In dogmatically attacking health reform, Republicans have been exploiting the concern that increasing health care coverage must obviously cost us too much. That is not true, and we need to talk about it.
Conservatives who shut down the government two weeks ago claim to be defending against the cost excesses of Obamacare, but they're neglecting to address the vast inefficiency in the current system that is in such desperate need of reform. Even if their professed concerns about the budget are to be taken as the actual cause of the debt-limit showdown, the central fallacy here is to simply accept the bloated, wasteful current national health care budget as necessary and figure that it must be increased correspondingly to pay for those Americans who obtain coverage under the law. That logic rests on the uninformed assumption that the U.S. must continue to pay twice as much for health care (for many fewer citizens covered) as any other developed country. That presumption is false.
Actually, estimating the possible savings is the easy part, compared with overcoming the frantic conservative resistance. Here are the facts: U.S. health care costs a little over $2.5 trillion annually. But not all of those expenditures are needed, nor do they all improve outcomes. Considering the entirety of health spending — premiums, deductions, copays, taxes and tax breaks for some that increase everyone's taxes — we could save over $700 billion per year without hurting health outcomes, according to the Institute of Medicine. A study by Dr. Gerald Friedman of University of Massachusetts at Amherst puts the potential savings at $592 billion annually. These studies take different starting points, but many other analyses bear these figures out and often add to those calculated potential savings.
One of the largest items of excess cost is overutilization of tests and treatments. Although overuse is complicated and details are disputed, it seems clear that attention to appropriateness of care would save at least $500 billion, possibly much more. Private insurance administration plus the defensive requirements placed on doctors and hospitals in response to insurance refusals cost us at least $250 billion too much. And the tax break on insurance as an employer benefit is the biggest loss to the U.S. Treasury, thus raising taxes for everyone by $150 billion. There are several other big items that would add up to major future savings. I can tell you as a doctor that these calculations are, if anything, a cautious underestimate. We might not be able to cut our annual health care budget in half, as suggested by international figures, but supporting and improving the ACA can safely achieve a major proportion of those savings.
Help with figuring out how to do this comes from an unexpected direction. All of these savings would improve quality of care. Overutilization is dangerous, involving risk of misdiagnosis and unnecessary complications. Insurance companies' resistance to paying for needed care threatens patients' health. And although employees might like health care as a benefit, it tends to lower their salaries, results in coverage dictated by their employers, and restricts their ability to move to a new job for fear of losing insurance. Put that way, people will prefer straightforward, unrestricted coverage.
Who's against health care reform savings? Tapping into thoughtless anti-government sentiment, the health care businesses and other supporters of the wealthy minority are funding defamatory advertisements and holding Republican members of Congress hostage to threats of lost campaign donations. The American people have become too accustomed to our highly commoditized health care. But rabid conservatives are fighting a doomed rear guard action, realizing that Americans will quickly become enthusiastic about the benefits of the ACA.
Moreover, encouraged by this reform, American medicine is rapidly changing from volume billing to value as the model for reimbursement. Specialists and family doctors are forging ways to simultaneously save money and improve quality. Congress will eventually emerge from the wreckage to find creation of this wonderful new health care world well on the way, free of doubts about affordability.
Dr. James Burdick is professor of surgery at Johns Hopkins University School of Medicine. He had a career as a transplant surgeon and served in the Department of Health and Human Services as director of the Division of Transplantation. He is writing a book detailing his doctors' plan for health reform. His email is email@example.com.