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War of the Wonks

The highly respected Institute of Medicine is preparing a direct challenge to the estimates of the highly respected Congressional Budget Office. Bloomberg's Tim Mullaney reports:

The U.S. can cut health-care spending by $250 billion a year within a decade, a congressionally chartered panel will say this month in a bid to show costs can be contained even if all Americans are insured.

A report from the Institute of Medicine, which advises the federal government on health care, will counter “stingy” estimates from the Congressional Budget Office, said Arnold Milstein, planning chairman of the institute’s working group on health costs. The panel’s annual figure is five times the amount the budget office says the U.S. will save under a bill in the House of Representatives, according to the budget office’s July 17 letter to House Ways and Means Committee chairman Charles Rangel.

A preliminary version of the report will be released Sept. 20. I'm still a bit confused on the precise constituency for this kind of thing -- most of the politicians lambasting health-care reform today voted for the similarly-pricey Medicare Prescription Drug Benefit under Bush, and funded it on the deficit -- but I guess it can't hurt.

By Ezra Klein  |  September 15, 2009; 11:30 AM ET
Categories:  Health Economics  
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Comments

Before fully jumping on board the Institute of Medicine's suggestions, it might be helpful to read some of its past suggestions. I certainly don't intend to condemn its work; however, some past statements (particularly in the mid/late-1970's) have proven less than responsible.

In this instance, I worry that some of the suggestions might be overly embraced: there are risks to making cost-cutting the prime focus of health care legislation. As I've noted before, cost-cutting became a focus of T. Roosevelt's original health care reform efforts... with popular, yet devastating, consequences.

Posted by: rmgregory | September 15, 2009 11:56 AM | Report abuse

most of the politicians lambasting health-care reform today voted for the similarly-pricey Medicare Prescription Drug Benefit under Bush, and funded it on the deficit -- but I guess it can't hurt.

You're kidding, right? FOX supported the Part D boondoggle. That's all it takes.

Posted by: eRobin1 | September 15, 2009 11:57 AM | Report abuse

"most of the politicians lambasting health-care reform today voted for the similarly-pricey Medicare Prescription Drug Benefit under Bush, and funded it on the deficit"

Which is why nobody should make the mistake of assuming that the intentions of certain politicians are genuine.

As for cost cutting suggestions, as always one should be concerned that these will do nothing to make the delivery and administration of healthcare more efficient, and will merely pass the cuts on to consumers.

Posted by: slantedview | September 15, 2009 12:31 PM | Report abuse

Yeah, I'm guessing it follows the recent suggestions (http://content.healthaffairs.org/cgi/content/short/hlthaff.28.5.w978) to fold epidemiological data into CBO estimates; i.e., if there are demonstrably more obese people today, and obese people demonstrably develop diabetes at a predictable percentage, can't the cost-saving estimates factor in that statistically provable rise in diabetics?

Posted by: ThomasEN | September 15, 2009 12:42 PM | Report abuse

The CBO itself oddly edited its own letter of July 17th on the potential cost-savings, or putative lack thereof, of preventive care. The editing was so off-balance, and a couple of odd summary sentences unsupported, that it effectively presents the opposite conclusion one should draw if one very carefully examines the full letter and its main reference review article on preventive care costs (reading both took less than 45 minutes and was enlightening.)

My analysis and summary here:

http://findingourdream.blogspot.com/2009/08/curious-case-of-misleading-cbo-letter.html

Posted by: HalHorvath | September 15, 2009 1:17 PM | Report abuse

All of these estimates are bound to be wildly off the mark. There are too many variables. If the government wants to know how much it will have to pay in 10 years, it should just spell out in the legislation how much and that's that.

Posted by: bmull | September 15, 2009 2:03 PM | Report abuse

Congress would not dare enact Medicare D today and fund it on the deficit. Both the national debt and budget deficit are far higher than in 2003, and the political climate completely different.

Posted by: VirginiaIndependent | September 15, 2009 4:55 PM | Report abuse

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