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Q & A: Conservative analyst on health care

Joseph Antos, a health economist at a conservative think tank. the American Enterprise Institute for Public Policy Research, discusses his views on U.S. health care reform with
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Joseph Antos, a health economist at the conservative think-tank American Enterprise Institute for Public Policy Research, tells what he sees as the main problem with U.S. healthcare, what he thinks of universal coverage, and what President Obama should do.

What is the main problem with the health care system in the United States?
The principle problem is the high and rising cost of health care and the likelihood that much of that money is spent on low- or no-value services.

Is the current U.S. system sustainable? In other words, what will happen down the road if nothing is changed?
Absolutely not. What we’re seeing in the United States are substantial increases every year in the share of GDP going into the health sector. What that means is that we’re slowly but surely squeezing out all other forms of consumption, and clearly that’s not sustainable. That’s the path we’re on and we need to get on a path in which the increase in health care spending slows down. It’s completely reasonable for an aging society, which the United States is, to spend more of its GDP on health care, however, we have to find a way to recognize that there are resource constraints. Our system is really designed as if there were no resource constraints whatsoever — and that’s what’s behind this seemingly inexorable increase.

How should the United States alter its system and is universal health care feasible?
I think we should start by looking at cost and value. The fact is that increasing health care cost is the principle reason why people don’t have insurance. If you can’t afford it you can’t buy it. So, dealing with cost first is the most important step that we could take. I don’t think we’re going to take that step because politicians would rather look like they’re giving you something for nothing. Ultimately, however, the resources come out of the system somehow — in the form of higher taxes, or higher out of pocket payments for health care — so there’s not only no free lunch but also no free health care.

We will eventually get the point where everyone will have access to health insurance. It's not clear to me that we’ll require everyone to buy insurance or participate in a government program. We’re clearly moving in that direction, but we won’t get there next year. It won’t happen in five years. This takes a lot of work, major changes in institutions. We do need to get on with it, but people shouldn’t be misled into thinking they’ll wake up next year with full insurance and no extra costs.

How would universal health care impact the taxpayer?
Some estimates say that over the next 10 years that the Obama plan, if it were implemented next year, would cost one-and-a-half trillion dollars. Since his promise is that the average person would not see their health care costs increase, that means that most of the additional cost would come from taxes, and he said that only high-income people would bear that cost.

Now, there’s another way to pay for this, and that is to find ways to eliminate unnecessary health spending. But, that’s not popular with politicians. While you or I might agree that something is not necessary, the physicians and the hospitals would see that as a reduction in their pay. Furthermore, it is rarely clear in medicine what is or isn’t necessary for a specific patient.

Is there another country’s system, or combination of elements of other systems, that the United States should adopt to improve its coverage?
Holland and Switzerland are the two countries mentioned by many people across political lines. But I never point to any other country and say that’s the way we should go because it’s far more complicated. As admirable as (those countries' health care systems) may be, they came about because of the historical and cultural developments of their populations over the last 40, 50, 60 years. We’re not talking about something as simple as changing health institutions — it’s about how citizens view the role of their government and their relationship with their doctor.
So, there may well be some elements that one might think of as elements of management, but when you get to the question of can you simply transplant a system the answer is clearly no. We don’t have to look at Europe to know we could do better. All we have to look at is Florida, being one of the highest cost systems, and Minnesota, being one of the lowest cost, to know we could do better. But we need to work through the problems ourselves.

Do you think President Obama will lead the country in the right direction regarding health care coverage? What advice would you have for him?
I think he’s trying to lead in the right direction and I think if it were just up to him that we would be moving in a better direction than if we left it up to the Democrats in Congress, many of whom take an extreme view of what they can accomplish politically when this problem is only a political problem to a small extent.

I think the main advice would be to reduce his promises, reduce the political rhetoric, concentrate on trying to reduce spending, embrace bipartisanship, which he is more inclined to do than his colleagues in Congress, and focus in two areas that I think don’t get enough attention. The first is the Medicare program, our program for the elderly and disabled which has serious structural problems and has been largely ignored in health care debate. The second is the tax treatment of health insurance which has been discussed but primarily as a political talking point raised favorably by Republicans and dismissed by Democrats.