Judging the CBO
Doug Elmendorf, director of the CBO, responds to allegations that his organization underestimates savings, and other criticisms. Well worth a read.
Incidentally, it wouldn't be that hard for some nonprofit to go back through, say, the last two decades and compare the CBO's estimates of major bills to their real world impact. Jon Gabel did this for a few pieces of legislation, but doing it systematically would offer a much clearer picture of possible biases in their methods.
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Ezra Klein
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December 8, 2009; 5:16 PM ET
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Posted by: lancediverson | December 8, 2009 5:21 PM | Report abuse
Shouldn't a backwards-look like that be a regular self-audit procedure the CBO undertakes itself? Nobody else should be as motivated to sniff out systemic mistakes as the CBO itself given that they're the only folks who can actually implement improvements if deficiencies are found.
Posted by: DonWhiteside | December 8, 2009 5:58 PM | Report abuse
There are a couple big unknowns here.
On the savings side, CBO can't score the psychological impact on patients and providers of having this big health reform debate. People will be more focused on costs, and I think that alone will produce significant savings, at least temporarily.
My sense is that technology will also produce long-term savings, although a recent study cast some doubt on that.
On the costs side, the easier Medicare savings have already been realized. We dialed back the anything-goes FFS culture of the 70s and early 80s. Now we have to work harder.
Also on the costs side is the financialization of the health industry. Much more than in the past, what happens on Wall Street now has a huge impact on bottom lines throughout the health sector. If the market cools off, people are looking to operating margins to make up the difference and that will increase national healthcare spending.
Posted by: bmull | December 8, 2009 8:14 PM | Report abuse
Why not look at all economic projections, not just the CBO's cost estimates. How about the projections on SS and Medicare?
As I've said mant times, if you did look back, you would conclude that a good shaman with a goat and a sharp knife would do better.
Posted by: lensch | December 9, 2009 2:57 PM | Report abuse
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If the CBO is so conservative in its cost estimates for legislation by constantly underestimating savings, why does the US have a $500M structural budget deficit?