Memo to Obama: Here’s How to Do Healthcare Stimulus
Obama has asked critics of his stimulus bill to make suggestions about how to improve it. At FDL we’re going to do a number of posts on this topic, starting with health care. (Future posts will include transportation and telecom, at the least.)
The US doesn’t have enough healthcare capacity. If you were to give everyone healthcare right now the system could not handle it. Universal healthcare is something Obama has said he wants to move towards, it is also a priority for Congress. A fair bit of money can be put into circulation relatively fast through healthcare stimulus spending. Obama has started down this road with spending on universal health records. Here’s what else can be done with (very rough) estimates of costs:
1) The VA is underfunded and under pressure with the large numbers of disabled from Afghanistan and Iraq. Toss them 50 billion to upgrade facilities, add new nurses and aides, add out-patient and inpatient programs for Vets coming back disabled, and so on.
2) Close the Medicare part D "doughnut hole", the point at which patients have to pay the full cost of their own medicine. Cost? About 45 billion. Negotiate volume based discounts for drugs and pass that savings on to patients (this will actually save money) and allow Medicare to engage in real negotiation with drug companies.
3) Start up a medical scholarship program. It costs about $140,000 in tuition to get through school. Add in 30K for living expense, add a job-work program where medical students work at VA hospitals and inner city hospitals and so on, and hiring of new faculty, etc… Assume final cost of $200,000 per new doctor before the residency. Cost is about 3 billion for tuition and living support, which is peanuts. In exchange for having full tuition paid, plus living expenses, new doctors will work for 8 years at an approved hospital or clinic – the sort of rural or inner city locations that tend to have trouble getting new doctors. The government spends about 110 billion a year on residents right now, an extra 15K doctors a year would increase that by 82.5 billion/year. New schools will probably need to be built (there isn’t enough capacity right now for all these new doctors), let’s spend 20 billion a year on that. So to begin with you spend the money on doctors up to capacity, the rest of the money on setting up new medical schools. Total Cost is about 105 billion/year.
4) Do the same thing for nurses. Nurses cost less to train, with tuition clocking in at 85k for a split between two and 4 year nurses. Add in living expenses, and clock it in 115k/nurse for tuition and living support. They don’t need residencies, but they do need new schools. You need more nurses than doctors (about 4 times as many), so call increasing the size of nursing schools at 80 billion. Same deal as doctors, in exchange for tuition plus living costs they have to work in one of an approved list of places for a number of years (probably less years than required of doctors, since they cost less to train.) Total cost clocks in at about 87 billion dollars.
5) Long Term Home Health Care. Move towards taking care of as many old folks who need help in their own homes. One of those open ended sorts of things, but 20 billion should show some results.
6) Opt-out for universal health records. Say what? Well, here’s the thing, universal health care records will mean that every illness you’ve ever had, every condition, will be listed. Until insurance companies are forbidden from excluding clients or increasing their premiums for pre-existing conditions, universal health records will hurt a ton of poeple. Cost: 10 billion. Of course, if Obama wants to offer the next possibility:
7) Anyone can buy into the Congressional health care plan, no health exam. Sure, it’ll be ludicrously expensive, since all the sick people will be forced onto it, but as a stop gap until full universal health care is announced it at least gives them somewhere to go. And since the idea is to spend lots of money fast, well, this will do that. Cost: ? 50 billion and up, up, up.
8) Fully funded substance abuse programs. Might even save money by diverting addicts from prison, but clock it in at 10 billion.
There we go, 377 billion dollars. It isn’t all "shovel ready", but most of it can be spent quickly enough, there’s bottomless demand, and it helps to fix a real problem the US has, while preparing America for a transition to universal health care.