Health Care Update

Last week the president told Republicans to stop using scare tactics in opposing the health care reform. Yesterday he laid out a line of scare arguments himself including saying the federal government would go bankrupt. Now there's no doubt that health care costs are going to continue to rise and something should be done but blaming the bankrupting of the federal government on a failure of the health care reform bill is a bit of a stretch. I guess we are just supposed to ignore the $700B stimulus and all the other money this administration has spent. But let's stick to the health care arena. I have a few recommendations that could significantly reduce medical costs in this country.
1. Tort reform for malpractice. The amount of money spent on malpractice itself is fairly small, less than 1% of health care spending. However, the amount of money spent of unneeded testing which doctors order to prevent getting sued is a significant portion of the health care expenditures coming in at about 9%. Tort reform could reduce this.
2. Allow Medicare and Medicaid to shop for the best drug prices. This is currently against the law. The elderly use more medications than any other demographic and more than many other age demographics combined. With our baby boomer bubble moving into their elderly years the demand for drugs paid for by Medicare and Medicaid is going to increase significantly. Let's allow them to purchase at a better price and save the difference.
3. Ease the government mandated administrative requirements in health care. Some studies estimate that administrative costs eat up 17 of every $100 in medical expenditures. There is a lot of opportunity for savings there.
The House bill which passed and the Senate bill which is floundering don't have any cost reductions in them. The House bill is supposed to save about $160 billion over 10 years but that savings is predicated on future reductions in Medicare/Medicaid spending of $420 billion over same period. No congress has ever reduced Medicare/Medicaid spending and I don't think any future one will either. We don't need the federal government to reform the health care in this country, we need the federal government to stop putting expensive requirements and restrictions on the health care system.