Guest Commentary: Healthcare Reform is Fiscal Reform

Eric Jutkowitz
Post-Baccalaureate Fellow
Jefferson School of Population Health

In last week’s New York Times opinion page, Paul Krugman wrote an excellent piece on the relationship between healthcare reform and budget reform. Although I agree with his analysis and opinion, he seems to be misunderstood by many in the media and politics.
His main thesis is that to reform healthcare is to reform the deficit problem.

Skyrocketing costs of healthcare services and the aging population are threatening not only the viability of Medicare but also the Federal budget. It may seem counterintuitive that passing health reform, which will insure more individuals and provide greater access to care, will actually help reduce the deficit. However, along with increasing access to care, the Senate healthcare proposal will enact cost-cutting measures to save money. Krugman and many other economists and health policy experts adamantly believe that the cost to insure the uninsured, coupled with cost savings, will result in a net savings to the system.

If these experts are right, that healthcare reform will reduce the budget deficit, then two key questions arise:
1) How are costs going to be cut? and
2) Why is this not being used as the primary selling point of health reform?

Cost will be controlled primarily through cuts to Medicare. From my understanding of the Senate health bill, this cost cutting will not be blind. Rather, the government will cut inefficient or ineffective programs and fund those interventions which are proven to work.

In theory, this is a good idea. However, for many health conditions and medical procedures, we don’t have all the answers as to what is the most efficient care. The government has started to fund projects which help to answer these questions, but much more research is required. Nevertheless, The Congressional Budget Office found that the proposed cost-cutting measures will result in a net savings to the healthcare system.

Why does a bill that increases access to healthcare for the uninsured, eliminates wasteful spending, and reduces the budget deficit, not easily pass through Congress? For one, there is considerable uncertainty about the types of cuts that will be made to Medicare. Aside from general fear of the unknown this has become, as Krugman points out, a key weapon of opposition and an easy way to stir up fear. However, I also believe that the President has done a poor job of making the connection between healthcare reform and the budget deficit. In every speech he gives, he should be talking about the looming budget deficit and how health care reform = budget reform. Not till this connection is made will Americans realize that healthcare reform is more than just increasing the number of insured.