The Obama Administration’s Options for Health

The Obama Administration’s Options for...

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Unformatted text preview: The Obama Administration’s Options for Health Care Cost Control: Hope Versus Reality Theodore Marmor, PhD; Jonathan Oberlander, PhD; and Joseph White, PhD Controlling the costs of medical care has long been an elusive goal in U.S. health policy. This article examines the options for health care cost control under the Obama administration. The authors argue that the administration’s approach to health reform offers some potential for cost control but also embraces many strategies that are not likely to be successful. Lessons the United States can learn from other countries’ experiences in constraining medical care spending are then explored. Ann Intern Med. 2009;150:485-489. www.annals.org For author affiliations, see end of text. This article was published at www.annals.org on 3 March 2009. T he Obama administration will face no shortage of po- litical obstacles if it boldly pursues comprehensive health reform. Securing a Congressional majority for any large-scale expansion of insurance coverage is a formidable task. Yet, adopting reforms that control costs in American medical care is an even greater challenge. We address the challenges of cost control in 4 parts. First, we describe pressures for cost control and the impact of the current recession. Second, we discuss the political barriers to adopting effective cost controls in the United States. Third, we examine what the Obama team has ad- vanced as cost-control instruments. Finally, we draw on international experience to offer lessons about what does and does not work in controlling medical spending. C OST C ONTROL AND THE R ECESSION We begin by noting the obviously compelling case for cost control. Increasing costs erode our system of employer- sponsored insurance, swell the ranks of the uninsured, re- duce workers’ wages, crowd out spending on other social priorities, and strain federal and state budgets for Medicare and Medicaid (1, 2). The ongoing economic recession exacerbates these problems. Widespread job losses mean that millions of Americans stand to lose health insurance. In this economic climate, employers also face intensified pressures to restrain health care spending and cut back on insurance coverage for those still employed. Meanwhile, rising unemployment levels mean that many more Americans are eligible for Medicaid. States face an acute fiscal dilemma: They must find a way to pay for growing Medicaid enrollment pre- cisely when tax revenues are declining (and balanced-bud- get rules preclude deficit spending in virtually all states). In the short term, the federal government is intent on spending more, not less, money on health care. Congress has already expanded health insurance for low-income chil- dren through reauthorization of the State Children’s Health Insurance Program. It has also adopted additional measures, as part of a broader economic stimulus package, to provide states with more money for Medicaid and to subsidize private health insurance premiums for the newly...
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This note was uploaded on 02/11/2012 for the course BUSINESS 345 taught by Professor Roselli during the Spring '10 term at Berea.

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The Obama Administration’s Options for...

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