NEJM weighs in on Obama’s budget plan

In a rather measured Perspective piece by correspondent John K. Iglehart, the New England Journal of Medicine expresses admiration for President Barack Obama and his commitment to health reform. At the same time, however, the closely read periodical also admits to some doubt that Obama can make an appreciable dent in health care spending, at least to the extent that is needed.

You may recall Obama last week released a $3.6 trillion proposal that challenges Congress to commit a “down payment” of $630 billion over the next decade to finance health care reform. The NEJM reminds us that this adds “substantially” to the $150 billion in health-related revenues from the economic stimulus package he signed into law last month.

“In addressing the vast medical economy, Obama has proposed a grand bargain to the American people and the disparate array of private interests engaged in health care. The administration has assured the populace, providers and its political allies that it is serious about pursuing reform and expanding coverage.

Oh, but those hurdles. As the NEJM notes, this will require reductions, totaling $318 billion over 10 years, in Medicare and Medicaid payments to health plans, drug makers, hospitals, and home health care providers. Where will the rest come from? Raising taxes for Americans in the highest tax brackets. And even then, it will be far from enough.

“Though strident in its language,” the NEJM writes, ” the budget proposal includes only a sliver of the savings required to slow the growth of health care costs to anything close to the rate of growth for non-medical goods and services. Very little in the history of modern Congress suggests that legislators have the stomach to retrench a sector that is such a large part of the economy, particularly one with an impressive record of creating jobs.

“Carrying it off in normal times would take much of the political capital of any president, and this is only one of countless challenges faced by the new administration. On the other hand, Obama pulled off a historic victory last November; perhaps he will prove capable of bending the cost curve and achieving health care reform as well.”


Covering health reform and Obama’s proposed budget

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