Reforms in Health Care, Entitlements Seen as Crucial

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Four prominent experts agreed Monday that two complex and interrelated tasks are essential to the nation’s future prosperity: curbing the growth in health care costs and reforming federal entitlement programs.

The speakers were William Frist, a doctor and former U.S. Senate majority leader (R-Tenn.); Donna Shalala,  former U.S. secretary of health and human services; John B. Taylor, former U.S. under secretary of the Treasury for international affairs, and Alice Rivlin, former director of the White House Office of Management and Budget.
They spoke at the fourth public forum presented by Strengthening of America – Our Children’s Future, a bipartisan initiative by former members of Congress and a number of organizations concerned about the federal debt and related issues.

In the first panel discussion Monday, Shalala and Frist agreed that substantial changes were needed in the delivery of health care not only to save money but to improve the quality of care.  Both, however, said caution was in order.

“More than anything, I do believe the health care system needs to be reformed,” Shalala said. But she noted that many Americans remain skeptical of reform proposals discussed in Washington. She also warned against “front-loaded, excessively large, poorly designed” proposals that could hurt the economy as well as patients.

Frist said Washington policymakers often lacked understanding of key health care issues, and added that reform efforts should rely heavily on health care professionals rather than federal bureaucracy. He said incentives in the health care system should be better aligned with results, and he stressed the need to encourage research and innovation.

In the second part of the program Monday, Taylor focused on federal spending trends and emphasized the damage that he believes high federal debt is already inflicting on the American economy. He said various fiscal reform plans, including his own, called only for “a very gradual decline” in federal spending as a percentage of GDP. There is general agreement, he said, on the need to contain health care spending so that it does not grow much faster than the overall economy. The disagreements, he added, were simply over how to do that.

Rivlin said many economists agree on a number of points about the federal budget, including the key roles that an aging population and health care costs play in driving future spending. She said simply cutting back on the size of government enough to accommodate the country’s huge demographic shift, however, would “risk reducing the investments in education and science and infrastructure that we need for growth.” She called for the country to act soon to put Social Security on a “firm foundation” and suggested giving people a choice on Medicare between the current system and another option such as the “premium support” model.

The program Monday was convened by former Senators Pete Domenici (R-N.M.) and Sam Nunn (D-Ga.), a co-chairman of The Concord Coalition. Former Rep. Bill Frenzel (R-Minn.) and former senators Evan Bayh (D-Ind.), Bill Brock (R-Tenn.) and Byron Dorgan (D-N.D.) questioned and responded to the panelists.  

External links:
Strengthening of America — Our Children’s Future
As the Population Ages, Social Security’s Spending Is Projected to Outpace Its Tax Revenues (CBO)

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