By David Hilzenrath
Congressional budget analysts Tuesday threw a huge dose of cold water on hopes for meaningful health care reform.

In a series of statements, the Congressional Budget Office spelled out just how difficult it will be to reduce the rate of growth of federal spending on health care—and to do so without putting the quality of care at risk.

Here are some of the highlights:

• “[L]arge reductions in spending will not actually be achieved without fundamental changes in the financing and delivery of health care.”

• “At this point, experts do not know exactly how to structure such reforms so as to reduce federal spending on health care significantly in the long run without harming people’s health.”

• “Examples of efficient care certainly exist today . . . . Yet applying the methods of those efficient providers throughout the health care system cannot be accomplished through fiat or good intentions.”

• “Some policies, such as the increased use of preventive services and the coordination of care, would have clearer positive effects on health than on the federal budget.”

• “Other policies, such as certain changes in Medicare’s payment methods, would have a direct impact on federal spending, but their effect on health outcomes would be less clear.”

• “In part, that uncertainty reflects the difficulty in measuring the quality of health care—a situation that is likely to improve but which will take time to do so.”

(Reporter’s note: Some policy wonks believe it's essential to give health care providers an incentive to deliver good care. But if you can’t measure the quality of health care, it’s hard to reward doctors and hospitals for delivering it—and it’s hard to penalize them for failing to do so. )

• “[S]everal rounds of successive and significant changes and refinements in Medicare’s rules would probably be necessary to yield substantial budgetary savings.”

• Members of the health care industry have told President Obama they are committed to improving efficiency and believe there is significant money to be saved. “At the same time, many of the group’s proposals offer little detail about the specific changes necessary to achieve those objectives or the obstacles to making the changes.”

• Though increasing access to preventive care is a popular idea, “One study of health and economic effects of preventive services found that only 20 percent of the services that were assessed yielded net financial savings.”

• For 60 percent of preventive services examined in another study, “the cost of the intervention for the many who might receive it would exceed the likely savings for the relative few who would avoid the disease as a result.”

• Fostering improved public health and reducing chronic diseases can reduce Medicare spending on particular medical problems. “However, the overall budgetary effect also depends on the cost to the government of the policies that reduce risk, other health care costs that are incurred by people who live longer, and the additional Social Security benefits that are paid to people who live longer.”

(Translation: Helping people live longer and healthier lives can make them bigger burdens to the federal government over the long run, partly because they’ll spend more time collecting Medicare and Social Security benefits.)

• “If more people had insurance, then the amount of uncompensated care would decline.” However, “uncompensated care is less significant than many people assume. According to one study, hospitals provided about $35 billion in uncompensated care nationwide in 2008—less than 2 percent of national health expenditures—and the estimates are much smaller for other providers.”

• “Imposing slower growth in [Medicare] payments would create ongoing pressure on providers to identify and adopt efficiencies; it would also, however create risks for providers and patients if the efficiency gains were not achieved.”

• “Without meaningful reforms, the substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it.”

Finally, a reporter’s note:

There's more at stake financially in health care reform than the impact on the federal budget.

President Obama and Congress could save the government money by cutting federal payments to hospitals, as Obama has proposed, but that doesn't necessarily reduce the nation's overall health care spending or the rate of growth in health care costs.

Unless health care providers are able to absorb the government cuts by becoming more efficient, the result could be higher costs for private payers such as health insurers, employers, people with private health coverage, and the uninsured.

The history of health care spending is that if you squeeze it in one place, it tends to bulge in another.

By Paul Volpe  |  June 17, 2009; 10:18 AM ET
Categories:  Cost Estimates , Daily Dose , Health Reform Share This:  E-Mail | Technorati | Del.icio.us | Digg | Stumble Previous: Former Senate Leaders Weigh In on Reform
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