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The Wrong Stimulus for Health Care


As part of the stimulus bill, the House wants to pump least $160 billion into our already-bloated health sector, and members say they intend to fight for every penny when the bill goes to conference with the Senate. 
The health-related provisions take a sharp turn toward greater government control over our health sector, without any hearings or serious debate in Congress and without telling the American people what the changes would mean for their personal health care. This is the biggest land grab in the health sector ever attempted by the federal government, and it would be a major step toward thrusting full responsibility for health-care financing onto the American taxpayer–today and for decades to come. 
For starters, the bill would create a 15-member federal health board, composed entirely of federal employees appointed by the president, charged with running “comparative effectiveness” research to assess which drugs and other medical treatments are most effective. The board’s decisions would determine what medical treatments the federal government would or would not pay for. The treatments some patients desperately need might not be on the list. House Appropriations Chairman David Obey (D., Wis.) explained that drugs and treatments “that are found to be less effective and in some cases, more expensive, will no longer be prescribed.” 
The bill would also establish a $400 million slush fund, which the secretary of health and human services would use to give government, not doctors and patients, more control over health-care decisions. 
There will be a substantial burden on employers: The bill would impose a back-door mandate for them to continue providing health insurance to workers long after those workers have left. PricewaterhouseCoopers says the ten-year cost of this provision would be up to $65 billion just for those workers currently eligible for COBRA (the current program through which people can participate in ex-employers’ health plans). The estimated costs would be even higher if many more workers retire early, as they likely will if they know they can continue their employment-based coverage indefinitely. 
Further, under the bill, the federal government would reimburse workers for part of their COBRA bills–at least 65 percent under the House bill and 50 percent under the Senate version–creating a major new health spending program without the slightest debate over the economic distortions this would cause. 
Also, having already repositioned SCHIP as a program for middle-income children, Congress wants to do the same with Medicaid. The House bill would have the federal government pay 100 percent of the costs for states to extend Medicaid coverage to unemployed workers and their families, no matter what the families’ income or assets. Under this definition, President Bush and members of his cabinet would be eligible for Medicaid. 
Finally, the bill would allocate more than $20 billion to health information technologies, despite the fact that no one has been able to come up with a workable plan to spend even a fraction of that amount wisely. Speaking from experience in managing these types of initiatives, one of us (Winkenwerder) can say it is simply impossible to spend sums that huge wisely–not to mention quickly enough to stimulate the economy. 
The U.S. already spends $2.2 trillion a year on health care, and it is widely acknowledged that we are not getting anything close to our money’s worth. Can we invest an additional $160 billion wisely? Highly unlikely. The health-related provisions of this bill are too consequential to be rushed through in this gigantic spending bill.

–William Winkenwerder, Jr., M.D., MBA, is Chairman of The Winkenwerder Company and served as Assistant Secretary of Defense for Health Affairs in the U.S. Department of Defense from September 2001 until April 2007.  Grace-Marie Turner is president of the Galen Institute, a think tank specializing in health reform, and previously served as a member of the federal Medicaid Commission.


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