It's Health Care Weekend!

This is it, this is The Big One. The House of Representatives will vote to enact or not enact the health care reform package before it. Here at DOTE, the most important issue is that our elected representatives are threatening to DO SOMETHING. But we should not ignore another paramount issue—what exactly are they threatening to do?

First, from a spending point of view, let's review the problem. This graph is from the Congressional Budget Office's (CBO) health page.

Projected Federal Spending Under One (Very Optimistic!) Fiscal Scenario (Percentage of GDP)

The Democrats waited with baited breath for the CBO's report on the cost (savings) of the health care bill, which was released on Thursday. Here are the important results—

• coverage will be extended to another 32 million people
• over the next decade, the reform will cost $940 billion
• the reform will cut the deficit by $138 billion over that same period

Puzzled? How can the bill cost so much but reduce the deficit? The answer is easy. This is a 2nd derivative deal, where we will reduce the increase in the increase—the rate of increase—of health care costs, as Melissa Rodgers, the Associate Director of the Berkeley Center on Health, Economic & Family Security at the UC Berkeley School of Law, explains in this video.

As Melissa says, this "bending the cost curve" is supposed prevent the unsustainable, exponential growth in health care costs we now face as shown in the graph above. And we cover more people, so if it works, this reform seems like a good start on averting future disaster.

Of course, there is some political bullshit we need to deal with here. The Republicans, who vote as One, aren't discriminating because their sole agenda is to make sure the Democrats DON'T ACCOMPLISH ANYTHING PRIOR TO THE 2010 ELECTIONS, regardless of the proposal's virtues or lack thereof. The Democrat's overriding agenda is to MAKE SURE THEY ACCOMPLISH SOMETHING PRIOR TO THE 2010 ELECTIONS. We are not partisan here at Decline of the Empire. Only a few members of Congress actually care about pulling off a seemingly impossible magic trick—helping people and reducing costs.

Here's more bullshit. Democrats are claiming that the bill will reduce health care costs by $1.2 (or $1.3) trillion in the second decade after it is enacted, between 2020 and 2029. Here's what the CBO actually said.

Therefore, we have developed a rough outlook for the decade following the 2010-2019 period [i.e. 2020-2029]. We estimate that the combined effect of enacting those two pieces of legislation would be to reduce federal budget deficits during that following decade relative to those projected under current law—with a total effect that is in a broad range around one-half percent of gross domestic product (GDP). That calculation is very uncertain, and the imprecision of the estimate is intended to reflect that uncertainty.

Well, this savings estimate could mean anything. That GDP variable is wide open! So, that's why you get entirely bogus costs savings estimates for the second decade from the Democrats. And then there is a sticky issue concerning a 21% cut in Medicare reimbursements to doctors.

The office can’t factor in, for instance, political behavior. Right now, the legislation [and the CBO] assumes Congress will go ahead and cut Medicare reimbursements to doctors by 21 percent the way it’s supposed to. But lawmakers keep putting off this cost-saving measure, and everyone knows it’s not going to happen.

The CBO probably knows that, too, but it can’t account for a political probability. It has to work with what’s before it.

So, the cost savings, which are a modest $138 billion between 2010 and 2019, have likely been exaggerated because Congress lacks a backbone. On the other hand, we have been told that more Americans will have health coverage.

So, that describes the trade-off, the bottom line: more Americans get health coverage, but the cost curve is not really affected at all.

We'll know by Monday whether SOMETHING HAPPENED. Of course, most Americans will be watching the NCAA basketball tournament this weekend on CBS. If they know anything about the issue at all, it's what they've been told in wacko-sponsored infomercials telling them The World Will End if health care reform is passed.

Enjoy your Health Care Weekend!

Comments

[Dan]

The Berkeley policy analyst has an axiomatic commitment to logical incrementalism: pass inadequate legislation now to set us on the road to a series of improvements down the road. It's like the conservative version of wedge politics. This process is coming to an end and has in part led us to this denouement of despair.

There's a lot wrong and a little right with this health care legislation, but given our ecological problems, peak oil prime among them at present, and the "Bad Money" problems, the health system -like the entire society as Dave illustrates daily- is unsustainable. The cardinal rule of Obama is that no players in the health racket lose -except the public. He's kept us on the path to collapse with a seamless transition from GWB.