A Republican Bill That Worsens Health Care Costs and Budget Deficits

Robert A. Levine 12-15-11

Republican conservatives and Tea Party types have ranted about how the Accountable Care Act will increase health care costs and federal budget deficits, though the Congressional Budget Office has presented contrary data. But legislation just passed by House Republicans would in itself both raise health care costs and federal budget deficits. In an act of largesse to special interests, the Republicans added onto the bill that extends unemployment compensation and payroll tax benefits, a measure that would benefit physician-owned private hospitals. (Keystone pipeline approval is another unrelated issue inserted into this bill.) The legislation in its current form however, is unlikely to be enacted by the Senate, and would face an Obama veto.

Studies have shown that physician-owned hospitals, where doctors have a financial interest, order more services for their patients, more procedures and more tests than non-profit institutions, contributing to elevated health care costs. (Data suggests that as much as 30 percent of health care spending is wasted on unnecessary care, about $900 billion out of total expenditures of $2.7 trillion.) The Congressional Budget Office estimated that passage of the measure expanding physician-owned hospitals would escalate federal government spending by $300 million over ten years, further raising the budget deficits. Yet House Republicans enacted this legislation at the same time they proclaim their desire to reduce the deficits. Their statements just don’t ring true.

The American Hospital Association did not support this measure that benefits private hospitals because it will reduce Medicare payments to non-profit institutions, forcing them to curtail services and access to patients.

This bill highlights the contradictions in what the Republicans say about the importance of lowering the budget deficits and what they are willing to do. Increasing the deficits was obviously not as important to the Republicans as taking care of a special interest group that provides them with support. It is also evident in the Republican refusal to raise tax rates on millionaires in concert with lowered government spending to attack the budget deficits and national debt. Of course, the Democrats have their own special interests whose concerns they attend to, which has led to the impasse in tackling the budget deficits in an intelligent manner. Until both parties are willing to reject the overtures of the special interests and do what is required to benefit the country, health care costs will continue to spiral out of control and the federal budget deficits will not be brought to heel. Perhaps a third party of the center, not in thrall to special interests, is necessary to finally curb health care costs and federal budget deficits.

Resurrecting Democracy

www.robertlevinebooks.com

A VietNam vet and a Columbia history major who became a medical doctor, Bob Levine has watched the evolution of American politics over the past 40 years with increasing alarm. He knows he’s not alone. Partisan grid-lock, massive cash contributions and even more massive expenditures on lobbyists have undermined real democracy, and there is more than just a whiff of corruption emanating from Washington. If the nation is to overcome lockstep partisanship, restore growth to the economy and bring its debt under control, Levine argues that it will require a strong centrist third party to bring about the necessary reforms. Levine’s previous book, Shock Therapy For the American Health Care System took a realist approach to health care from a physician’s informed point of view; Resurrecting Democracy takes a similar pragmatic approach, putting aside ideology and taking a hard look at facts on the ground. In his latest book, Levine shines a light that cuts through the miasma of party propaganda and reactionary thinking, and reveals a new path for American politics. This post is cross posted from his blog.