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Health reform not focusing on waste

Nancy Marshall-Genzer Oct 26, 2009

Health reform not focusing on waste

Nancy Marshall-Genzer Oct 26, 2009


Kai Ryssdal: Just to bring everyone back up to speed on the health-care debate, seeing as how it’s been a while since it’s been the top of the news. Two different Senate Committees came up with two different bills earlier this year. Among the more critical differences was this: One had a public option, a government-run insurance program. One didn’t. The public option was largely written off after the Senate Finance Committee didn’t include it in their bill. Today Senate Majority Leader Harry Reid wrote it right back on again.

HARRY REID: The best way to move forward is with a public option, with the opt-out provision for states.

Reid announced he’s sending a bill with the public option in it to the Congressional Budget Office so they can figure out how much it might cost. Cutting those costs is what we’ve been promised a health-care bill will do. And Marketplace’s Nancy Marshall Genzer reports from Washington, there are plenty of places to trim.

NANCY MARSHALL GENZER: A government-run health-care plan is far from a done deal. But health-care policy experts say, if it becomes law, it would go a long way toward slashing health-care costs.

Jonathan Oberlander teaches health policy at the University of North Carolina.

JONATHAN OBERLANDER: The private insurers would be forced to respond because they wouldn’t want to lose market share to the government plan. And so you might set up a system of competition between private and public insurers that could lower costs.

Oberlander says the government would have tremendous bargaining power to reduce the cost of care and medication. But there’s still a lot of waste that’s not addressed by Congress. A Thomson Reuters report out today says the U.S. health-care system wastes about $700 billion every year. The report says unnecessary care accounts for more than a third of excess costs. Congress touches on that. But the focus of the overhaul is insurance.

EWE REINHARDT: This is really an insurance extension bill.

Ewe Reinhardt is an economist at Princeton. He says it’s easier for Congress to focus on the uninsured. The problem with eliminating health-care waste is one person’s waste is another’s income.

REINHARDT: The Hill is full of people with money bags handing out money to prevent cost containment, because they read that as income containment.

Jim Kessler is founder of Third Way, a centrist think tank. He says lobbyists sometimes work against each other.

JIM KESSLER: Doctors and hospitals might have a differing viewpoint on reimbursement rates and how those are structured compared to insurers. You know they’re not all rowing in the same direction.

Kessler says lawmakers could take advantage of that, to nibble away at the edges of health-care waste.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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