Is It About Health Care, or About Making Money?

Just a few months ago, national health care reform seemed solidly on the path to congressional approval. A popular new president made it his top domestic priority and turned the process over to the leadership of large Democratic majorities in both houses. The path became rocky, though, with most Republicans and many conservative Blue Dog Democrats signaling concern.

President Barack Obama and the Democratic leadership in Congress initially hoped they could put health reform on the fast track to passage and planned to have bills out of both houses before the August recess. This aggressive timetable was based in part on the fact that these reforms build on our current system.

Republican talking points claim the president's health care plan is, "too much, too fast, too soon." But Obama's approach to reform may be more notable for what it does not change rather than for what it does. The mantra of reformers has been, "If you like what you have, you can keep it." Their proposals aim to strengthen employer-sponsored health care, Medicare and Medicaid.

The details of this gradual policy change are strikingly similar to those of the state health care reform bill we nearly enacted in California last year. Most current versions of the bill include mandates for employers to offer and individuals to carry health insurance, both with limited exceptions. There are insurance-market regulations designed to eliminate the practice of denying coverage to people based on pre-existing conditions. And there are well-intentioned but very modest provisions to rein in the soaring costs of medical care.

This is a very different approach from the Clintons, whose early-1990s reform proposal would have fundamentally changed the financing and delivery of health care.

But How Much Will It Cost?

This time around, all was going very smoothly. But reform hit a snag. In the Energy and Commerce Committee in the House, conservative Democrats raised several concerns.

Among them were the nature of a public plan that would compete with private insurers; the details of an "employer mandate" to provide coverage and its effects on small business; and whether the plan would truly achieve long-term savings in the health care system.

In the words of Mike Ross, a Democratic congressman from Arkansas, "We have to take steps to hold health care costs to the rate of inflation, or we will never balance our federal budget again, and health insurance costs will continue to become less and less affordable for the American people."

To make sense of this dust-up, it is important to understand there are two kinds of costs.

The first type is the part of the legislation that would be included in the federal budget. Estimates put this price tag at approximately $1.4 trillion over the first 10 years the program would be fully in place. The second type of cost is the total amount spent on health care by any given family in a year. These different costs can move in different directions.

If Americans get a better bargain on health care as a result of government spending, then the size of the federal budget could go up while total health care costs to families go down. But for this to be the case, federal reforms have to improve the value we get for our medical spending. Value is the combination between the quality of care and what we pay for it.

Follow Best Practices

Those two kinds of costs are at the nexus of the debate in Congress. Many critics of the bills as currently written argue that more needs to be done to make health care affordable for households while also putting the federal government on a path to a more sustainable fiscal future. To do this, they say, Congress needs to catch up to the best hospitals' and doctors' practices.

In response, congressional committees and their staffs have worked to find ways to reduce the amount that both the government and American families spend on health care by transforming the way health care is paid for and delivered.

To understand why this is important, you need to know about what Dr. Atul Gawande, a surgeon at a nonprofit teaching hospital associated with Harvard Medical School, calls the "battle for the soul of American medicine."