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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: biotech_bull who wrote (116558)	7/26/2009 12:32:41 AM
From: biotech_bull	Respond to of 542494

A good analysis of the latest salvo between Orszag and Elmendorf from WaPo's Ezra Klein The Congressional Budget Office vs. The White House I'm not sure what it says about me that I'll interrupt my weekend for a new Congressional Budget Office report, but whatever it is, consider it said. The CBO has brought out a new report estimating the impact of the administration's proposed Independent Medicare Advisory Council, which would give an independent body of experts authority over Medicare reforms, and charge them with cutting costs and discovering efficiencies. This is something of an important release. The administration has sold the IMAC as a "gamechanger" on cost control. The CBO doesn't agree. It think that body will save some money, but not much. And for the first time, we're seeing a serious rift open up between the administration and the Congressional Budget Office. The CBO's analysis suggests that the short-term effects of IMAC will be modest. That's to be expected -- it doesn't go into effect until 2015. Over time, the effects could compound, and a strong IMAC proposal could save a lot of money -- "equal to several percent of Medicare spending." Or maybe not. The CBO, at various points in its analysis, says that it's hard to know. It's easy to understand why: The potential savings from IMAC aren't something you can plug into a formula. After all, the point of IMAC is not that it would implement the best ideas we have in 2009, but that it will give a body of experts the ability to implement the best ideas they have in 2022, and 2034, and 2019, and every other year. CBO can't guess at what those ideas will be any more than I can. We don't have the data they'll be using, we don't know the technology they'll be able to employ, and it's impossible to estimate the political climate. May as well ask what the top-rated NBC show will be in 2029. Which makes it a bit strange that the CBO attached any numbers to its long-term predictions at all. The agency is usually quite conservative in its estimates: When faced with an unknown, it generally admits that it doesn't know. In this case, it confronted the unknown and came back with a pretty specific set of predictions, albeit predictions qualified by a lot of caveats. Peter Orszag, the former director of the Congressional Budget Office and the current director of the Office of Management and Budget, seems pretty shocked: As a former CBO director, I can attest that CBO is sometimes accused of a bias toward exaggerating costs and underestimating savings. Unfortunately, parts of today’s analysis from CBO could feed that perception. For example, and without specifying precisely how the various modifications would work, CBO somehow concluded that the council could "eventually achieve annual savings equal to several percent of Medicare spending...[which] would amount to tens of billions of dollars per year after 2019." Such savings are welcome (and rare!), but it is also the case that (for good reason) CBO has restricted itself to qualitative, not quantitative, analyses of long-term effects from legislative proposals. In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped. That paragraph reads a bit like a very angry Data trying to hurt Spock's feelings. But translated out of Budget Wonk-ese, it's about the gravest charge one CBO director can lob at another: It's an accusation that the CBO has released an estimate that's driven by the desires of Congress (in this case, the desire to have seemingly concrete numbers) rather than actual facts. And as someone who is on record defending CBO against those who want more favorable estimates for health-care reform, I think Orszag has this one right: It's just impossible to say what the experts will want to do with Medicare in 2027, and it's similarly hard to know what the president, and Congress will allow them to do. That said, it's worth putting this in some context. In 1994, Alice Rivlin was in Peter Orszag's position: a former CBO director who had left to head the OMB. Robert Reischauer had taken control of the CBO, and he decided that premiums paid to private insurers under the Clinton health-care plan should be considered payments to the government, and thus would have to be accounted for on the budget. This made the price tag of ClintonCare obscenely high and infuriated the administration, Rivlin included. I think Rivlin was right on that one, as I think Orszag is right on this one. But it serves as a reminder that clashes between past and current directors are not uncommon, and that disagreement was far larger and more consequential than this dispute. voices.washingtonpost.com

To: biotech_bull who wrote (116558)	7/26/2009 7:37:38 AM
From: JohnM	Read Replies (1) \| Respond to of 542494

Nice piece. Here's another from Reinhardt. One of the knowledgeable ones in the healthcare field. ------------------------ Uwe Reinhardt: Plain Talk on Health Reform A prominent health economist talks about high prices, medical insurance, and rationing By Bernadine Healy, M.D. Posted July 1, 2009 If there were a Straight Talk Express for health economists, Princeton professor Uwe Reinhardt would be the engineer. Born in Germany and raised in Canada, Professor Reinhardt has personally experienced medical systems in different countries. Over the past 25 years, he has become a critical voice in the debate about reforming America's healthcare system. He spoke with Dr. Bernadine Healy about today's healthcare costs and efforts to overhaul the system. Excerpts: Uwe, you're hard to pigeonhole on health reform. This drives my students nuts. They say, "Are you a Republican or a Democrat?" I say, "Should that matter?" I'm partly libertarian, but I do come out for universal coverage. Why has President Obama made reform so urgent? Obama said what the cost of healthcare did to GM it could do to the nation. This was hyperbolic, of course, but with the GDP down 6 percent in the first quarter and flat economic growth ahead, healthcare can't go marching on as if nothing has happened. It is now 18 percent of the shrinking GDP and projected to be 40 percent by 2050, according to the White House. If the increase gobbles up SUVs and fast foods, that might not be too bad. But if it displaces money to educate children, that's a real trade-off. Human capital is what has made America great. Is it mostly that our prices are too high? A bunch of us wrote a paper a few years ago called "It's the Prices, Stupid." Europe has a lot more physicians and hospitalizations per capita and takes more medicine. But our prices are much, much higher for the same things. The good side is that high prices have allowed incredible innovation because medical technology and delivery systems have been able to slosh around in money. The bad side is that in 10 years, Americans on the bottom half of the income ladder won't be able to afford healthcare. One thing that is really puzzling is that for Medicare patients we spend twice the money in Miami and McCallum, Texas, as we do in San Francisco. This geographic variation has been known for about 25 years, but Congress has never appropriated the research budget to figure out what's really going on. Obviously, if you compare area averages, that's pretty crude science. You really want to go down to the individual level and see if these patients are different. They might be. But you need very good data on individual patients, even social factors and religion. Now the White House is saying that it is going to slam down on these high cost areas, but you don't really know enough yet. Why don't individual healthcare consumers bargain for better prices? My wife, May, called up the Princeton hospital and asked what a normal delivery would cost. She got nowhere. I called about a colonoscopy and got the same runaround. So I asked a guy at New Jersey Blue Cross. He just roared. "Are you serious? We pay 50 prices. We pay every hospital a different price. We pay the same hospital five different prices." I asked, "Are they public? Can I look them up?" The answer was, "No. That's proprietary." Imagine if a bunch of people were blindfolded, shoved into Macy's, and told to shop prudently. For years, I've argued hospitals should post their fees relative to Medicare. I've put it to the White House, the Senate. People look at me: "Are you serious? Transparency?" What about reforming health insurance? The insurance market is chaotic. We need to have one basic, standard package that is respectable. Hairpieces don't have to be covered, but in connection with cancer, I could see why they should be. The Dutch had a national debate whether they should socialize the cost of fertility treatments. Making such choices has always made Americans gun-shy. That does bring up the "R" word. Won't health reform mean rationing hip replacements or end-of-life care? How much could you really save on end-of-life care? For now, we have more than enough inefficiencies not to have to make those harsh decisions. My feeling is our kids will be the ones who have to figure this part out. Our generation did civil rights and women's liberation. Let them do this. They will face millions of baby boomers with zero net worth. I say to my students, "You will have to take care of them somehow. You cannot put them on an ice floe—especially with global warming." health.usnews.com