NYT editorial: Curbing Runaway Health Inflation

This year’s effort to reform health care revolves around two powerful, conflicting imperatives. One is to cover tens of millions of uninsured Americans. The other is to absorb the enormous cost of that plan — which could reach $1 trillion over 10 years — without increasing the budget deficit in the next decade or setting the nation on a course that will drive up deficits later.

It is easier to see how to accomplish the first task than the second. But Congress should not slow the push for near-universal coverage while it looks for ways to apply the brakes to the growth in costs. We can be virtually certain that the reforms enacted will be deficit-neutral over the first 10 years. President Obama and Democratic leaders will find cuts in Medicare and raise sufficient taxes to offset the initial cost of insurance expansion.

It is much harder to find ways to slow inflation in health care costs. Peter Orszag, Mr. Obama’s budget director, has been searching for what he calls “game changers” that can “bend down the cost curve” in coming years. The question is how well he and Congressional champions of health care reform have succeeded.

WHY IT’S IMPORTANT The skyrocketing cost of health care is driving up federal deficits, threatening to bankrupt Medicare, forcing employers to cut or drop benefits, and leaving workers and their families with unaffordable bills. Even a relatively small reduction in the average annual growth rate over the next decade — from, say, 6.2 percent to 4.7 percent — could save more than $2 trillion for the health care system and hundreds or thousands of dollars for the average family. There is an enormous amount of money in the health care system, much of it spent on tests and procedures that do not improve health. It should be possible to wring out some of that spending.

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