McCain’s Health-Care Divergence


By: Wall Street Journal

Plan Focuses on Rising Costs, Not on Getting More People Covered
By LAURA MECKLER
October 11, 2007

WASHINGTON — Sen. John McCain will unveil a health-care plan today, but unlike his rivals he will focus on controlling costs, rather than reducing the ranks of the uninsured.

• The Plan: Republican presidential candidate Sen. John McCain is proposing a plan aimed at slowing health-care spending.
• The Rivals: Rudy Giuliani and Mitt Romney have already presented health plans, but they focus on covering the uninsured.
• The Strategy: Voters see the rising cost of health care as a top concern. Mr. McCain hopes he will be seen as proposing bold solutions.

While the debate among the presidential candidates so far has focused on how to cover more people, Mr. McCain’s strategy of attacking spiraling costs could provide a compelling argument for voters. The high cost of care affects all voters, the majority of whom have health insurance but may be frustrated with rising premiums, co-payments and other out-of-pocket costs.

The McCain plan, as described by senior advisers, includes some ideas on how to cover some of the 47 million people without health insurance. But his main message when he unveils the plan in Iowa will be that the rising number of people without insurance is a symptom of the larger problem of rising costs.

“I think we in Washington have an absolute requirement to bring health-care costs down,” Mr. McCain (R., Ariz.) said this week at the Republican presidential debate in Michigan.

Polls suggest that health care is the No. 2 issue for voters after the war in Iraq. Asked what particular health issue the presidential candidates should address, voters give roughly equal weight to costs and covering the uninsured as their main concerns.

Among Republican voters, however, costs emerge on top. Half of Republicans said they would like to see candidates focus most on reducing health-care costs, compared with 16% who express most interest in covering the uninsured, according to an August tracking poll by the nonprofit Kaiser Family Foundation.

Sen. McCain, who hasn’t taken a leadership role on health in the past, has compiled a collection of cost-cutting ideas, many of which are supported by Democrats as well. His proposals include promoting generic drugs and biologics, supporting retail walk-in clinics at unconventional locations such as Wal-Mart Stores, and shifting some care to nurse practitioners because they are cheaper than doctors. The plan will also espouse setting national standards for measuring treatments and outcomes, and allowing doctors to practice medicine across state lines.

Mr. McCain would also use Medicare as a “lever” for pushing change in the rest of the health system by increasing payments, for instance, to better coordinate care, and cutting payments because of preventable errors and unnecessary hospitalizations.

His advisers acknowledged that some of these ideas won’t be politically popular, but said Mr. McCain is eager to take on the opposition. Doctors and hospitals are likely to object to some of these proposals, though they are all within the mainstream of Republican thinking on health.

“There’s been too much focus on the uninsured, not that it’s not important,” said Gail Wilensky, a health-policy expert at Project Hope, a nonprofit that focuses on medical issues, who has informally advised other Republican campaigns. “If there is a crisis, to my mind it is much more the unsustainable spending.”

Consensus is growing among academics that continued growth of health-care spending is unsustainable and that the U.S. must do something to bring costs under control. The U.S. government estimates health spending at 16% of the gross domestic product in 2006 and projects it to rise to 20% of total U.S. spending by 2015. The result could be that more small and medium-size businesses drop coverage for their employees.

The impact of increased spending on the federal government is also expected to be acute. Under current trends, the Congressional Budget Office projects that by 2050, spending on Medicare and Medicaid alone will eat up nearly one in four federal dollars. Any effort to subsidize health coverage for the uninsured would quickly be overwhelmed if health costs escalate faster than the government subsidies.

Nearly every major presidential candidate has said he or she would address the issue of costs, though some — mostly Democrats — have provided far more detail. In general, candidates have steered clear of making dramatic proposals to curb spending that could upset voters, such as limiting use of technology, cutting payments to doctors and hospitals, or covering fewer treatments.

Sen. McCain’s rivals for the Republican nomination have varied in the degree of detail they have offered on their proposed health plans. Former Massachusetts Gov. Mitt Romney unveiled a plan that included some of the same ideas for controlling costs, though he emphasized his plans for covering the uninsured, including changes in the tax code and state regulations. Former New York City Mayor Rudy Giuliani put out a plan with few details on cost control. Former Tennessee Sen. Fred Thompson hasn’t yet put out a health-care plan.

“While everybody is worried about the problem [of rising costs] in the abstract, the cures can look very threatening,” said Robert Blendon, an expert on health policy and public opinion at the Harvard School of Public Health. “People have not found a politically acceptable way to deal with the problem.”

Aides said Mr. McCain would allow drugs to be imported back from Canada, where government price controls have driven down the cost of brand-name drugs. He would support tort reform that would give doctors who follow national guidelines on care protection from lawsuits. He would use the bully pulpit to promote disease prevention, healthy diets and exercise.

Sen. McCain also plans to propose ideas for covering more of the uninsured. He would give all Americans a refundable tax credit to help them buy insurance, totaling $2,500 per person or $5,000 per family. They would get the tax credit whether they were to get insurance through work or buy it on their own. The existing tax break for employer-sponsored insurance would be eliminated, taking a step away from the work-based model in place for the last half century and toward an individual market.

President Bush proposed a similar idea, which went nowhere in the Democratic Congress. Other Republican presidential candidates have also backed such a proposal, as has Sen. Hillary Rodham Clinton(D., N.Y.), who has a considerably scaled-back version of this in her plan.

Mr. McCain would also allow people to buy insurance across state lines, a policy that could help someone in a state with many mandated benefits that increase the cost of insurance. And the senator would offer grants to states to defray the cost of providing insurance for people with medical problems who can’t afford their own coverage

Aides didn’t provide a cost estimate.

Write to Laura Meckler at laura.meckler@wsj.com

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