Cost Concerns Raise the Stakes in Health Care Overhaul

Money emerged as the driving force in the health care reform debate this week as two reports raised some stark concerns about funding health care in California, and the nation as a whole.

Stakeholders in California appreciated that Gov. Schwarzenegger's health care overhaul refrained from kicking in new state funds to finance his reform plan, but a report from the state's legislative analyst -- Elizabeth Hill -- said the governor's plan is overly optimistic and could leave the state with $3.2 billion in unanticipated costs, resulting from a decrease in federal funding. Schwarzenegger, however, has said that only $200 million of an anticipated $3.7 billion in new funds for the plan might not be covered by the federal government.

Hill's sober warning, coincidentally, was issued the same day as a CMS report that found U.S. health care spending by 2016 will almost double to $4.1 trillion and account for 20% of every dollar spent.

The release of the reports on Wednesday highlighted a potential stumbling block argument reported in the Los Angeles Times over the weekend: Mark Smith, president of the California HealthCare Foundation, said that any effective health care reform plan must "have some credible evidence that costs will be controlled," adding that evidence of this kind "is the most questionable part of all the plans I've seen so far."

In other health-care-related business this week, California's legislators introduced bills dealing with Medi-Cal reimbursement rates and information for consumers about long-term care facilities.