Rationing care is inevitable to control health care costs

Those on the left will pretty much sacrifice everything to attain their goal of universal coverage.

But, in this well-reasoned piece by conservative economist Tyler Cowen, expanding coverage won’t necessarily control costs, which is a more imperative issue. The bandied about means of cost control, such as electronic medical records, cutting provider payments, and preventive care, all will have little nor no impact in controlling costs.

Take physician reimbursements, for instance, a favorite target of health reforms. According to Princeton economist Uwe Reinhardt, a favorite son among policy wonks, cutting physician pay by 20% would only reduce spending by 2%.

Furthermore, under the current payment system, simply cutting provider reimbursements will only give more of an incentive to do more procedures to make up for lost revenue.

The hard truth is that care will be rationed, and that’s something the Obama administration is unwilling to admit. Indeed, as Mr. Cohen writes, “if we aren’t willing to take even limited steps to conserve resources, we shouldn’t be spending any more money elsewhere.”

Cost control first before universal coverage, and therein lies the central contention of the debate.

And the worst case scenario, as progressive blogger Ezra Klein correctly surmises is, “that the final bill will include a pricey expansion of coverage paired with a speculative and uncertain set of cost controls.”

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