Technology with attitude

Where are the promised cost savings?

3

I do not pretend to understand the minute details of the health care overhaul bill that the Senate has been working on for the last few weeks, but the latest news on it is disconcerting to say the least. From my understanding, the main selling points of this legislation was that it would cover more people, they would find ways for it to not add to the federal deficit and it would save the country money over the long term by keeping costs lower that they would be otherwise. The first of these selling points is built in, but while they are still working on a way to pay for the bill, it seems they may have skipped over the part about saving money.

Give it to me straight doc

The Congressional Budget Office director Douglas Elmendorf told a Senate committee yesterday that this legislation would significantly increase federal   costs, and that more revenue would need to be found to make sure it didn’t add to the national debt. Republicans jumped on this, and, perhaps because of this, he later seemed to clarify what he wanted to say by stating, “The point I made earlier this morning is that it raises future federal outlays more than it reduces future federal outlays.”

Is this really big news, or common knowledge being trumpeted because the head of a well regarded institution is telling us what we already know? At first bluster it may seem like big news, it certainly did to me, but when you think about it for a second, it may just be common sense. If the government is going to add millions more people onto government assistance, then of course it will cost more. The real question is whether or not doing so would stop the climb of  health care costs in comparison to how they would climb without such a program.

Washington loves a good catch phrase, and the latest is “bending the cost curve”, in reference to how certain reforms might effect medical cost inflation over time. The Obama administration has been pressuring congress to give the Medicare Payment Advisory Commission, a nonpartisan panel that advises congress, powers not unlike the Federal Reserve Board has over fiscal issues. The idea is to make it so they would set the reimbursements that health care providers get, rather that politicians.

These are the kinds of reforms we will need to see to actually save money in the long run. Unfortunately the administration is getting serious pushback from lawmakers used to weilding their power over this process to bring home the bacon to their constituents. They also are the ones that have to interact with the army of health care lobbyists that are crawling all over Washington right now. They’re going to have to make a choice as to who they’re going to listen to. Are they going to care about our nation’s long term solvency, or how much money they’re going to get from health care exectives in their district next year?

Stay tuned to find out…