Twice the non-partisan and highly-respected Congressional Budget Office has said that new plans to deal with healthcare will not end up reducing costs, as supporters keep promising.
This time the CBO passed judgment on a proposal to have an independent panel of “experts” come up with reimbursement rates, as opposed to Congress, which would probably be too politically motivated (and ignorant) to come up with rates.
Politico: A key House chairman and moderate House Democrats on Tuesday agreed to a White House-backed proposal that would give an outside panel the power to make cuts to government-financed health care programs. White House budget director Peter Orszag declared the plan “probably the most important piece that can be added” to the House’s health care reform legislation.
But on Saturday, the Congressional Budget Office said the proposal to give an independent panel the power to keep Medicare spending in check would only save about $2 billion over 10 years- a drop in the bucket compared to the bill’s $1 trillion price tag.
“In CBO’s judgment, the probability is high that no savings would be realised … but there is also a chance that substantial savings might be realised. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis,” CBO Director Douglas Elmendorf wrote in a letter to House Majority Leader Steny Hoyer on Saturday.
This is bad news for supporters of reform not just because of what the CBO says, but because this independent panel was supposed to be an inducement for the moderate “blue dog” Democrats to come on board.
But even without the CBO’s wide judgment from above, why are we so unambitious in our thinking that the only way can come up with to cut costs is to empower a panel? There are all kinds of industries out there (notably in tech, but not exclusively) where costs come down every year and quality goes up without an independent panel setting rates. We’re glad the CBO didn’t buy it here.
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