Friday, November 14, 2008

To the Congressional Budget Office: Please Keep Playing it Straight!

I guess this is an open letter to CBO Director Peter Orszag and his colleagues at the Congressional Budget Office (CBO).

I have great respect for the CBO and that has been the case under different majorities--Democratic and Republican. Never more than now.

The CBO is intended to be non-partisan and objective. They provide the information and estimates the Congress needs to complete the budget process.

When it comes to health reform legislation their job is to "score" the proposals. That means on proposed legislation--big and small--they are the official estimate on what it would cost or what its provisions are estimated to save.

How much will Barack Obama's health plan cost? Will it really save $2,500 per person?

The CBO calls it and their estimate is the official one the Congress would have to use. That is particularly important if the Democrats keep their word and follow PayGo rules that require either spending or tax offsets for any new programs.

If the Congress decides to "equalize" private Medicare payments with the traditional Medicare plan's costs, will the course taken in fact result in equalization?

Will any changes to the Medicare physician payment schedule in fact save the money its proponents claim? Will any new "pay-for-performance" initiatives actually save physician Medicare money?

Will any assumptions regarding savings from "waste, fraud, and abuse," like those made in the recent Baucus Health Plan, really materialize?

Will new information technology, wellness, disease management, and the like cost containment, initiatives really achieve the savings claimed?

My sense is that most of these health reform savings claims, like President-Elect Obama's claim he can save $2,500 a person with his health reform plan, are way too optimistic.

MedPAC has already said that eliminating past and future Sustainable Growth Rate Formula cuts to the Medicare physician payments would cost $200 billion over 10 years.

It looks to me like the nebulous "pay-for-performance" initiatives often proposed as part of Medicare physician payment reform are too often ways of avoiding the really heavy lifting that has to be done to fix that doc payment system. Since no one seems to agree on what quality is and a way to measure it I don't have a lot of faith there are big fixes here. If all of the docs are enthusiastic about pay-for-performance proposals in exchange for avoiding fee cuts you know it isn't accomplishing a lot!

Wellness programs very similar to the ones we see today were around in the late 1980s and never accomplished a lot.

Health information technology progress and patient medical records are very important--particularly for improving quality--but have a lot of upfront costs and take years to payoff. Ask any doctor now struggling with them.

The disease management and coordinated care programs now being proposed are, like most cost containment "lite" proposals we are seeing today, helpful but only incremental extensions for what is going on in the market anyway. No silver bullets.

I hope the CBO doesn't cave to political pressure and keeps doing its non-partisan down-the-middle job.

If I hear the politicians whining and the special interests squealing about CBO's conclusions about how these cost containment "lite" proposals and policy rationalizations, like nebulous "pay-for-performance" that give policymakers a free pass on the tough decsions, don't save much money I know the CBO pros are doing their job.
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