Paying For Health Care Reform Won’t Lead to Rationing, Senate Finance Chair Says

Josiah Ryan | April 24, 2009 | 6:25pm EDT
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( - President Obama’s plan to pay for health care reform by creating efficiencies in the nation’s medical system will not result in government-mandated health care-rationing, said Senate Finance Committee Chairman Max Baucus (D-Mont.), who is co-leading the Democrats’ effort in the Senate to reform health care,.
He spoke with at a breakfast for the media at the National Press Club (NPC) in Washington early Friday.
Republican lawmakers, however, have argued that that if Obama quantifies savings, he must also quantify the cuts that would produce the savings, which could lead to the rationing of health care.
“There is no rationing of health care at all,” Baucus told on Friday. “You choose your own doctor. You choose your own health insurance that you want to have. This is all a choice.
“What we are talking about is squeezing cost out of the system because of an emphasis on quality care, not quantity,” Baucus told “Today the emphasis in the reimbursement is quantity whether you are a doctor, or a medical equipment manufacturer, whatever you are. It’s quantity. You get paid for the number of units that you provide.
“This is a whole new way of doing business,” said Baucus. “The usual way of doing business is maybe a cut here or a rationing there, because you can’t do this or you can’t do that … we are not talking about that ...  although there may be some cuts.”
But in arguing for the president’s health care reform plan, administration officials have suggested that some cuts in medical services will be needed to contribute to the projected savings.
“Look at health care, the frequency of different procedures, whether it's tonsillectomies or hysterectomies in different parts of the country – and what you see is that in some parts of the country procedures are done three times as frequently and there's no benefit in terms of the health of the population,” Lawrence Summers, director of the White House’s National Economic Council, said on Meet the Press last Sunday.
“And by doing the right kind of cost-effectiveness, by making the right kinds of investments and protection, some experts estimate that we could take as much as $700 billion a year out of our health care system,” Summers said.
Obama’s first major step towards healthcare reform, which was introduced as a $634 billion ‘down payment” in his $3.67 trillion budget proposal for 2010, claims it will pay for itself with “new revenue and savings proposals that promote efficiency and accountability, align incentives towards quality, and encourage shared responsibility,” according to the Office of Management and Budget (OMB) Web site.
According to the OMB’s Web site, these savings, which OMB Director Peter Orszag calls “game changing efficiencies,” are achieved by “aligning incentives toward quality, promoting efficiency and accountability, and encouraging shared responsibility.”

Republicans have argued, however, that it is impossible to quantify the amount of savings without quantifying the amount of cuts.
“If you’re going to quantify [savings] with certainty, that means you feel you’re going to ration with certainty,” said Rep. Paul Ryan (R-Wis.) on Feb. 26.
“How do they propose to go about doing this?” asked Ryan. “Do they propose to set up a system where the government is in the nucleus of our health care system, where the government is telling providers – physicians – how to practice medicine?”
“I do share that concern [on rationing], and that’s why I oppose any expansion of the federal government’s role as a provider of health insurance coverage,” House GOP Conference Chairman Mike Pence (R-Ind.) told last week. “That ultimately can set us on the pathway to socialized medicine in this country, and rationing is a natural product of socialized medicine.”

Despite his confidence that savings gained through efficiencies will create a steady stream of revenue for health care reform, Baucus conceded on Friday that it is still unclear how precisely the reform will be paid for, or how much it will cost.
“We have headwinds in all revenue areas,” Baucus told when asked for ideas on how the plan could be paid for. “We will have to get to that when we get there.”
Obama’s plan to raise revenue for his $634 billion health care reform ‘down payment ’ was weakened during the Senate’s debate over the budget last month when key tax increases were stripped from the final version of the bill.
For example, nine Democrats joined Republicans to protect upper class American families from facing the federal estate tax, and the Senate voted 94-3 against lowering tax write-offs available to upper class Americans who make contributions to charitable organizations.
“That [taxes increases to raise revenue for health care reform] has run into a little bit of headwind, but most tax increases do," Baucus told reporters.
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