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Shrink now, expand later Health care reform a test for Congress, must blend affordability and quality

The old saying that "if it's too good to be true, it probably is," should provide reason enough for Congress to be cautious in addressing the varied and costly aspects of President Obama's health care reform demands. His multicategory program has the seeds of unprecedented and staggering medical costs for the nation.

Whether those seeds take root depends on whether Congress, in shaping legislation to reach solid national goals, has the will and the wisdom to tackle the core issue of care cost before simply expanding health coverage.

Nobody in America is denied coverage now. Hospital emergency rooms cannot turn away those in need of care, beyond sending them to other hospitals when their own ERs are full. But that exacerbates the cost problem -- ER care is the most expensive form of health care, and the system can be clogged by the inefficient use of hospitals by the uninsured who can't afford to visit their own physicians.

So the heart of the problem is cost -- and controlling it, rather than simply adding to the demand, is a key both to better care and to reduced premiums that would make health insurance more affordable and thus more widely used. Health care delivery could be enhanced instead of compromised. Reform can't ignore the tens of thousands who are losing care or paying more for it because of escalating costs.

Doing so requires fundamental shifts in the health care system, primarily toward measuring and rewarding success by the quality of care outcomes rather than simply continuing to pay fees for specific health care services. Experiments in that area -- including locally by non-profit Independent Health -- are under way. Congress alone is more than likely to botch any such attempt.

Look at the government's record. Neither Obama's estimate of $900 billion over 10 years for a system that provides universal health care under still-uncertain reforms, the House's $1 trillion estimate nor the Senate's $880 billion estimate inspires confidence.

When Medicaid was first enacted in 1965 Congress estimated that, allowing for inflation, the $3 billion cost for 1966 would grow to $12 billion in 1990. It cost $107 billion in that year, and it costs more than $400 billion now. If the estimates are as wrong now as they were in 1965, the unsustainable cost of the new plan would be $11 trillion.

If that's not a prescription for being careful, what is?

Simply adding the 43.6 million people who aren't currently insured to the 150 million who are -- and covering tens of millions of people with pre-existing medical problems -- would result in a price tag that couldn't compare even to today's high costs. Over the next 10 years, Medicare and Medicaid -- the equally costly state-federal health care program for the poor -- are projected to cost $10 trillion. And with New York passing half of its share of the Medicaid cost on to counties, property taxes would have to skyrocket. Someone will pay for runaway costs; most likely, everyone.

The health care changes the president is asking for will represent huge new expenses -- including major expansions, in such areas as raising the income level at which people would be eligible for Medicaid to push even more costs onto the states, that would drive the price tags still higher. Clearly, the cost of existing health care should be reduced first, before simply expanding an already-unaffordable system.

David Walker, who headed the Government Accountability Office for 10 years before retiring in 2008, said that "if the federal government was a private corporation, its stock would plummet and shareholders would bring in new management and directors." And that was before the White House approach to health care reform.

Reform is needed, because the cost of doing nothing -- which would increase the average family health insurance premium by $1,800 a year, every year -- also is unsustainable. But adding hundreds of billions in cost is the opposite of reform. There is only one way to execute these initiatives with a better chance of doing them right and knowing with more certainty what they would cost: Do them in sequence, not all at once.

In the past, we have called on the president and Congress to address health care reform by finding the savings up front. With Democrats in control of Congress, that doesn't look like it's going to happen.

If the president and Congress would institute and accurately cost-account each program one at a time over a multiyear period, though, there would be a better chance of success -- and they could also gain the confidence of the public, which has made its disapproval of the proposed reform package known clearly at hundreds of town hall meetings with elected representatives.

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