New budget

The Obama administration released a new proposed budget today which includes a $634 billion fund for health care reform. See the article in the Washington Post.

I'm less interested in where this money is coming from (increased taxes on high earners, reduced payments to insurers, hospitals, doctors and drug manufacturers) than in just exactly what it will be spent on. Since the United States already spends far more per capita on health care than any other nation (and gets less for it) I'm wondering why we need to spend even more, and on what exactly.

The Post says: "By first identifying a large pot of money to underwrite health-care reform -- before laying out a proposal on who would be covered or how -- Obama hopes to draw Congress to the bargaining table to tackle the details of a comprehensive plan. The strategy is largely intended to avoid the mistakes of the Clinton administration, which crafted an extensive proposal in secret for many months before delivering the finished product to lawmakers, who quickly rejected it.

" 'We aim to get to universal coverage,' administration budget aide Keith Fontenot told health-care activists last night. Obama is 'open to any ideas people want to put forward. He wants to work openly with the Congress in a very inclusive process.'

"Virtually every major player in the health-care sector will find something to object to in Obama's plan, an intentional decision made in the hope that 'a little bit of pain' will be offset by the appeal of insuring millions more people, said one White House adviser."

This sounds shrewd, if somewhat cagey. (Maybe those two are the same.)

Here's a little more information, again from the Post: "If the budget is approved by Congress, drug companies will be required to increase the rebate they pay on medications sold to Medicaid patients from 15 percent to 21 percent. The proposal, which would raise $19.5 billion over 10 years, is likely to spark strong opposition from the industry, which has argued that the current rebate cuts into profits.

"Wealthy senior citizens would also be asked to pay higher premiums for Medicare drug coverage, similar to the higher premiums they now pay for physician visits, according to the Obama blueprint.

"The budget figures also represent significant shifts in how the United States will pay for medical care.

"For example, experts have identified hospital readmissions -- especially for elderly patients -- as a sign of poor care and unnecessary expense. About 18 percent of Medicare patients are readmitted to the hospital within 30 days of an original visit. The new approach would establish flat fees for the first hospitalization and 30 days of follow-up, sometimes done by separate facilities. Hospitals or clinics with high readmission rates could be paid less."

It's hard to tell from the article whether reforms such as that described in the last paragraph are actually in the new budget, or are just ideas that someone is tossing around. What is clear is that the budget identifies the proposed sources of the money much more specifically than its destination.

Perhaps spending more money isn't such a bad idea, given that I'm hearing that many of the health care systems in Europe are currently in financial trouble, or will be very soon. We may all, including the Europeans, have to spend more money on health care than we are currently.