Monday, February 22, 2010

So, President Obama is finally getting around to listening to Republican ideas on health care reform. That’s a good thing. But in preparing for Mr. Obama’s health care summit, Republicans should keep in mind that this isn’t an “It’s Academic” session in which the smartest one with all the facts and figures wins.

Rather, the politician who simultaneously appeals to Americans’ wants and needs in the emotionally charged arenas of health care and fiscal reform wins.

Mr. Obama has only the health care wants and needs part right - he doesn’t know how to deliver without breaking the bank. That’s because he eschewed the bitter medicine of radically restructuring America’s health care system by getting the incentives right.

Medical science and technology have progressed far ahead of our ability to pay, but the only real incentive the system provides consumers is, precisely, to consume care, as opposed to staying healthy in the first place. Our health care system is far too illness-based and not enough wellness-based - a paradigm in which Big Government has played a big role.

If everyone were entitled to all the care he or she wanted and/or needed - keeping in mind that wants and needs are often indistinguishable - the tab would be untenable. The odd thing is, government started on this trajectory because, not surprisingly, it was politically popular. Then it slammed headlong into the desire/funding gap inherent in big entitlements - most notably Medicare and Medicaid. Starting in the 1980s, government devised various convoluted ways around the problem, e.g., the Resource-Based Relative Value Scale, which assigns medical services a monetary value based on time and skill needed to perform them, not on outcomes. But all these efforts failed to target the source of exploding costs, resulting in the cost-shifting that’s responsible for today’s skyrocketing health care tab for the population at large. Now, instead of consumers bearing the brunt of the cost shift, Democrats want taxpayers to do so.

Voters figured out that’s one and the same thing and sent Democrats a message in November, when Republican governors were elected in Virginia and New Jersey, replacing Democrats, and in January, when Scott Brown was elected to fill the Massachusetts Senate seat of the late Sen. Edward M. Kennedy, for whom health care access was his life’s work.

Now what do we do?

While Republicans - and voters - figured out that Democrats weren’t willing to tackle structural reform because Mr. Obama only focused on getting the incentives right for special interests, voters do want skyrocketing health care costs curbed.

The problem is, they don’t want politicians to touch sacrosanct entitlements. Absent any creativity, all we have seemingly is cost-shifting to wealthy individual and corporate taxpayers to make health insurance affordable for everyone.

Republicans, however, have devised a creative way around this vexing dilemma that would simultaneously decelerate the fiscal deficits and health care costs while improving care. It’s contained in the Patients’ Choice Act, co-sponsored by Republican Sens. Tom Coburn of Oklahoma and Richard M. Burr of North Carolina and Republican Reps. Paul D. Ryan of Wisconsin and Devin Nunes of California. Specifically, their Medicaid transformation would save the states and federal government $1 trillion and $300 million, respectively while gutting the current third-rate system in favor of one that delivers first-class, stigma-free care and develops a template for outcomes-based care that essentially would serve as a laboratory to provide the health care system at large the keys to successful structural reform by which to bend down that vaunted cost curve.

So, when Republicans meet with President Obama on Thursday, they would be wise not to try to score “It’s Academic” points but to keep their eyes on the big strategic prize - Medicaid transformation.

This time, with cameras rolling, Americans will realize how strategically smart and genuinely compassionate Republicans really are.

Mary Claire Kendall served as an special assistant at the Department of Health and Human Services from 1989 to 1993.

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