Martin Feldstein outlines some elements of a plan that are quite a bit more sensible than sending us oldsters to the glue factory, which is Obama’s apparent strategy. WSJ:

rationing health care is central to President Barack Obama’s health plan. The Obama strategy is to reduce health costs by rationing the services that we and future generations of patients will receive. The White House Council of Economic Advisers issued a report in June explaining the Obama administration’s goal of reducing projected health spending by 30% over the next two decades. That reduction would be achieved by eliminating “high cost, low-value treatments,” by “implementing a set of performance measures that all providers would adopt,” and by “directly targeting individual providers…(and other) high-end outliers.”

The president has emphasized the importance of limiting services to “health care that works.” To identify such care, he provided more than $1 billion in the fiscal stimulus package to jump-start Comparative Effectiveness Research (CER) and to finance a federal CER advisory council to implement that idea. That could morph over time into a cost-control mechanism of the sort proposed by former Sen. Tom Daschle, Mr. Obama’s original choice for White House health czar. Comparative effectiveness could become the vehicle for deciding whether each method of treatment provides enough of an improvement in health care to justify its cost.

In the British national health service, a government agency approves only those expensive treatments that add at least one Quality Adjusted Life Year (QALY) per £30,000 (about $49,685) of additional health-care spending. If a treatment costs more per QALY, the health service will not pay for it. The existence of such a program in the United States would not only deny lifesaving care but would also cast a pall over medical researchers who would fear that government experts might reject their discoveries as “too expensive.”…

health-economics experts agree that private health spending is too high because our tax rules lead to the wrong kind of insurance. Under existing law, employer payments for health insurance are deductible by the employer but are not included in the taxable income of the employee. While an extra $100 paid to someone who earns $45,000 a year will provide only about $60 of after-tax spendable cash, the employer could instead use that $100 to pay $100 of health-insurance premiums for that same individual. It is therefore not surprising that employers and employees have opted for very generous health insurance with very low copayment rates.

Since a typical 20% copayment rate means that an extra dollar of health services costs the patient only 20 cents at the time of care, patients and their doctors opt for excessive tests and other inappropriately expensive forms of care. The evidence on health-care demand implies that the current tax rules raise private health-care spending by as much as 35%. The best solution to this problem of private overconsumption of health services would be to eliminate the tax rule that is causing the excessive insurance

Feldstein’s approach seems simple and understandable — perhaps even effective! By contrast, the combination of zeal and dishonesty with which Obama has been selling his destructive healthcare program really gives us the creeps. We understand that politicians crave power, but the lack of normal human empathy that lies at the core of Obamacare is profoundly troubling.

This entry was posted on Thursday, August 20th, 2009 at 10:39 am and is filed under Democrats, General, Republicans, business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.