Obama out on a health care limb

Barack Obama has put himself out on a limb with regard to health care costs. That's a good thing.

Obama has committed himself to saving $2,500 per family. One version of his plan specifies how the savings would be accomplished - a combination of computerized medical records, administrative savings, and improved chronic disease management. But the key component is the money - $2,500 per family - not the steps to get there.

Our national inability to modulate the growth of health care costs is not a function of inadequate knowledge. There have been innumerable well-documented reports on practice variations, failure to apply evidence-based treatments, excessive use of dubious technologies, and other patterns that add cost without adding value. And we know that apart from practice pattern problems, the bizarre complexities of the U.S. system add a wide range of administrative costs as well.

The inexorable rise of health care costs is best understood as a failure of political will. Costs soar upwards at double the rate of inflation because although we wring our hands and say “it can’t go on this way,” as a nation we have thus far chosen not to take the steps that would set limits on the cost trend.

A $2,500 savings per family represents 8% of our health care expenditures. As I've written in the past - when I have asked respected clinicians in different areas of medicine how much they could save in their area without any loss of quality if they were czar of their field - no one has said less than 25%, and many have said 50%.

A $2,500 per family reduction is achievable if we marshal the political will to do it. That's why Obama going out on a limb is a good thing. If (a) he is elected and (b) he devotes his skills as an inspiring leader to (c) educating us about the drivers of health care costs and the toll these costs take on our social fabric, then (d) the savings will be achievable.

What we need is leadership, not more studies.

Today's New York Times has a good article on Obama's $2,500 commitment. See also the speech I imagined a state governor giving on the topic ten years ago.