Memo to the President: Reform Health Care

Transcript

HENRY AARON: For those who hope for health care reform there is an awful lot of good news and reasons for optimism. But there are also reasons for concern and caution because all of the obstacles that have stymied previous efforts to reform our health care system are almost as strong as they were the last time. So I'd like to go through a bit of the good news and the bad news and then explain why I think one needs to be ambitious but cautious.

Start with cost. There have been a variety of estimates of the additional cost of health care to cover everybody in the nation. It's on the order of $100 billion a year. Until about three or four months ago, that number scared people. For reasons I think we all understand, it has less capacity to shock than it did back then. Indeed, the idea of spending additional money now in order to help spur economic growth is perhaps even a plus. So the cost obstacle is dramatically weakened.

A second factor is that as people lose jobs, they lose access to health care and they become fearful. Not just those who lose jobs, but those who fear they might lose jobs. So a dynamic that has occurred in the past may occur all too strongly now as unemployment rates rise. That is a popular concern about securing access to one of the most important services people have. Business leaders increasingly recognize that they cannot control by themselves the growth of health care spending. We have entering the White House a charismatic president, supported by increased majorities, supportive -- in general terms -- of extending health coverage and reforming the system.

So, for all of those reasons, it's really not at all surprising that those who have been waiting a long time to see a bold thrust to reform the health care system are optimistic and want to go for broke. The obstacles, however, to action remain about as strong as they have been in the past when they succeeded in stymieing previous efforts. And for that reason, I think the central issue confronting the incoming administration is how to choose its strategy for making as much progress as possible. The reason this is so important is that there is one outcome that I don't believe either the nation or the administration for political reasons can countenance -- and that is coming away once again empty handed from efforts to reform the health care system.

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