Orszag: Health care efficiencies may take decades

AP News
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Posted: Dec 02, 2009 12:30 PM

The White House budget director said Wednesday that it may take decades for America to have an efficient health care system even if Congress passes a major overhaul this year.

"It will be years to decades" before the nation has a properly working health care system that rewards quality over quantity, Peter Orszag told reporters. He said improving the quality of health care "is more like a lifelong nutrition or diet, not studying for an exam," but he added that continuous progress is a crucial goal.

Orszag is one of President Barack Obama's top aides in urging Congress to overhaul the U.S. health care system in the coming weeks. He acknowledged that many key elements of the pending House and Senate bills would not take effect for several years, but he urged Americans to embrace a gradual process.

The House-passed bill would bar insurance companies from denying coverage to sick people starting in 2013. A bill being debated in the Senate would do so in 2014.

The bills would create new government subsidies for buying insurance starting in 2014. Fines for individuals who refuse to buy insurance would begin in 2014, and increase in later years. Other provisions, such as subsidizing long-term care, also would be years away.

Orszag noted that some improvements to the health care system are already in the works. The economic stimulus bill enacted early this year included money to modernize medical record-keeping and to identify the most effective ways to address various medical needs. Both efforts should lead to better care, he said.

Orszag said the nation must move away from its long tradition of fee-for-service health care that tends to reward the number of procedures performed rather than the quality of care. The pending legislation includes pilot projects meant to reduce the number of patients who are quickly readmitted to hospitals, and to restructure payments to hospitals to discourage unnecessary procedures.

Orszag said limits on medical malpractice awards _ which many Republicans favor, but are not in the bills _ would do little to reduce health care costs.

He also rejected claims that the proposed Senate bill would not do enough to encourage people to buy health insurance before becoming seriously ill. Those who refused to buy coverage would be fined $95 in 2014, and up to $750 in later years. Critics say many people would pay the fine and gamble that a serious accident would not hit them with big medical costs before they could buy coverage.

Orszag said studies show that people base such decisions on complicated factors including "social norms," and not just on the "direct financial incentives or penalties" touching their wallets.

He said, for example, that penalties for speeding and failing to wear a seatbelt are similar, but millions of Americans insist on buckling up while tolerating speeding, because fast driving is more socially accepted.

Reactions to the proposed health care fines, Orszag said, "will depend on how social norms develop."

He said he believed the Senate will pass a bill and reconcile it with the House version, despite sharp divisions, especially among senators.

"We stand on the verge of a dramatic accomplishment," he said at an hour-long session with reporters.