Three professors write to White House about health care

The two-page letter, signed by economics professors Uwe Reinhardt, Alan Blinder ’67 and Angus Deaton, lists four specific changes to the bills being considered that they consider crucial to controlling costs. Their goals include making legislation deficit-neutral, implementing an excise tax on high-cost insurance plans, forming a Medicare commission and taking steps to improve the quality, not just the quantity, of health care.

That last step is the most important, Reinhardt said. “Americans strut around the world saying we have the best health care system in the world. At our best, we are unrivaled,” he said, “but the average quality of American health care isn’t really all that good.”

The letter came 10 days after the House of Representatives passed a controversial $1 trillion plan and just before the Nov. 21 Senate vote to begin debating for its $821 billion plan.

Reform is necessary, Reinhardt said, because the health care system suffers from an unsustainable rate of increase in health care spending. Families in the upper half of the income distribution, he explained, end up subsidizing people in the lower half so that the latter can afford health care.

“At the current cost of health care, roughly half the distribution of families in the States really cannot afford to pay out of their own pockets,” he said.

This system is untenable long-term, he added. “If this continues — which means health care spending doubles every two years — eventually two-thirds of the country will require subsidies.”

Deaton said in an e-mail that part of the current problem stems from money being spent “on the wrong things.”

“A lot of people are getting over-treated in a way that might actually hurt them,” he explained, “and a lot of people are not getting things that would help them, like testing for hypertension or for cholesterol.”

Blinder was unavailable for comment.

Reinhardt said he thinks academics have an “obligation” to participate in the debate, even if they have a tendency to “get political” in their analysis.

“To my mind, there is no denying that your own history and ideological predilection somehow come in. There is no point making pretensions,” he said. “But if someone says he has an idea, [an academic] has an obligation to say what he thinks of it.”

Reinhardt noted, however, that University students don’t appear to be very invested in the health care debate. “There is a veneer of students [at Princeton] who are really patriots in a sense, not that they put on uniforms and fight, but at least they really care about their country,” he said. “But in [the students’] defense, Princeton puts a lot of work on you guys … so it’s not clear why you should put the federal deficit on top of all your worries.”

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One of the biggest problems with the current state of health care is that 40 million Americans are uninsured, Reinhardt added.

“The tragedy is that, here, a family that has worked hard for a house, to put kids in college, can have someone stricken with cancer and lose all their savings,” he said.

Reinhardt said that some countries, like Canada and some in Europe, would “consider it obscene” that families could lose their houses and life savings from a single incident of illness. He also noted that the U.S. health care system spends twice as much per capita on health care as Canada, Germany or France.

Many countries are doing better than the United States in terms of confidence in their health care systems, Deaton said, “including many that would be among the last you would ever choose for medical care.”

Reinhardt compared the current debate about health care to a conflict between distinct tribal factions.

“To understand how health reform gets made, one has to understand that health reform is really like Afghanistan,” he explained. “You have the hospital tribe, the physician tribe, the home health care tribe. They all have stations — base camps — and they don’t use AK-47s. They use money.”

To reform the health care system, Reinhardt added, President Obama “threw money at physicians to make the ‘tribal chiefs’ either stay quiet or come on board, not to send insurgents to fight him.”