As the President pushes for health care legislation by August it is becoming increasingly clear that his timetable likely will not be met. And the Democrats continue to struggle with finding ways to pay for the bills that are winding their way through Congress. The House is looking to assess an income tax surcharge on individuals making $280,000 per year and on couples making over $350,000. That could raise about $544 billion over 10 years, but the House plan would require substantial additional savings through our existing health care system to cover the $1 trillion dollar plus pricetag of their bill. The Senate is stuck on financing, with the House surtax not being in favor. The idea of taxing existing health benefits also has foundered, with conservative Democrats and Republicans tending to support that concept, but the White House and labor opposing. That finance snag in the Senate will likely push back the Presidents timetable.

Nobody said this was going to be easy, but the Democrats have to be mindful that a simple expansion of coverage without real cost containment is doomed to failure. And yesterday’s testimony by Douglas Elmendorf, Director of the Congressional Budget Office, cast the existing health care efforts as just that. From the Washington Post:

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose “the sort of fundamental changes” necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

Though President Obama and Democratic leaders have repeatedly pledged to alter the soaring trajectory — or cost curve — of federal health spending, the proposals so far would not meet that goal, Elmendorf said, noting, “The curve is being raised.” His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation’s bleak budget outlook even worse.

Real cost containment would require a lot of political risk and courage. On that basis it is always the most difficult of tasks. And right now simply expanding the existing system to cover a wider swarth of the uninsured is simply going to crater our nations finances. The existing system is broken, and is going to destroy us in the years to come unless it is fundamentally altered. Simply adding expense to the system will not do.

Speaking of bending the long term cost curve a special commission in Massachusetts has recommended that the state move away from the fee for service model and towards some sort of lump sum payments for health care delivery to patients. I have attached their report at the bottom of this post.

Ezra Klein over at the Washington Post has written a piece today talking about health care reform that centers on Senator Ron Wyden’s Free Choice Act that is worth a read.

President Obama’s speech to the AMA is also attached.

health-care-final_report