Monthly Archives: December 2008

Weekly Newsletter — December 8, 2008

Obama Proposes Massive Government Spending on Health IT

This weekend, President-elect Obama proposed as one of the five components of an economic “stimulus” package new government spending to promote a health information technology infrastructure nationwide.  While Saturday’s speech contained no specific dollar amounts or proposals related to health IT, his campaign platform previously committed to spending $50 billion over five years “to move the U.S. health care system to broad adoption of standards-based electronic health information systems.”

While supporting the more widespread adoption of health IT as one way better to manage care and control cost growth, some conservatives may be concerned by both the scale and timing of the Obama proposals.  Conservatives may note that the federal government did not need to spend money to develop a nationwide network of ATM machines, for example, and question the need for the significant federal expenditure on health it—particularly if it comes with additional “strings attached” that would result in further federal intervention in the practice of medicine.  Instead, some conservatives may support efforts to provide regulatory relief to physicians—including medical liability reform and changes to the “Stark” laws on physician self-referral—that would empower physicians in the private sector to finance their own health IT purchases without the need for more federal spending.

Some conservatives may also be concerned by the implications of the process outlined by the President-elect.  Congress has spent many years considering health IT legislation without finding consensus on a way forward, but the timeline envisioned by the incoming Administration would see the years-long impasse brought to a conclusion within a matter of weeks.  Conservatives may be concerned that such a rushed process may include provisions advanced by various liberal interest groups—including onerous privacy restrictions that impede efforts to coordinate care, a private right of action related to security breaches likely to breed costly lawsuits, and a patchwork of state and federal laws creating regulatory uncertainty for providers—that may only serve to raise costs and inhibit health IT adoption.

A Policy Brief outlining issues related to health IT implementation can be found here.

Baucus Wouldn’t Pay for Health Reform Until After Medicare’s Bankruptcy

Just before Thanksgiving, Senate Finance Committee Chairman Max Baucus (D-MT) spoke with reporters about the comprehensive health reform white paper he released earlier in November.  Discussing the possibility floated by some Democrat leaders that Congress should waive pay-as-you-go requirements for any comprehensive health care overhaul advanced in the 111th Congress, Baucus noted his expectation that such legislation would not be fully paid for in the short-term, but that after a decade “the bulk of the up-front investments will be offset by cost savings and reductions.”

Some conservatives may note an inconvenient truth associated with this statement: In one decade from now—by the time Sen. Baucus envisions actual cost savings from comprehensive reform—the Medicare Part A Trust Fund will be exhausted.  The latest Medicare trustees’ report predicted an insolvency date for the Hospital Insurance Trust Fund of 2019—and that date could be moved forward if the current economic slowdown results in an expected decline in payroll tax receipts.  If the cost savings from any comprehensive reform legislation will not materialize for a decade, as Sen. Baucus predicted, millions of seniors may face difficult health care choices when Medicare becomes insolvent.

Conservatives may therefore believe that, before even considering whether to expand government programs like the State Children’s Health Insurance Program (SCHIP) or create new health care entitlements, Congress should first work to preserve America’s current entitlements.  Failure to do so could unleash a fiscal catastrophe that dwarfs the current economic turmoil, and jeopardize the health care of millions of seniors—not to mention America’s financial security.