Government: Making Health Care Unprofitable Since....

From my Tweets (Timothy Burke, to be exact):

Here is what Ceci Connolly is reporting at the Washington Post:

President intends to release a budget tomorrow that creates a 10-year, $634 billion "reserve fund" to partially pay for a vast expansion of the U.S. health system, an overhaul that many experts project will cost as much as $1 trillion over the next decade.

Obama would pay for the expansion by trimming tax breaks for the wealthy and tightening payments to insurers, hospitals and physicians, according to a senior administration official.

If this report is accurate, a $634 billion fund would pay for roughly half of what a fully comprehensive overhaul of the U.S. health care system would cost. It is also notable that some of the $634 billion is reported to come from cuts to what hospitals, physicians, and insurers presently get. We have been fully expecting a $157 billion cut to what Medicare HMOs get but it would seem the docs and hospitals would be in for some pretty big cuts as well to get to $634 billion in savings.

Full post here. 

The fact that patients are shielded from the true cost of health care - largely due to the tax-free status of health insurance contributions which, in turn, spreads the cost of health care around - is one of the reasons health care costs are high.  So the answer is, obviously, to take the profits* out of health care.  Perhaps Obama wants to turn the whole health care system into a market like the market for flu vaccines.

When government policies yield unintended consequences, the answer is always more government policy.  Sigh.

*I realize that most hospitals are technically not-for-profit.  But that only restricts what they can do with any income residual.  It does not mean that the hospitals can't have profits as a motive.