Unbiased Analysis of Today's Healthcare Issues

Obama’s Address to Congress

Written By: Jason Shafrin - Feb• 25•09

While President Obama’s speech to Congress had many components, I’m going to focus on those related to health care.  I will also comment on the Republican response.


I applaud the President for specifically addressing the need for health care reform.

…we can no longer afford to put health care reform on hold. We can’t afford to do it.

Of course, Obama applauded his the health care changes made already (i.e., expanding SCHIP eligibility, and extending COBRA benefits).

The President mentioned the high cost of health care.  Health insurance premiums put a burden on small businesses.  Small businesses have smaller pooling groups and thus have higher average premiums than for large firms.  Further, if one employee gets has a catastrophic illness, this will have a large impact on health insurance costs for small businesses, but not for large.  Obama also mentions that many people file for bankruptcy due to large medical bills.

So what is Obama going to do about it?  Does he claim he can cure cancer?  Actually, yes.

Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives.  It will launch a new effort to conquer a disease that has touched the life of nearly every American, including me, by seeking a cure for cancer in our time…and it makes the largest investment ever in preventive care, because that’s one of the best ways to keep our people healthy and our costs under control.

Let’s look at Obama’s 3 suggestions:

  • EMR:  Electronic medical records (EMR) are of course a good thing.  The question is one of implementation.  If the government establishes one standard for electronic medical records, this will create a unified platform that can be used by all health care providers.   Sharing information across providers is essential.  However, there are privacy issues to be managed whenever a database is centralized.  Further, mandating one EMR standard will hinder the ability of innovators to improve the quality of the EMR.
  • Preventive Care.  Preventive care is generally a good thing, but I do not believe this is an important health reform issue.  First, preventive care will not reduce costs significantly and may even increase costs.  The Congressional Budget Office states that any gains from reducing obesity would be concentrated in the short and intermediate period “because some of the savings will be offset by increased longevity and the cost of disease that are most prevalent during old age.”  Secondly, if individuals are not getting preventive care and it is not saving money, then this does not seem to be a public policy issue.  An exception may be vaccines; however, since poor patients who can not pay for vaccines can get subsidized or free vaccines, the problem is one of education, not of health insurance.
  • Cure Cancer.  This idea will enrage the pro-cancer lobby.

Although President Obama realizes that “we must also address the growing cost in Medicare and Social Security,” he does not address how this will be done.


Gov. Bobby Jindal’s comments related to health reform were the following:

To strengthen our economy, we also need to address the crisis in health care. Republicans believe in a simple principle: No American should have to worry about losing their health care coverage, period. We stand for universal access to affordable health care coverage.

What we oppose is universal government-run health care. Health care decisions should be made by doctors and patients, not by government bureaucrats…if we put aside partisan politics and work together, we can make our system of private medicine affordable and accessible for every one of our citizens.

Gov. Jindal theme was this: the government will help pay for your health insurance premiums, but does not support a single payer plan.  Although Gov. Jindal was vague, the Republican worldview might support a voucher system.  In a voucher system, individuals receive subsidies to buy private health insurance based on their income and illness level.  I believe that Republicans would oppose the creation of a public health insurance plan that could compete with private insurers (see 24 Feb 2009 post).


Like most speeches, the Obama Address and Republican Response were long on rhetoric and short on details.  As all policy wonks know:

“Le bon Dieu est dans le détail” (God is in the details)

Gustave Flaubert

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