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The Stimulus and Health Care



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The massive amount of spending in the so-called “stimulus” bill is startling, yes–but entirely predictable given the way the bill was set in motion. 

In the weeks after his election, president-elect Obama told the country and the Congress, that economic experts had advised that a large-scale fiscal stimulus was necessary to supplement the financial sector bailouts and the Fed’s efforts to expand the money supply.

This, of course, was music to the ears of the Democratic majority controlling Congress. They enjoy nothing more than solving America’s problems with spending and programs, and Obama had essentially given them license to draft the largest single spending bill in history, with virtually no presidential strings attached. All that was needed was a list of “shovel ready” back to work projects and “downpayments” on energy independence and health care reform. With such vague guidance, the Democrats really couldn’t help themselves. They had to put more money into the programs they favor because they have always argued they are good for the economy and represent “investments,” not spending.

There’s now $20 billion in new discretionary appropriations for HHS in the bill (not counting the HIT funding and Medicaid), and there is no real theme to any of it–other than more, pretty much across the board. $2.1 billion for Head Start. $0.5 billion for the NIH campus. $1.5 for university research facilities. $1.5 billion for NIH research grants. A $3.0 billion wellness fund. And on and on.

Regarding this one-time stimulus, the Obama team should be asked: What will happen in 2010? Will they allow the baseline for HHS funding to return to its pre-2009 levels? That would imply deep cuts. It seems far more likely that, if the stimulus passes in its current form, we are witnessing permanent bump up in the size HHS. The cost of this bill is thus far higher than even the staggering sums in the CBO cost estimate.

What’s just as troubling is the large number of far-reaching policy changes tucked away in the bill.

For instance, the Democratic majority is laying the foundation for government rationing of health care–and the public has heard virtually nothing about it.

The bill provides $1.1 billion for a new program of comparative effectiveness research. The idea is to study medical practice patterns, new products, and new technology to determine what is “cost effective.” In the UK, a similar program run by the National Institute for Clinical Evidence (NICE) is used to deny payment by the government for certain drugs and procedures that are said to be “cost ineffective.”

Democratic lawmakers will deny that rationing is their intent, but that is not credible. Why create a government program to study what’s cost effective if not to use the information to inform payment and coverage decisions? The problem is that this kind of research inevitably includes value judgments (how much is an extra year of life worth?) and interpreting the data is more art than science. In the wrong hands (like a distant government bureaucracy), so-called effectiveness research can be very dangerous indeed.

James C. Capretta is a fellow at the Ethics and Public Policy Center and a health policy and research consultant.



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