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Improve Health Care Making It Cost More?


Washington.--Health-care costs consume a larger share of gross domestic product in the United States than in any other developed country and are growing faster than the economy.

Rising health-care costs are the major cause of rising deficit projections. High and rising health-care costs inhibit U.S. companies' competitiveness in global markets. Health-care costs are eating an ever larger share of workers' take-home pay with every passing year.

But the entire health-care reform debate today seems to center on one question: How much more should we spend?

We are alarmed. Pouring more money into the system, before we bring costs under control, is like pouring kerosene on a fire. Do we all want to work and live in nursing homes and hospitals? One out of every seven dollars in our economy already is tied up in health care. At the rate we are going, we won't have any money left for anything else.

Two imperatives drive the health-care reform debate: access and cost. Rising costs exacerbate access problems. Employers cut back on health-care benefits and employ fewer people; healthy young people choose not to buy insurance; government is hard pressed to provide for the medically indigent and the growing numbers of the uninsured.

Cost control and universal access are compatible goals. Indeed, effective cost controls may be a necessary precondition to affordable universal access.

Shifting the cost of health care to government would not make it free. Making employers pay more would not make health care free. If the U.S. spends more, individuals and families must pay. We may pay higher taxes. Or we could pass on the bill to future generations, borrow to pay for health care, let our children and grandchildren pay the bill.

Price controls are appealing because the concept reinforces preconceived ideas. Everybody knows doctors, drug companies and hospitals cost too much. Right? Why not pass a law limiting what they can charge? But what kind of limits would you set?

Government cannot limit costs on a per-patient basis. If the law limits cost per test or operation or office visit, there will be a temptation to do more tests and more operations, and to schedule more office visits. Price controls don't work.

Price controls could play the same perverse role in the health-care reform debate that waste, fraud and abuse have played in the budget-deficit debate; a seemingly painless but ultimately ineffective remedy that diverts attention and energy away from the hard choices that will be necessary truly to solve the problem.

We are conducting a study of the economic and budget aspects of health-care reform. The issues are remarkably similar to those we face in the budget-deficit debate. To reduce the deficit, there really are only three choices: cut spending, raise revenues or do both.

Once you get past administrative simplification and electronic billing, there are only two ways to control the growth in health-care costs: We can accept fewer choices or we can pay more for the choices that we make.

Universal health-insurance coverage may be a precondition to long-term cost containment and stability. But we should consider carefully how much access we demand. Calling health care a "societal problem" does not relieve us from the burden of paying for services we consume.

Politicians are tempted to tell us: If we just commit to more spending today, costs will go down tomorrow. Right, and the check is in the mail. Beware of politicians bearing simple solutions. This problem is tough. But it is very important.

The U.S. health-care system is, in many respects, the finest in the world. Anybody who needs high-tech medicine and can afford it comes here. But the system is getting so expensive, soon many of us may not be able to afford it.

We can control costs and finance additional access for those who cannot afford to provide for themselves. Let us reconcile our appetites for health care with what we are willing to pay. Let us preserve high-quality health care so that access is worth what it costs us directly and collectively as a society.

Carol Cox Wait and Susan Tanaka are president and vice-president of the Committee for a Responsible Federal Budget.

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