Friday, October 31, 2014

HEINTZ: Don’t let rising health care costs hurt poor

By ANDY HEINTZ, For What It's Worth | 3/20/2013

It’s sad that so many of our wise solons in Congress still consider deficit reduction to be their No. 1 priority — the problem of all problems.

While it’s true our federal debt is a long-term problem that will require creative solutions and difficult choices, its relevance today is eclipsed by the urgent need to deal with the ongoing jobs crisis. And one of the most surefire ways to curb America’s high unemployment is to make sure the middle class has enough money in their pockets to purchase the goods and services available in the U.S. economy. Because, in a sense, through their spending, the middle class are some of the country’s biggest job creators — a term that is all the rage in Republican circles.

It’s sad that so many of our wise solons in Congress still consider deficit reduction to be their No. 1 priority — the problem of all problems.

While it’s true our federal debt is a long-term problem that will require creative solutions and difficult choices, its relevance today is eclipsed by the urgent need to deal with the ongoing jobs crisis. And one of the most surefire ways to curb America’s high unemployment is to make sure the middle class has enough money in their pockets to purchase the goods and services available in the U.S. economy. Because, in a sense, through their spending, the middle class are some of the country’s biggest job creators — a term that is all the rage in Republican circles.

But if Congress is determined to take the axe to federal programs, it should be done in a fashion that doesn’t disproportionately hurt the poor.

Unfortunately, many of the solutions being advocated as solutions to the debt crisis fail to address the real driver of our country’s long-term debt: Soaring health care costs. For example, the politicians who want to raise the eligibility age to receive Medicare from 65 to 67 are attacking the symptoms while leaving the main problem — high health care costs — unsolved. Medicare isn’t the main driver of rising health care costs. In fact, it has been better than private insurers — and Medicaid is better than both — at containing costs. Making Medicare less accessible and less optimal for seniors isn’t the only way to balance the federal budget.

Instead of reforming Medicaid in a way that makes it less effective, the government should expand it to everyone and allow it to use its bargaining power to negotiate with pharmaceutical companies over prescription drug prices. Another way to curb health care costs is to offer alternatives to the patent-monopoly status currently provided to pharmaceutical companies by the government. While drug companies deserve to be compensated for the research and testing they do to bring a new drug to the market, the temporary monopoly they receive causes drug prices to be hundreds of dollars, and sometimes thousands of dollars, more per prescription than they would be if they were being sold at a free market price. One alternative to this system has been offered by U.S. Sen. Bernie Sanders, I-Vt. Sanders has proposed setting up a prize fund that would reward drug companies that come up with innovative new drugs to treat HIV-AIDS. For the reward money, the companies would agree to have the drug, after it’s approved by the Food and Drug Administration, placed in the public domain where it could be sold at a free market price.

Another alternative mechanism, proposed by Dean Baker, co-director of the Center for Economic and Policy Research, is to have the government publicly fund the research and testing up front — perhaps by contracting the services out to private drug companies, as long as the companies agreed the drugs would immediately be placed in the public domain.

One way to put a dent in Medicare costs would be to allow the program’s beneficiaries to obtain services from cheaper health systems in other countries — America’s health care system is much more costly and inefficient than systems in other western countries. Baker suggests the government and beneficiaries could split the savings from the cheaper services.

Health care spending is a huge problem that will require innovative solutions and tough choices. Whatever solutions Congress comes up with should be geared to yield the least harm to the poor and elderly.

Andy Heintz is a political commentator. He previously was a Herald staff writer, now a sports reporter at the Ottumwa Courier, Ottumwa, Iowa. Read his blog at http://www.orble.com/just-one-mans-vision/

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