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Department of Corrections: Michael Gerson vs. the Health Industry

It's also worth noting that Michael Gerson's column contains a pretty significant factual error. He writes:

Obama's grand cost-control announcement -- joined by health industry leaders -- of a 1.5 percentage point reduction in health inflation each year was a shoddy, half-baked, deceptive mess. The (unsubstantiated) saving was really 1.5 percentage points after 10 years, leaving administration officials to backpedal and supposed allies to fume.

I have no idea where he got that. Last week, the health industry leaders released their package (pdf) of specific reforms meant to achieve the promised savings. The first paragraph on the first page says, "we will do our part to achieve your Administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate – saving $2 trillion or more." And the italics, by the way, are in the original document, not added by me. Gerson is simply wrong.

By Ezra Klein  |  June 5, 2009; 10:29 AM ET
Categories:  Health Reform  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: The Republican Dilemma on Health Care
Next: Who's Afraid of the Big Bad Interest Rate?


Michael Gerson told another lie in his peice today. He wrote, "Government health programs of the type Obama seeks to create are not good at cost control (as Medicare has proved)."

This is a clearly lie. Medicare has done a much better job controlling cost than private insurance. A study by the highly respected Lewin group proves this and so does a study by Institute for America's Future. Medicare cost increased by an annual 5.8% while private insurance cost increased by an annual 7.4%. There is no one in the industry who does not think Medicare has done a better job of controlling cost. In fact one of the biggest complaints agains Medicare or a Medicare like public plan is that it pays less for health care services than private insurance companies (i.e. controls cost too much).

Posted by: JonWa | June 5, 2009 11:20 AM | Report abuse

Gerson also fails to mention the Veterans Health Administration, where the patient load increased by 70% between 1999 and 2003, but costs increased by only 41%. The VHA has been successful not only in controlling costs, but also in improving quality, so that it demonstrably delivers some of the best, if not the best, health care in the United States. (h/t Ezra and the excellent article on the VHA by Phillip Longman in the Washington Monthly cited by Ezra yesterday)

Posted by: geoffcgraham | June 5, 2009 11:28 AM | Report abuse

Conservatives are not accountable for the accuracy of their information; they believe that every conservative is entitled to his own facts. Only liberals are not entitled to their own facts; they must adhere to the opinions of conservatives!

Posted by: TomPaine2 | June 5, 2009 7:51 PM | Report abuse

They don't mean they're reducing the inflation.

They mean they're reducing the _rate_ of inflation. By 1-1/2%

If you have a balloon and you reduce the inflation, you let some air out.

If you reduce the _rate_ of inflation you just inflate it slightly less quickly.

Barely, in this case.

Posted by: LoremipsumdolorsitametconsecteturadipiscingelitCraseleifendfermentum | June 6, 2009 1:46 AM | Report abuse

Thank you for reading Gerson's op eds so I don't have to. It's nice that someone tries to keep him honest.

Posted by: Ami_Blue1 | June 6, 2009 1:32 PM | Report abuse

@1:46 a.m.
In the world of economics, inflation is the rate of increase. Reducing the rate of increase _is_ reducing inflation.

Nobody uses the term "inflation" in the sense of a balloon, as you suggest.

The discrepancy here is not over what the claim is, it's whether the claim is valid. Gerson claims, contrary to the evidence, that the claim is without basis.

Posted by: rick_desper | June 7, 2009 4:27 PM | Report abuse

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