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Where's the Health-Care Revolution?

This year's presidential candidates have spent a lot of time talking about health-care affordability, but not much time discussing how to curb health-care spending.
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Bernie Sanders and Hillary Clinton debate during the Univision News and Washington Post Democratic Presidential Primary Debate at on March 9, 2016, in Miami, Florida. (Photo: Joe Raedle/Getty Images)

Bernie Sanders and Hillary Clinton debate during the Univision News and Washington Post Democratic Presidential Primary Debate at on March 9, 2016, in Miami, Florida. (Photo: Joe Raedle/Getty Images)

Last week, Donald Trump finally released his optimistically titled "Healthcare Reform to Make America Great Again" health care reform plan, fleshing out a promise he made earlier in the campaign to replace Obamacare with "something terrific."

Trump's plan calls for a repeal of the Affordable Care Act, the elimination of the individual mandate, and the implementation of a number of free-market reforms. Under Trump's plan, people would be permitted to purchase health insurance across state lines, health insurance premiums would be tax-deductible, Health Savings Account contributions would be tax-advantaged, health-care providers would have to be more transparent about pricing, and Medicaid would become a state-administered program funded by a block grant from the federal government. Trump's campaign claims that the reforms would "broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans." The plan, which relies on standard conservative doctrine, highlights the chasm between the two parties' attitudes toward health-care reform.

The issue of health-care affordability has dominated this election cycle. As I've written before, the Republican candidates have devoted significant amounts of time and energy to denouncing the "job-killing" ACA and calling for its repeal. Meanwhile, Hillary Clinton and Bernie Sanders are slugging it out over whether the United States should expand Obamacare or embrace the kind of single-payer system many European countries rely on. There's a reason the candidates can't stop talking about health care—voters care about the issue. According to a poll from the Kaiser Family Foundation, 64 percent of voters said that "the cost of health care, health insurance, and prescription drugs" was a "very important" issue in the campaign (although less than 10 percent said health-care issues would be the most important factor in their vote).

But for all the rhetoric on the issue, and for all the talk of the "revolutionary" candidacies of Trump and Sanders, the debate around health-care affordability in this election has been the opposite of revolutionary, and has, in fact, largely bypassed the sticky, but crucial, question of how to curb health-care spending. With the exception of occasional vague references to improving health-care value and efficiency, the presidential contenders on both sides of the aisle aren't really talking about how to meaningfully reduce health-care spending in this country—they're debating who should foot the bill for health insurance.

The presidential contenders on both sides of the aisle aren't really talking about how to meaningfully reduce health-care spending in this country.

The ACA subsidized and reduced the cost of health insurance (thereby increasing access to health care) for low-income families by imposing taxes and costs on businesses and wealthier individuals. Clinton's plan would extend that redistributive effort by providing additional tax credits and capping out-of-pocket costs, while the reforms proposed by Trump, Marco Rubio, Ted Cruz, and John Kasich, which all call for a repeal of the ACA and the institution of the same type of free-market reforms that comprise Trump's plan, would shift many of those costs back to lower-income Americans. Sanders' single-payer plan, meanwhile, would raise taxes on pretty much everyone, but more so on wealthy Americans, to provide health insurance and health care to everyone.

There are elements in many of these plans that might produce small reductions in health-care spending. Increasing price transparency might encourage patients to shop around more, although it's far from a cure-all and would have limited effects on overall spending. Any reforms that increase access to primary and preventive care might reduce overall spending—it's both cheaper to prevent a diabetic crisis with good primary care than it is to treat such a crisis in the intensive care unit; and to carefully manage a child's respiratory virus at the pediatrician's office than with a middle-of-the-night ambulance ride and emergency room visit. And anything that increases the government's bargaining power with medical providers and drug companies—either a single-payer system or an expansion of government plans like Medicare or Medicaid—has the potential to reduce health-care spending.

To truly increase the affordability of health insurance in the U.S., we would need to tackle this country's runaway health-care spending. "The financing arrangements that emerged in the U.S. had two complementary effects: They created incentives for high-cost specialized care and protected much of the public from the full, direct cost of that system," Paul Starr, a Pulitzer Prize-winning journalist who has written two books on the American health-care system, wrote in the American Prospect. "As a result, starting from 4 percent of GDP, health care grew to 17.5 percent, far more than in any other country."

With the possible exception of Kasich, whose health-care plan calls for a transition to episode-based payments, none of the candidates in this election have a plan that addresses either of these effects. As numerous economists and pundits have pointed out, Sanders' plan to provide unlimited, unrationed health care to all Americans without any cost-sharing whatsoever would be tremendously expensive and would likely increase total spending. Trump's plan is light on details, but he too seems to be promising Americans that it's possible to deliver broad, affordable care to everyone without raising taxes and without the "runaway costs," "greater rationing of care," and "higher premiums" he claims have occurred under the ACA. Even Clinton, whose plan builds on the ACA, plans to eliminate the "Cadillac tax" on high-cost health plans, a measure that was specifically meant to help curb spending, and impose limits on deductibles and co-pays, which are politically unpopular but are also one of the few incentives in our system that encourages patients to self-regulate spending.

The ACA took small steps to "bend the cost curve," and there's some (much-debated) evidence that it has managed to slow the growth in health-care spending in this country. But when it comes to health care, Americans believe that more is better. We want all the tests, all the doctors, all the consultations with high-priced specialists, and all the name-brand drugs, even when the best available evidence indicates we don't need them. A truly revolutionary candidate would be talking about both changing the way we compensate doctors—fee-for-service is still the dominant model, despite efforts to shift to a less distorted system—and about the fact that we will never dramatically curtail spending in this country without the kind of reasonable, cool-headed rationing that other countries rely on.