David Brodwin is a cofounder and board member of American Sustainable Business Council. Follow him on Twitter at @davidbrodwin.
Although the Supreme Court has approved President Barack Obama's healthcare reform legislation, the fight over its future rages on. In the name of fiscal conservatism, opponents of the Affordable Care Act promise to "repeal and replace" it with something they can't or won't explain. They aim to preserve the changes that Americans clearly want while blocking any mechanism that could pay for the changes. This is both bad economics and dishonest leadership.
A real fiscal conservative would focus on the big picture: what our healthcare system costs us, what we can afford, and what we get for our money. With or without the Affordable Care Act, the economics of healthcare in the U.S. remain broken. We pay 16-18 percent of our national wealth (gross domestic product) on healthcare, compared to 10-12 percent of GDP spent by other advanced, Western countries. Many of these other countries actually enjoy better outcomes (how long people live and how healthy they are) even though they pay a third less.
We cannot overpay for healthcare without undermining the productivity and competitiveness of our economy. The damage hits at all levels: market share, profitability, wages, consumer spending, and investments in education and infrastructure that boost productivity.
A real fiscal conservative would not pretend that we can maintain the coverage improvements that Obamacare brings without paying for these improvements. Right now, most Americans want the benefits of the Affordable Care Act, even though they question the act itself. Americans want protection from coverage denial and cancellation due to pre-existing conditions. They want their kids to be insurable on a parent's plan until age 26. They want premiums for individual coverage to remain affordable, particularly as businesses cut back on workplace-based coverage. Proponents of "repeal and replace" claim we can continue to provide all these popular improvements yet they refuse to pay for them (by attacking the individual mandate). That just can't work.
A real fiscal conservative would recognize that we can't improve the economics of our healthcare unless we wring excess cost out of the system. The level of marketing and administrative overhead in our system far exceeds the spending elsewhere in the developed world. In many parts of the United States, monopolies and oligopolies allow healthcare providers to raise prices at will. Small businesses and individuals have no negotiating power and no recourse. Either we must stimulate more direct competition among providers and insurers, or we must regulate to ensure that the money charged goes toward care, not overhead. There is no other choice.
A real fiscal conservative would be willing to challenge overutilization. Doctors continue to prescribe drugs and procedures that haven't been shown to work. Patients clamor for staggeringly expensive treatments that provide only brief and fleeting relief in the course of terminal disease. Efforts to deal honestly with this issue are attacked from all points on the political spectrum. We can debate whether we want a "government bureaucrat between you and your doctor" or an "insurance company bureaucrat between you and your doctor." Both of these phrases make people afraid and gullible, but we can't solve the underlying problem without honestly examining the cost and effectiveness of treatments.
A real fiscal conservative would address the "free riders" who drive costs up. Much has been said of the uninsured who consume healthcare services paid for by others. But an equally damaging free rider problem allows the rest of the world to ride free on what Americans pay for their drugs. It's well known that U.S. residents pay far more for prescription medicines. The extra revenue, arguably, goes to finance the tremendous R&D costs for advanced medications and devices. As a result, the rest of the world gets to enjoy the new and better drugs but not pay their fair share of development costs. This needs to stop. The American public cannot finance the world's healthcare.
Clearly, some Americans like the Affordable Care Act, and some don't. Many Americans like the improved coverage it promises, even while they object to paying for these improvements. But at its best, the Affordable Care Act is just a partial solution. It does little if anything to bring total U.S. healthcare costs down to reasonable and affordable levels. Let's declare an end to the current fight over the Affordable Care Act, and turn our attention to the challenge that matters most.