Alan Greenspan Warns to Congress
Public Intellectuals

Health Care Reform Options

David Wessel on health care:

Capital: Angst about health-care costs drove the attempt by former President Clinton and Hillary Clinton to restructure the system.... Employers grew weary of picking up the tab not only for their own workers but for those without insurance or those covered by Medicaid and Medicare, which pay less than full cost. As they squeezed out inefficiencies, they cut their share of the cost of covering the uninsured. That forced up premiums for smaller employers. The number of uninsured grew and free care became harder to find. The government's costs, from the Medicaid program for the poor to emergency rooms at municipal hospitals, soared.

[A]ngst about health-care costs is back and could be a potent issue in the 2006 or 2008 elections. Now all we need is a workable solution. Two approaches are on the ascendant.

One is to prod Americans to be better health-care shoppers by making them spend more of their own money.... The notion is that people consume more health care than they need because it feels free, and there's something to that... discouraging Americans from unneeded trips to the emergency room is smart; discouraging them from teeth-cleaning, check-ups and blood-pressure monitoring isn't.... The other approach is to prod health-care providers to provide higher-quality care by paying them more for delivering it. Insurers, government and big health-care institutions are trying to devise quality measures -- from monitoring care of diabetics to evaluating surgical success -- as a step toward "paying for performance." Medicare's administrator, physician-economist Mark McClellan, is tweaking incentives in the giant government health-care-insurance program to the same end. This could give Americans more value for their health-care dollars, an unquestionably worthy goal, but whether it saves money is far from clear.... Incremental change appears to be the only practical option, but more than minor tweaks are needed. The cracks in the foundation are widening.