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The Other Obamacare

David Gratzer
Washington Examiner
May 19, 2010

Though the president signed his trillion-dollar bill into law, health-care reform, which dominated political debate in 2009, will likely be the main campaign issue of 2010, with Democrats touting the plan and Republicans calling for repeal. Here's the irony: Neither hyper-partisan prescription will reign in health costs—arguably the most important issue in health reform.

Where, then, to look for an alternative?

Not across the aisle but across the White House: to the East Wing. Michelle Obama's health-care plan costs hundreds of millions but focuses on bettering our health by reducing childhood obesity. Her final report, issued yesterday, isn't perfect, but its recommendations are an important start to meaningfully trimming future health-care expenses.

In February, the First Lady launched her Let's Move campaign, an initiative to dramatically reduce childhood obesity within a generation. Michelle ObamaCare has great potential since obesity is a known risk factor for heart disease, diabetes, and even some cancers.

Certainly, rising rates of obesity affect the health of our children—one in three are now obese or overweight, potentially dooming today's toddlers to decades of adult illness. But obesity is more than simply a matter of health.

It's also a fiscal issue, since obesity is a leading cause of health inflation in America (in one study, obesity is estimated to drive 47 percent of the per capita increase in Medicaid spending). It's even a defense issue, since a record number of volunteers for Iraq and Afghanistan have been disqualified by poor physical conditioning.

The First Lady has focused on some reasonable ideas: better food in schools, more physical education, and better access to nutritious foods in poor neighborhoods. Asked about the role of the federal government in fighting childhood obesity, the First Lady is clear: It's a "minor player in a very big approach."

The First Lady's approach is refreshing. Considering the high prevalence of diabetes and hypertension (diseases caused for many by obesity), the New England Healthcare Institute noted in a 2007 paper that Boston has "lots of health care, not enough health." That paradox is national. American health care has a health-care demand problem, not a sick-care supply problem.

Yet the nearly 3,000-page bill signed by the president does little to fight unhealthy choices. On the contrary: ObamaCare increases the supply of sick care without attacking demand, just as Governor Mitt Romney's plan in Massachusetts did. And the result across America—as in Massachusetts—will be higher costs for employers, insurers, and taxpayers, without healthier outcomes.

Perversely, expanding insurance coverage without improving wellness could accelerate the damage, since existing insurance models subsidize unhealthy choices.

Congress has spent a year bickering over the micromanagement of insurance markets and Medicare prescriptions. Meanwhile, simply persuading the heaviest Americans to cut their caloric intake and walk regularly would save more money than ObamaCare ever could.

Some criticize Let's Move's price tag, largely budgeted to address inner-city "food deserts." But it's tough to question Mrs. Obama for spending $400 million on farmers' markets when Washington enacts a trillion-dollar plan for a more costly, more complex version of the status quo.

Besides, the criticism is economically backwards. Washington already spends about $20 billion annually to subsidize unhealthy food choices through agricultural subsidies.

The First Lady could strengthen her initiative with other ideas:

- Let's stop paying for junk food. Our school cafeterias are stocked with unhealthy foods. And, through Washington-funded lunch programs, the federal government subsidizes this, literally throwing dollars at poor kids to eat chips and soda. We don't need to simply rethink such programs, we need to make them more accountable by turning them over to the states, thereby bringing them closer to parents.

- Let's encourage employees to be healthier. The good news: many large corporations have already begun innovating with wellness programs. At Safeway, employees are rewarded for making good health decisions and health costs have remained flat at that company for four years. Yet non-self-insured employers can't charge different premiums for different employees—forcing them to spread the cost of unhealthy decisions onto healthy people. The president's reforms would allow some premium variations among employees, but Washington should be more flexible.

- Let's stop rewarding reckless behavior. While no one would want to hold the welfare mother responsible for her genetic predisposition to cancer, good and bad choices should have consequences. But government-funded health-care programs make it possible for unhealthy people to pass the costs of their smoking and diet choices onto others. Medicaid should provide incentives for healthy behavior.

For a year, Washington focused on health care, rather than health. Mrs. Obama has the better approach. Someone should tell her husband.

Dr. David Gratzer, a physician, is a senior fellow at the Manhattan Institute.

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