medicare, Medicaid, and health savings accounts do have much in common — they all depend on shifting more responsibility to consumers. "And because it's happening in little pieces and little steps, we're not having a real public discussion and debate about the real underlying principles and values and what it all means, like we did when we had a giant Clinton health reform plan right in front of us that everyone could see and touch and debate," Altman said.

Still, given the outcome of that debate, maybe it's no surprise this administration is pursuing a more understated approach.

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