CBO’s numbers

Posted on March 19th, 2010 by ecthompson md

I’m not an economist, I don’t play one on TV and I didn’t stay at a Holiday Inn Express last night. I do know that these guys are smart. They are economists and non-partisan.

From Ezra:

My colleague Neil Irwin has a very good piece on the difficulty the Congressional Budget Office has predicting the cost of something complex like the health-care reform bill. But because his piece is coming in the context of a coordinated conservative effort to discredit the CBO’s analysis of the health-care reform bill, it’s worth making a couple of points.

First, be very careful with any criticism of CBO that seems to be merited by a particular score rather than a particular methodological difficulty. To put that slightly differently, does anyone think that conservatives would be squawking if CBO had disappointed Democrats by saying the bill would save less money than either the House or Senate incarnations? If not, then keep in mind that this is a political, not technical, dispute. To establish my own credentials on this, here’s thepost I wrote defending the CBO when liberals were arguing that it was underestimating health-care reform’s savings.

Second, don’t confuse uncertainty with bias. It’s true that the CBO’s estimates of the health-care reform bill are uncertain. But that cuts both ways. A lot of very respected health-care economists and experts think the CBO is being way too conservative in how much the bill’s payment reforms will save. Historically, CBO has frequently underestimated the savings from health-care reform legislation. To use one example, they heavily overestimated the cost of the Medicare Prescription Drug Benefit. More examples here.

Third, some argue that the problem with CBO’s estimates is that they can’t control for Congress. The actual evidence shows that Congress ismuch better at sticking to tough cost controls than people give them credit for. But beyond that, if Congress can’t do hard things, then everyone is screwed. Conservatives, who strongly believe in entitlement reform, are perhaps in the worst shape as that’s the hardest thing to do. Moreover, the health-care bill has the Medicare Commission, which explicitly makes it easier to do hard things because it takes some of the power away from Congress and gives it to independent experts. If you think Congress is the problem here, then this bill is the best answer anyone has yet come up with. (more…)

Tags: Economy, Healthcare // 2 Comments »

  • Joe White

    America’s population is graying. Boomers are getting old and retiring.

    And old people cost more to keep healthy and to care for when they are sick than younger folks.

    That’s just the facts.

    Therefore, anyone who thinks health care is gonna cost less under ANY scenario is probably kidding themselves and others.

    The MOST important question is not: How do we get cheap care?

    The question is: How do we get the best care?

    Is it by narrowing choices, or broadening them?

    ————-

    Not that cost isn’t important because it is.

    If you want to talk about costs, there are important questions to ask. How can we get the most for a dollar? Is it by putting a system together where everybody thinks it’s ‘free’ and therefore pays no attention to how often they use it or for what reason?

    Will allowing people to enroll for health insurance after they are ill and have big bills due immediately tend to increase or decrease costs? (what would happen to the auto insurance industry if you could sign up for auto insurance and force the insurance company to pay for the car you wrecked the day before signing up?)

  • http://www.whereistheoutrage.net ecthompson

    Joe –

    Thanks for your comment.

    If you allow people to have adequate coverage for them to have the freedom to choose their own doctor, how are we limiting their options.

    As far as your thoughts on everyone thinks healthcare is free, Can we look at healthcare utilization in England, France or Canada? We see there’s no increase in utilization. But, one of the things that we do need to see, is increase utilization here in the United States. We need to see patients with chronic diseases following up with their primary care physicians on an increase basis. If those primary care physicians are adhering to national standards/guidelines then the cost of caring for those patients will decrease and the health of those patients will increase. This is what we want.

    I’m not sure what point you’re trying to make with your last paragraph. On one hand you’re complaining about allowing people to enter the healthcare system after an illness on the other hand you’re complaining about mandating this insurance for everybody. You can’t have it both ways.

« »