In an address that barely mentions health care, President Obama hits on the message heard repeatedly from the health care industry: If you want more jobs, don’t cut off federal funding.
Obama implores Congress not to “gut” investments in research, so American can maintain its spot as a world leader in medical innovation. That line will earn applause from the pharmaceutical and medical device industries, but it won’t be enough to deliver a health care economy that delivers a “fair shot” to everyone.
The president held out the continued possibility of saving health care costs with Medicare reform. "As I told the speaker this summer, I’m prepared to make more reforms that rein in the long term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors," Obama said. "But in return, we need to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes. Tax reform should follow the 'Buffett Rule': If you make more than $1 million a year, you should not pay less than 30 percent in taxes."
And he rebutted Republican accusations that his signature 2010 health reform law amounts to socialized medicine. "I’m a Democrat. But I believe what Republican Abraham Lincoln believed: That government should do for people only what they cannot do better by themselves, and no more," he said. "That’s why our health care law relies on a reformed private market, not a government program."
Obama makes it clear that he sees the giant health care sector as a place ripe for jobs growth. The American Association of Medical Colleges projects a shortage of 90,000 doctors over the next 10 years. It’s more than double that for the nursing industry, where the American Nursing Association sees a potential shortage of 260,000 nurses by 2025. These shortfalls will only be worsened as an additional 30 million people get health insurance under the 2010 health reform law.
But a national workforce commission established under the health care law has been chronically underfunded by Congress. The training programs that will be needed to fix these shortages have a slim to little chance of getting any funds. Appropriators have no room to give precious federal dollars to new programs while they are slashing old sacred cows in the austere spending environment that has reigned on Capitol Hill since Republicans took the House in 2011.
And while investments in research are nice, what medical device companies want even more is for Congress to take back a $20 billion tax it imposed on the industry to help cover the cost of the health reform law. Stephen Ubl, president of Advamed, a medical device lobbying association, says the tax is already causing layoffs.
Obama doesn’t get a break from hospitals either. The American Hospital Association says a coming 2 percent cut to Medicare and other cuts will cost them 278,000 jobs as revenue drops from Medicare and Medicaid. In the health care world, federal funds are the spigot for job creation, and no State of the Union speech is going to change the spending environment on Capitol Hill.