Reforming Whose Entitlements?

April 14th, 2009 by Phil Mattera

private-healthAside from the dubious continuation of bank-coddling bailout policies, perhaps the most dissonant domestic policy theme expressed by President Obama is “entitlement reform.” He just used the phrase again in a speech on the economy at Georgetown University. In fact, he went so far as to equate it with health care reform.

Surely, the President knows that the concept of entitlement reform has long been used by fiscal conservatives as a euphemism for making substantial benefit reductions in Medicaid, Medicare and Social Security. Time and time again, these “reformers” have used overheated rhetoric and misleading projections to try to steamroll the country into gutting these vital social insurance programs. Their effort in 2005 to privatize Social Security—fronted by George W. Bush—was met with a firestorm of opposition.

It remains unclear whether the Obama Administration plans to travel along the same path or is appropriating the rhetoric about “fiscal responsibility” to serve a more progressive agenda. It is encouraging that the Administration is willing to spend heavily on social programs as part of the Recovery Act plan for addressing the recession. But health care policy is still an open question.

Obama’s effort to unite health care reform and entitlement reform is rooted in the idea that large cost savings are possible in the medical system. In the past, it was assumed that cutting costs went hand in hand with limiting treatment or reducing the income of doctors and hospitals. Obama offers a different paradigm. He wants us to believe that investments in health information technology, such as those contained in the Recovery Act, will bring down costs by raising efficiency.

Computerization of medical records may solve the problems caused by poor penmanship among physicians, but it is hard to see it bringing down costs to any great extent. On the contrary, it has all the makings of an expensive boondoggle benefitting big service providers such as McKesson Corporation.

What President Obama and other Democratic Party leaders seem unwilling to acknowledge is that the most effective way to cut costs is to take the profit out of health coverage. A single-payer or Medicare-for-All system, such as that proposed in Rep. John Conyers’ HR 676 and promoted by groups such as Healthcare-NOW, would save hundreds of billions of dollars by eliminating the vast and oppressive bureaucracy of the private insurers. That would be real entitlement reform.

2 Responses to “Reforming Whose Entitlements?”

  1. C.C. says:

    hmmm…. there are many “entitlements” in the U.S. budget, but the biggest is defense. Moving away from ‘entitlement’ means thinking of the overall budget first – rather than first setting aside the guaranteed $500 billion for defense, it would be set as a percentage. Likewise, a national health care service would see its share of the national budget fluctuate with economic conditions, as would education – and that would encourage more long-term planning in federal and state institutions, which is a good thing. It would also encourage low-cost preventative approaches over expensive medical heroics – liver care beats liver transports, although the latter is a more profitable procedure in the private hospital.

  2. Phil Mattera says:

    I agree with you on the need to challenge military “entitlements” overall — beyond the Obama Administration’s move to redistribute the Pentagon’s budget.

    In the healthcare field, we need to challenge the idea that corporations are entitled to control a big chunk of the system. The conventional wisdom now seems to be that the only way to achieve universal coverage is to force virtually everyone to become customers of the private health insurers, with limited concessions required from those companies. That’s not a true national health system–it’s the use of government power to build the customer base of an industry that should not exist.

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