Strategic Review: Real Health Care Reform in 2009

November 17, 2008


Despite other urgent national priorities, health care reform will receive major attention next year. While the economic downturn has replaced health care reform as the top domestic priority, it has also raised public concerns about the affordability and security of health care and health care coverage. The president-elect has promised major reforms, and health care is also a top issue for many congressional leaders, who are already hard at work on proposals for 2009. A broad range of stakeholder groups, including those representing consumers, employers, health plans, and providers, are all taking more steps to support reform this time around. Consequently, this topic should be one of the top issues for transition planning for the president- elect.

Although there is a strong foundation for health care reform, the challenges and obstacles have never been greater. Simply put, there is little additional federal funding available to expand coverage and reduce out-of-pocket costs in our current health care delivery system. This is not the result of the recent crisis in financial markets and the expanding resources required from the federal government to address it. The economy will recover. In contrast, as a result of existing health care financing commitments, the nation’s fiscal outlook – and consequently its ability to sustain new health care spending – will continue to deteriorate.

Consequently, health care reform efforts will be both technically and politically difficult. Reforms may come through some combination of redirecting federal health care funding, now and in the future, and promoting changes in the way that health care is provided to reduce costs and get more value for the dollars spent. These reforms must also gain broad support in a political environment where most Americans are satisfied with many aspects of the care they receive, and are understandably wary of big changes that could impact how and where they get their care.

Against this backdrop, most experts believe that major reform efforts will fail and that Congress will enact at most minor reforms next year. Instead, they expect to see the typical “incremental reform” approach – expand health care programs a little by squeezing health care payments or access elsewhere. But this approach is becoming more difficult to finance, and it is increasingly clear that it does not improve the way that care is delivered. On the contrary, it is contributing to a vicious cycle of rising avoidable costs, reductions in prices, and gaps in quality.

From the standpoint of presidential and congressional leadership heading into 2009, one thing is clear: Now is the time for action on a different vision for health care reform. Instead of promising unaffordable steps to expand access to coverage that in turn become the subject of a divisive debate about the role of government protection versus individual choice, this vision would highlight how providing support for reforming health care delivery can help make coverage and care more affordable for all Americans. This emphasis on truly reforming health care was reflected in both presidential candidates’ health care reform proposals, yet did not receive much attention during the campaign. By bringing a focus on changing how health care works to next year’s health care reform strategy, the new president and Congress may be able to craft a bipartisan path forward that makes real progress on the nation’s core health care challenges. Doing so will require leadership not only in developing policy ideas that can save money and improve care, but also in redefining the problem and in building bipartisan support for taking action to address it. Given the urgent need for action and the absence of other feasible alternatives, however, the timing is right for true health care reform.