Will the Economic Meltdown Undermine Interest in Health Care Reform?

This post originally appeared on Health Beat.

Writing on The Health Care Blog, D.C. insider Bob Laszewski puts the chances of health care reform -- at least in the form envisioned by the presidential candidates and ambitious activists -- at about zero in the wake of Wall Street's meltdown. It's easy to see why Laszewski is so pessimistic:

"On top of the $500 billion deficit [that the government faces] in 2009 ... and the cost of the Freddie and Fannie bailout ... the Congress is now being told it must take on a total of almost $1 trillion in government long-term costs to try to turn the financial system around."

That's a problem. McCain claims his reform plan will cost $10 billion; Senator Obama says his will cost $65 billion. Both are no doubt low-ball estimates. Obama's plan, for example, is more likely to cost $86 billion in 2009 and $160 billion in 2013, after it's expanded, according to the Urban Institute. Given these numbers, Laszewski says that the candidates have to "get...real" about how they're "really going to deal with health care reform in the face of all of these challenges."

In an upcoming post, Maggie will dig deeper into just how health care reformers can and should 'get real' in post-meltdown America. But instead of talking about what reformers should do, I want to discuss another important question we have to pose in the upcoming age of austerity: will the public even care about health care reform anymore, now that the economy has gone south?

On September 30, the Partnership to Fight Chronic Disease (PFCD) held a conference call with reporters. On the call were Ken Thorpe, PFCD's Executive Director, and former U.S. Secretary of Health and Human Service Tommy Thompson. Though I've never been a fan of Thompson, he had some interesting things to say.

Thompson opened by laying out the numbers behind U.S. health care expenditures, noting that "16 percent of the [U.S.] gross national product goes into healthcare [every year], and [that proportion is] on its way to 21 percent." He also pointed out that "we're spending $2.4 trillion, on the way to $4.6 trillion, and 75 to 80 percent of that cost is over chronic illnesses" like cardiovascular disease, strokes, cancer, diabetes, and obesity.

While these statistics are hardly new to health care wonks, they're worth reconsidering in light of Congress' bailout plan. Seventy-five percent of $2.4 trillion is $1.8 trillion -- meaning that, annually, chronic diseases cost us almost three times as much as the current bailout bill. The nation's total health care bill is the equivalent of passing a bailout, saving Bear Sterns, nationalizing Fannie and Freddie, and propping up AIG twice every year.

If nothing else, the Wall Street implosion puts the sheer scale of America's health care woes in perspective. As such, Thompson and Thorpe agree that the economic meltdown is a powerful wake-up call to the American public. During the call, Thompson said that he thinks that citizens are "absolutely frustrated with Congress and Washington avoiding problems," and are thus likely to begin demanding action on long-term crises like health care. The need for reform "is hung around the neck of Democrats, Republicans, George Bush and everybody else, and Wall Street," he said, and the American public wants to "find an answer." Thorpe agreed, saying that outrage surrounding the economic crisis has "stirred a bee's nest" of dissatisfaction that will "elevate the interest and desire to do something on healthcare reform in 2009."

In other words, our economic crisis highlights the danger of senseless spending and lays bare the catastrophic danger that comes with ignoring the rumbling of a financial crisis. As Thompson and Thorpe see it, voters are deciding that they're mad as hell -- and health care is another area triggering their wrath.

Dr. David Kibbe of the American Academy of Family Physicians agrees. Also writing on The Health Care Blog, Kibbe argues that Americans' feelings of betrayal over Wall Street's greed will spill over into health care. Kibbe notes: "[A]ny sentient observer of this [economic] trickery on such a massive and systematic scale will start to ask questions about who else among our highest paid and most trusted professionals might be lying to us about the well being we place in their hands.   Who else [besides financiers,] they will ask, is making money off our trust in them? Who else, they will ask, is skimming money off the top of an inflated and ultimately doomed -- because unsustainable -- market for complex services? Where is the next bubble that privatizes profits but socializes risk?"

It's health care, says Kibbe -- a sector where "fifty million people are without health insurance, and at least that many are under insured, while revenues going into the industry continue to increase at double digit rates of increase year after year." Then he asks: "How can this go on much longer?"

Under normal circumstances, the answer might be a good, long time. After all, our health care system has been dysfunctional for decades. But today Americans aren't just disappointed with the way our institutions work -- they're outraged and scared. In a Gallup poll released yesterday, 53 percent of Americans said they felt "angry" about the financial crisis, and 41 percent said they felt "afraid." Americans feel that the system has failed them -- and, as perverse as this might sound, it's that sort of disillusionment with institutions that is needed to fuel changes as far-reaching as health care reform.

Interestingly, the Gallup poll shows that more affluent Americans are the angriest. Sixty-three percent of college graduates say they have felt anger over the recent events in the financial world, compared with 50 percent of non-graduates and only 43 percent of those who have not attended college. Sixty-two percent of respondents in upper-income households with annual incomes of $60,000 or more have been angry, compared with 50 percent of those in lower-income households. This is important: it's always hardest to convince the "haves" that the system is broken, because the system is built to work best for them. But if Americans of higher socioeconomic status begin to acknowledge that an unsustainable system threatens the entire economy, institutional overhaul becomes a much more plausible political proposition.

Granted, all of these numbers refer to the financial crisis and not health care. But the assumption that worries about the economy will fuel outrage over health care isn't as far-fetched as it may sound. Polls show that concerns over the economy and health care do in fact trend together. Check out the graph below, from the Kaiser Family Foundation, which I originally posted back in January to illustrate this very point.

Moreover, public interest in health care is still high: the September 2008 Kaiser Family Foundation election tracking poll puts health care as the number three priority of all voters, and health care remains the second most commonly reported economic hardship (after paying for gas). What will happen when our long-time interest in health care is mixed with a new appreciation for government oversight and regulation, smart spending, and building system that works? Maybe, just maybe, a renewed political will for health care reform.

Admittedly, in post-meltdown America, resources will be limited. It's also true that the sort of done-in-one reform packages that reformers like to trumpet -- cover everybody! Cut costs! Improve quality! -- will probably have to be unpacked into separate initiatives. (This isn't necessarily a bad thing -- as Maggie said last week, "we shouldn't rush into providing health insurance for everyone until we're sure that we're offering Americans health care" anyway).

In the meantime, don't be too quick to assume that Americans have forgotten about health care because the economy has taken a nosedive. It may be that, as people feel increasingly insecure -- and get wise to the danger of governmental inaction -- they will want health care reform now more than ever.

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