Professors Analyze President Obama’s Plan to Reform the Nation’s Health Care System

Poll results released July 1 indicate that only a small majority of Americans - 51 percent - are in favor of President Obama’s health care reform proposals (CNN/Opinion Research Corp.). The president is calling for government-run health insurance options for those without private insurance and these proposals are currently working their way through various congressional committees.

Harvard Kennedy School Professors Amitabh Chandra and Robert Blendon shared their thoughts on the proposed plans, the political challenges they may face and health care reform in general.

Robert Blendon, Professor of Health Policy and Political Analysis at the school of Public Health and a faculty member of HKS:

“There is a misperception about the political state of the current health reform debate. A health reform bill ultimately will be enacted with President Obama's named attached. The question is how comprehensive and sweeping it will be. Democratic political leaders learned a sobering lesson from 1994. You cannot raise public expectations to a near fever pitch about reform and then enact no legislation. It undercuts your claim to be the party of change and leadership.

“How sweeping the legislation will be is dependent on two issues. The first is finding revenues to cover 46 million uninsured, and providing support for the costs of the major restructuring of health care. Potential sources for this are new taxes on people or businesses, substantial short-term savings from the existing Medicare and Medicaid programs or increasing the deficit. Each of these remains politically controversial. If adequate financing can not be found from these sources, the Obama reform bill will be much smaller in scope.

“The second issue relates to whether or not a public plan like Medicare is included as a competitor to current private health plans. Without some compromise here, the debate will be extended over a much longer period. But ultimately the President and the Congress will pass a bill. The question is will it be called major reform.”

Amitabh Chandra, Professor of Public Policy, Interfaculty Initiative in Health Policy (from his testimony before the U.S. Senate Finance Committee, Hearing on Health Care Reform Nov. 2008):

“Because of our peculiar choice of tying health benefits to employment, Americans lose insurance when they lose their jobs. Some respond by being more reluctant to switch jobs because they don’t want to lose their insurance and be exposed to the threat of medical bankruptcy. But such switching is key to revitalizing our economy, as workers should leave failing firms and move to more exciting opportunities.

“All this said, there is no reason to believe that simply because something is expensive it’s not worth it. But we now know that 30 percent of medical spending in the United States confers no medical or therapeutic benefit. The United States spends over 2.1 trillion dollars a year on healthcare and 30 percent of that is 700 billion dollars annually—a number that has particular significance today. It is surely possible to offer more affordable health insurance policies that don’t cover this 30 percent of wasteful spending.

“Reforming the individual health insurance market through regulatory reform is [an] option, and one that will eventually pave the way for the delicate task of decoupling insurance from employment. At present, insurers have an incentive to shed their sickest enrollees. Nor are insurers held responsible when inadequate coverage raises the costs for a future insurer, such as Medicare. The problem of geographic variation in how medicine is practiced will mean that premiums in Hanover, New Hampshire will be substantially higher than those in McAllen, Texas. Simply deregulating insurance markets does nothing to address these concerns.

“We should also acknowledge that efforts to insure the uninsured will not check subsequent premium growth. Moreover, insuring the uninsured will give them access to the sort of health care that everyone else receives, which is a combination of valuable care, the overuse of costly care with little proven benefit, and underuse of some vitally important therapies. It is not fundamental reform.”

Read Prof. Chandra’s complete Congressional testimony: http://www.hks.harvard.edu/news-events/news/testimonies/amitabh-chandra-health-care-reform-testimony-nov08