Peter Orszag offers a can-do outlook on controlling health care costs.
The bottom line is that health care reform must be deficit neutral in the short run and deficit reducing in the long term. We have to have scoreable savings in the short term to finance additional benefits or coverage. But we must do more than that. We have to move aggressively to change the rules of the game so that we slow the growth in long term costs. Many of these things may not have substantial short-term savings, but over the long term will contribute to more efficient arrangements in the health sector.
I think he makes it sound way too easy to control health care spending. Let me give a semi-anecdote.
My oldest daughter is in her mid-twenties. She has a friend the same age who was stricken with cancer last year. She was treated with chemotherapy, Initially, the doctors thought this had worked, but now the cancer is back. My guess is that her prospects at this point are rather frightening.
That ends the anecdote. What follows is my imagination.
Imagine it were my daughter. What would be my attitude? I imagine that I would be walking into the oncologist saying, "Look. There has to be something you can try. I don't know whether it's bone marrow transplants or stem cells or some clinical trial somewhere. But we can't just sit here and watch her die. Either you give us something that has a chance of working, or we'll find another oncologist who will."
Next, imagine that the best hope is a treatment that costs $100,000 and offers a chance of success of 1 in 200. Would I want her to get that treatment? Absolutely.
But look at the issue from a rational, bureaucratic perspective. You have to treat 200 patients at a cost of $100,000 each in order to save one life, for a cost per life saved of $20 million. Is that what a rational bureaucracy would do?
A rational bureaucracy would not even tell the family about this treatment option. But I think that in the American culture regarding medicine, I would find out about it.
This semi-anecdote says nothing about free-market medicine vs. government health care. In my mind, free-market medicine is more likely to result in the treatment being attempted, but that is not necessarily an argument for or against free-market medicine.
My point is that I would be a lot less "can-do" than Peter Orszag in promising to rein in health care spending. I think that our cultural attitudes about medical services are such that attempts to bring rational cost-effectiveness to the system may not be so easy to implement.