Opinion Column

What Counts as a Sacrifice in Health Reform?

This column is a collaboration between KHN and

The New Republic

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Twice during Wednesday night’s press conference, reporters asked President Obama what sacrifices his health care reform plans would ask of the American people. It’s a common and intuitive question: in order to give the public something-like a guarantee of health insurance that they can afford–the public has to give something up.

Of course, it hasn’t always worked that way in practice, like in the Bush years. But just because the last guy in the White House didn’t demand the American people pay for some policies doesn’t mean the new guy should. Most experts would tell you that achieving universal health care will require ponying up some new money. And the money has to come from somewhere. Thus, the sacrifice.

Except “sacrifice” is a funny word. Sacrifice means parting with something you value dearly. And that was subtext of those two questions Wednesday night. One, from ABC’s Jake Tapper, wondered whether Americans would have to give up “tests, referrals, choice, end-of-life care.” The other, from CBS’s Chip Reid, asked whether Medicare beneficiaries would have to put up with lesser benefits.

Neither question was ridiculous; there’s a good case to be made that while Americans will surely have to give up some things for reform.

But it turns out there is much in American health care that’s worth giving up–starting with the money wasted on pushing paper around. That includes the money individuals spend, haggling with doctors, hospitals, and insurers over billing disputes. It also includes the money companies spend, feverishly reworking their numbers and calling in consultants to help figure out ways of trimming their health benefits costs.

Some of these exercises may save money for employers or insurers or providers. But they often pass on higher costs to other parties. If you want proof, just look at the amount our country, as a whole, spends on administrative overhead–and compare it to the figures abroad. Surely we can part with some of that spending without missing it.

And that’s not even the largest source of waste, or the most pernicious one. The real source of waste in our system is medical care that turns out to be unnecessary or, in the worst instances, downright harmful.
Some of this is a function of poor coordination among the providers of medical care, the sort of thing you expect when insurance coverage for large portions of the population is so fleeting and fluid. Some of this is a function of the fact we don’t have anything even remotely resembling standards for appropriate treatment, in part because we haven’t bothered to invest the time studying which treatments work.

The evidence for this is overwhelming. Much of it comes from the work of Dartmouth College researchers who have documented huge variations in treatment patterns that appear to have no correlation with quality. (The classic example is Miami and Minneapolis; the South Floridians get significantly more medical care but don’t seem to be better off.) If Obama and his allies get their way, Americans will start giving up these superfluous treatments.

But does this really qualify as demanding Americans make sacrifices? As Obama said, “They’re going to have to give up paying for things that don’t make them healthier. … I think that’s the kind of change you want.”

The catch is that it will take time–probably a lot of time–for these efforts to produce huge savings. Obama and his allies have to raise some money because he committed to paying for reform within the ten-year budget window. That means taxes.

But, again, does that qualify as “sacrifice”? Most, if not all, of the tax revenue will come from the wealthy. It’s hard to see how a tax bill even in the thousands would require somebody making more than a million dollars to endure a hardship. And while middle-class people might (emphasis on “might”) have to pay some higher taxes, their individual bills would be small and–in the long run–might actually leave them better off financially.

Remember, the only tax under consideration that would affect middle-class Americans–a tax on generous health benefits–would affect just a small minority of these people and, even then, by only a small amount of money. (At most $100 or $200 a year, at least in the early years.) But the whole point of such a tax is to drive down health care costs–and insurance prices–so that people will end up spending less money in the long run.

That’s not to say people who owed the tax wouldn’t miss the money. Folks making $60,000 a year don’t generally have a lot of extra money lying around and losing an extra $200 will mean giving something up over the course of the year. But everything is relative.

Without reform, Americans will live in a world where insurance coverage remains as precarious as it is today. Some will rack up huge medical bills, forcing them to give up thousands of dollars, their retirement savings or even their homes. Others will think about the staggering bills and decide to forgo care altogether. They’ll give up something even more precious: their lives. And that, surely, is the ultimate sacrifice.

Jonathan Cohn is a Senior Editor at The New Republic.