Despite all the talk about “bending the cost curve,” President Obama and Harry Reid have declared all-out war on cost control. They are in the process of doing everything they can to kill Byron Dorgan’s bipartisan drug re-importation amendment. They have delayed the vote on his amendment for days (effectively filibustering their own bill), had Lautenberg create an 11th hour poison pill amendment to gut Dorgan’s amendment (which has a safety trigger–see, this is how triggers are used in Washington to kill good ideas), and may try to bring final cloture on the bill to stop a vote from ever taking place on the amendment. Obama and Reid are doing all this to kill one of the only honest cost control ideas so far that has a real chance of becoming law, and one of the only reform proposals I have yet seen that will help the majority of Americans reduce their health care bills.
Dorgan’s amendment would allow Americans to buy the exact same prescription drugs at cheaper prices from Canada or Europe. Americans pay considerably more for pharmaceuticals than other countries because our government refuses to collectively negotiate lower drug prices on our behalf. Basically, every other industrialized nation does it, and that is why their citizens pay less. While Dorgan’s amendment is a byzantine end run around this core problem, it at least has the bipartisan votes it needs to become law. The CBO projects reimportation will save American consumers $100 billion over the next decade. I think the CBO greatly underestimates the potential savings, which could easily be four or five times as much.
This is how cost control is really done. This is economics 101. “Bending the cost curve” will not be truly accomplished with minor tweaks to payment bundling formulas or taxing people’s health insurance benefits in hope of some bank shot, “starve the beast,” cost control magic. You bring down prices by using a large group of people to collectively negotiate for the best price possible. If our government would stand up to the drug makers and collectively bargain on our behalf, it could save us close to a trillion bucks. You reduce cost by allowing people to shop around for the best value.
What is sickening is that Obama campaigned on this rather small, common sense cost controlling idea. Yet Obama traded away drug re-importation to PhRMA in a sweetheart deal. He also traded away direct drug price negotiation in the same deal. Obama and Reid have clearly taken the side of protecting corporate profits instead of bringing down health care costs for regular Americans. I shutter to think of all the other good cost control ideas Obama and Reid were able to more quietly kill as part of some secret industry deal that we still don’t know about. Next time they send Peter Orzsag to pimp all the awesome “bending the cost curve” ideas in the bill, the appropriate response from reporters is to laugh in his face. For the past few days, Obama and Reid have rather publicly fought against bringing down America’s health care costs.