Len M. Nichols testifies before the Senate Budget Committee on “Putting Health Care Spending on a Sustainable Path”
On February 29, 2012 at 10am Len M. Nichols testified before the Senate Budget Committee. He discussed “Putting Health Care Spending on a Sustainable Path”. Click Putting Health Care Spending On a Sustainable Path to read Len M Nichols’ testimony. Below is footage from the testimony.
Thank you, Governor Walker, Governor Kitzhaber, and other distinguished governors on this committee, for the opportunity to share some thoughts with you today and for the record about the sustainability of Medicaid. My name is Len M. Nichols. I am a health economist, a Professor of Health Policy in the College of Health and Human Services, and the Director of the Center for Health Policy Research and Ethics at George Mason University, in Fairfax, Virginia. The thoughts and opinions expressed herein are, of course, mine alone.[i]
Any specific answer given to your very good question, “Is Medicaid Sustainable?” depends upon one’s ideology, beliefs, the facts one accepts as true, and values. For me, on balance, the short answer to the question is “No, but it should be, and our collective job is to make it so.” Medicaid is a lifeline for our most vulnerable fellow Americans, whether young, disabled, or frail and elderly, and both its design and performance say a lot about our empathy and compassion as a people. Medicaid covers almost 60 million people at some point during each year, including one-third of all children, seven
out of ten nursing home residents, eight million low-income individuals with physical and mental disabilities, and nine million low-income Medicare beneficiaries.[ii] Two-thirds of all spending is for the twenty-five percent of beneficiaries who are either disabled or elderly or both. We will deserve to be judged harshly if we do not sustain the program where it is performing well[iii] and rectify the program’s vulnerabilities elsewhere so it can perform better for more people, beneficiaries and taxpayers alike, and become sustainable again. Therefore the task before you as the chief executive of your state is clear: to fix Medicaid, not to abolish or drastically curtail it.
[i] I am grateful to John Holahan, Jenny Kenney, Paul Van de Water, Edwin Park, Judy Solomon, and John Blacksten for very valuable comments and suggestions on an earlier draft, and to Beth Flashner, Ekom Etuk, Suchi Madan, and Melissa Sharpe for timely research assistance. All remaining errors are my sole responsibility.
[ii] Diane Rowland. “Overview of Medicaid and CHIP Payment and Access Commission,” presentation to the Medicaid and CHIP Payment and Access Commission (MACPAC), September 23, 2010. url
[iii] Jenny Kenney. Assessing Access to Dental Care for Children in Medicaid and CHIP,” presentation to the MACPAC, December 9, 2010. url.
“Is Medicaid Sustainable,” National Governors Association, February 27, 2011.
My overall assessment is that the legislation recently passed by the Congress and signed by the President is an imperfect but good start in the direction we need to head, toward making our health system sustainable for all Americans. Frankly, we do not really have a choice. We cannot afford the health system we have built, for even though parts of it are truly outstanding and the envy of the world, we get very low clinical value for our many dollars on average and we exclude too many from care that most of us still take for granted. We are on a path that will force us to either improve our system’s overall quality and efficiency, or else look away as more and more Americans go without care that is expected and widely available to the entire population in every other industrial country in the world.
“An Economic Case for Making Health Reform Work,” North Dakota legislature, Industry. Business and Labor Committee, May 27, 2010.
Commissioner Morales and Other Distinguished Guests, thank you for inviting my testimony today on the urgency of finding policy solutions to our health care cost problems at the local, state and national levels. My name is Len M. Nichols. I am a health economist, a Professor of Health Policy, and the Director of the Center for Health Policy Research and Ethics at George Mason University in Fairfax, Virginia, the southernmost Commonwealth of the United States. I am honored to offer this testimony today, not least because I lived and voted in Massachusetts for eleven years when I began my career teaching in and eventually chairing the Economics Department at Wellesley College. My son was born at the Brigham in 1987, so I have a far deeper connection to Massachusetts than you could possibly know. Massachusetts has always been a beacon to our nation, from before it was a nation right up until and including this morning. Our political leaders are engaged once again in a great national debate about whether to use government’s power to set new rules and incentives so that our health care system could serve all our citizens in an economically sustainable manner, or not. And once again, all eyes are on Massachusetts. You have led the way in implementing law and policy that has reduced the percentage of your population without health insurance to a level the rest of our country envies. Once again you have helped your fellow Americans see what is possible, and in many important ways, the health reform legislation that the Congress will finally vote on in the coming days and weeks is patterned after your own. But just as the fate of national reform hangs in the balance, you have much unfinished business with your policy choices as well. The common issue that vexes Massachusetts’ and national political, business, health system and thought leaders is what to do about health care costs. This issue is perhaps the primary conundrum of the national debate, and of course you already know that if you fail to address it adequately, your own stellar coverage gains will come undone, and your own middle class will find access to high quality care increasingly out of reach, as is the case in the rest of the country. This is and would be a failure of leadership of a very high order. So what is to be done? There is no shortage of advice on this score, and you will hear and read more than your share of the very best kind this week and afterward I am sure. I know how smart and well-informed the people are who live nearby and want to help you make the choices that are best for Massachusetts. My task this morning is to set the context for why you must act, why being paralyzed by a lack of complete certainty, by sowed confusion or by partisan demagoguery is dangerous for Massachusetts and for our country.
“Why Doing Nothing is Not an Option,” Massachusetts Division of Health Care Finance and Policy, March 16, 2010.
Chairman Pryor, Ranking member Wicker and other distinguished members of this committee and subcommittee, thank you for inviting me to offer my thoughts today about how to improve the performance of health service markets. My name is Len M. Nichols. I am a health economist and I direct the Health Policy Program at the New America Foundation, a non-profit, non-partisan public policy research institute based in Washington, D.C., with offices in Sacramento, California. Our program seeks to nurture, advance, and protect an evidence-based conversation about comprehensive health care reform. We remain open minded about the means, but not the goals: all Americans should have access to high quality, affordable health insurance and health care that is delivered within a politically and economically sustainable system. The best way, though not the only way, to accomplish these goals is to ensure reform legislation earns bipartisan support. I am happy to share ideas for your consideration today and hereafter with you, other members of the Committee, and staff.
“Competition in the Healthcare Marketplace” — U.S. Senate Committee on Commerce, Science and Transportation — July 16, 2009.
Insurance markets are a great place to focus on early in your inquiries. We know that having quality health coverage is literally a matter of life and death. The Institute of Medicine (IOM) estimates that over 18,000 Americans die every year because they do not have access to the timely and necessary care that health insurance affords.[i] Many of us in this room take this kind of seemingly routine care for granted, yet I know that securing access to health insurance for all is a moral obligation that many members of this committee share.
“Addressing Insurance Market Reform in National Health Reform,” – U.S. Senate Committee on Health, Education, Labor, and Pensions – March 24, 2009