Fixing America's Health-Care System

Early this week, President Obama made a landmark decision to grant the federal government, through a new office in the FDA, authority to regulate the content, marketing and sale of cigarettes and other tobacco products. Despite his own well-known cigarette habit, he says his intention is to reduce health risks from tobacco and make cigarettes both less accessible and less inviting to young people. The move, aimed at focusing on health wellness and disease prevention, is in line with his much larger health-care plan for America. He made reference to his proposed health-care agenda in his Tuesday, June 23, 2009, news conference.

“This is legislation that must and will be paid for,” said the president. “It will not add to our deficits over the next decade. We will find the money through savings and efficiencies within the health-care system, some of which we’ve already announced.”

President Obama also stated that the government’s reform would work to lower the cost of health care, and he warned that doing otherwise would leave millions more Americans uninsured. He further emphasized that the current state of the health-care system needs drastic change and that “the status quo is unsustainable and unacceptable.”

“So reform is not a luxury,” said President Obama. “It’s a necessity, and I hope Congress will continue to make significant progress on this issue in the weeks ahead.”

The president’s web site outlines his health-care reform package. Among his recommendations, he cites the necessity to reduce the growth of health-care costs for businesses and government, protect families from bankruptcy or debt, and assure affordability for all Americans. He also supports guaranteeing choice of doctors and health plans, investing in preventions and wellness, improving patient safety and quality of care. Moreover, he advocates ending barriers to coverage for people with pre-existing medical conditions.

Will his changes go far enough, or might they go too far? The Commonwealth Club has heard from a number of health-care advocates, economists, and others seeking to change the system. Zeke Emanuel, chair of the Department of Clinical Bioethics at the Clinical Center of the National Institutes of Health and the brother of Obama's chief of staff, Rahm Emanuel, spoke to The Club on January 8. (See embedded video below.) Zeke Emanuel urged a roots-and-branches overhaul of the system, but it's not clear that such a change is politically feasible. In his talk, Emanuel said, “Most Americans understand that the system is broken. We understand that we have a problem in this country, and I think it’s very widespread.”



Christina Romer, chair of the Council of Economic Advisors in the Obama Administration, made the economic case for health-care reform in her June 8 speech at Club headquarters. She shared the president’s vision for reform. She observed, “The overarching goal is to develop a cost-effective health-care system that preserves quality, expands coverage, and ensures choice and security for all Americans.” (See video here.)

More recently, former U.S. Secretary of State and former Secretary of Labor George Shultz and Hoover Institution Senior Fellow John Shoven explained their plan for handling the nation's spiraling social service commitments, specifically health care costs and Social Security. See video below.



--Commonwealth Club Media and Public Relations Department

George Shultz and John Shoven: New Thinking on Health Care Reform

George Shultz and John Shoven presented their ideas for a reform of Social Security and health care in a featured program last night at The Commonwealth Club of California in San Francisco. Shultz, former U.S. Secretary of State and former Secretary of Labor, is a noted economist and chairs the Governor of California's Economic Advisory Board. He is co-author, with Shoven, of Putting Our House in Order: A Guide to Social Security and Health Care Reform. Shoven is a senior fellow at the Hoover Institute and the director of the Stanford Institute for Economic Policy Research.

Noting that the goals of health-care reform should include full coverage and would entail subsidy for people unable to get coverage on their own, Shultz then sought to explain their proposals for reforming these two gargantuan social programs and related industries.

The event, underwritten by Koret Foundation Funds, occurred just a few days after President Obama's Council of Economic Advisors chair, Christina Romer, spoke to The Club on the economic aspects of health-care reform. She argued that the costs of not reforming health care in this country would be enormous, but that the savings from doing it would improve the economy in many ways.

To see Shultz and Shoven discuss their ideas, watch this video of their Commonwealth Club event:

Christina Romer: Health Care Reform Is "Good Economic Policy"

Citing a series of benefits to the nation's businesses, public coffers and individual citizens, Christina Romer -- chair of President Obama's Council of Economic Advisors -- made the case for tackling health-care reform.

Romer, speaking Monday, June 8, 2009, at The Commonwealth Club of California in San Francisco, gave some backing to people who've been seeing some recovery from the nation's economic crisis, at least if one measures that by her workload. She said that in the first few months of her tenure in the Obama administration, she dealt with a number of crisis-related topics that were all in her professional comfort zone: banking, fiscal stimulus, recession. But after his first 100 days in office, Obama announced his intention to tackle health-care reform, which led Romer to come up to speed on health-care economics.

"I've gone from being a positive but somewhat passive advocate of health-care reform, to being a passionate advocate," she said of the experience.

She worked on a report that looked at the benefits and costs to the country of reforming -- or not reforming -- its health-care system. She said that by the year 2040, health-care expenditures could be as high as one-third of the nation's economy if the system isn't reformed. A failure to reform, she said, could result in stagnating take-home pay (as insurance premiums eat up an ever-larger share of income) and the number of uninsured could rise from an already-alarming 46 million to 72 million people.

But if the country can meet the president's goals of slowing the growth of health-care costs and expanding coverage to the uninsured, Romer said that significant amounts of money could be freed up for investment in other things, savings will increase (which could also result in lower interest rates), unemployment will drop, and and the inflation rate would be lower.

"Good health-care reform is good economic policy," she summarized.

You can read a copy of the report via a link on this post on the White House blog (yes, they have one, too). A critique of the report's approach from libertarian Michael Tanner of CATO Institute is here. Politico.com reports on the political give-and-take over the report.

What do you think? Leave a comment below and join the conversation!

Obama Adviser: Fundamentals of Economy are Sound

Christina Romer, one of President Obama's top economic advisers, echoed one of Sen. John McCain's most derided campaign quotes when she told David Gregory on yesterday's "Meet the Press," "The fundamentals [of the American economy] are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology," she said. "We know that -- that temporarily we're in ... a bad situation."

California residents can get a fuller sense of her interpretation of the health of our economy and how it will be affected by continuing government actions when Romer appears at The Commonwealth Club of California in -- we hope -- the near future. She had been scheduled to appear at The Club tonight, but she had to postpone the speech when government business came up. (Keep watching The Club's web site for a new date when it is scheduled.)

The administration looked to be using the Sunday morning and evening public affairs circuit to paint the picture of an ailing economy beginning to stir. In addition to the president's comments earlier in the week and Romer's assessment yesterday, Federal Reserve Chairman Ben Bernanke told "60 Minutes" the recession would "probably" end this year. (View the video here.)

A story on Fox News makes note of the similar language used yesterday with that of McCain's uttered just days before the fall of Bear Stearns last September. It quotes White House Press Secretary Robert Gibbs making a hard-to-understand argument in the administration's defense, "there's a definitional difference between sound and strong."

When Romer comes to the Bay Area, maybe they'll have the definitions figured out.