The Media & The CBO’s Suspect Health Care Prognostications
By Justin Gardner | Related entries in Health Care, Republicans
“In CBO’s judgment, the probability is high that no savings would be realized … but there is also a chance that substantial savings might be realized.”
That was the CBO’s lead in to their analysis about the Independent Medical Advisory Council that Dems want to add to the health legislation in order to keep health care costs in check. Of course it’s the CBO’s job to make sure people aren’t playing fast and loose with the facts, but they note no actual probability…just that it’s most likely high.
Come on…how is that a responsible, objective position?
This entry was posted on Saturday, July 25th, 2009 and is filed under Health Care, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 25th, 2009 at 7:57 pm
So here’s the question to you Justic should the Obama just let the CBO construct and over hall heath Care?
July 25th, 2009 at 9:32 pm
There’s one thing you have to keep in mind. Most experts think one reason we spend so much on health care, but still suck in the stats, is specialists make too much compared to family Docs. Which means for many people there is no GP (Family Doc) to diagnose diabetes early, but there is a team of dedicated Emergency Medical personal ready to get them out of diabetic shock. This commission would have the power to fix that problem in MediCare by reducing Specialist payments and increasing payments to GPs. That’s the reason it’s possible this commission could save $Trillion$.
The trouble with forecasting the actual savings is that a) it’s possible all these experts (including me) are full of shit on this issue, and b) it’s possible Medical Specialists will take over the Commission and increase their own pay even more. What we do know beyond all doubt is that this commission would take away Congress’s ability to use MediCare payment rates as pork. That’s why they found some savings ($200 Million a year, IIRC).
I’m in favor of implementing it despite the uncertainty. If it works it’ll be great. If it doesn’t work the only losers are Congressman, and all they lose is pork.
July 25th, 2009 at 11:53 pm
I suspect that the “probability” weasel words were put in this report to help not hurt the Obamacare proposals. If you held the CBO feet to the fire on a hard savings number they would probably say there are no firm bankable savings in this proposal. None. The administration likely begged and fought for the ambiguity to be introduced.
Even more interesting, is how the CBO suddenly became “suspect”
Let’s see…
The CBO was good enough to quote as support for your post here in a 2005 argument against Republican tax cuts.
The CBO was good enough to quote as support for your post here in a 2005 argument questioning the Republican Threasury Secretary representations.
The CBO was good enough to quote as support for your argument here in support of the Stimulus package.
The CBO was good enough to quote as support for your argument here in support of Cap and Trade.
But now the CBO projections are suspect.
Shocking how they could became so unreliable so quickly.
July 26th, 2009 at 5:23 pm
Geez I’ve been in the moderation queue a long time. I’m pretty sure it was because I said it was possible that I “was full of ..it.”
July 26th, 2009 at 6:04 pm
Sorry Nick. Wasn’t checking the moderation queue today. Am on vacation so trying to get in some fun in the sun. But it should be published now.
Mike, come on…
First, I didn’t call them unreliable as a whole, so please don’t come in here and characterize it as such.
Second, linking back to my content to basically suggest that I’m being intellectually dishonest is REALLY bad form. Please don’t be that guy.
Third, I cite CNN often too. That doesn’t mean they don’t make mistakes and I call them out when it happens, don’t agree with them, etc.
To the broader point, CBO has been traditionally very reliable. But I find these predictions to be vague enough to almost be pointless. It feels incredibly lazy, and yet the media is gobbling up this as if it’s some shocking blow to the health care reform plan. And that is the point of my post over at True/Slant.
Alistair, it’s not the CBO’s job to craft legislation, but they do come up with ideas that could help cut costs and that’s what they did here. Take a look at the last couple pages of their report. Some good ideas in there, but I just find the first part to be weirdly lazy.
July 26th, 2009 at 6:26 pm
First off, the bill being referred to would create the Independent Medicare Advisory Council, not an Independent Medical Advisory Council. A telling slip — is the Council expected to extend its authority far beyond Medicare to encompass ALL American health care, once established?
CBO has not yet released a complete analysis of IMAC 2009, just the advisory summary. In such summary form one does not expect to see detailed explication of the projected probability sheafs, so that’s not a surprise. (CBO typically does NOT assign specific probabilities to uncertain events, but a spread probability range, aka “probability sheaf.”) Nor can they possibly assign exact probabilities to uncertain possible future political actions, so they don’t, other than to point out that same would radically alter their assessments. Justin is slamming CBO for not playing beyond the knowledge and techniques available to them. That’s not being deceptive, it’s being responsible and factual.
Nor is a detailed analysis truly possible outside a comprehensive analysis of HR 3200, the draft “reform” bill to which IMAC 2009 is proposed to be attached. Definitionally CBO is reporting on the changes in the increases/decreases in their cost projections of the primary bill, HR 3200 that result from incorporating IMAC 2009 into it. The (non-graphic, bare-bones summary) CBO report on HR 3200 can be reviewed HERE.
Of particular note is that the CBO letter on IMAC 2009 refers ONLY to potential savings in Medicare itself, not to the health care system overall. As we all know, in the past such “savings” in Medicare have been achieved by offloading Medicare costs onto the private sector. Removing them from the Medicare program does NOT remove them from the overall HC system. Indeed, this is one of the very things that drives the excess cost increase rate in private insurance premiums. Providers adjust for Medicare cost restrictions by increasing charges to private payors.
“Suggestions” from the Mayo Clinic that appeal to their own self-interest are no different than those from any other “interested player,” to be viewed as being in the self-interest of those suggesting them. That does not mean they will be good for the rest of us in general. IMAC 2009 would shift oversight of Medicare from Congress to the White House, and there’s little doubt that IMAC would be a politicized entity, as compared to the Mayo’s own internal MAC.
July 26th, 2009 at 6:44 pm
To the broader point, CBO has been traditionally very reliable.
Within the scope of what they have to work with, and subject to numerous caveats about the inherent limitations of their methodology. Those limitations are very very real. They do not have time machines to go forward and check, and they have at times been very wrong indeed.
July 26th, 2009 at 8:31 pm
Sorry Justin, but – no apologies.
The CBO is not CNN. As Tully points out, this report is completely consistent with CBO’s mission and the constraints of their methodology. As are the other CBO reports you quoted.
If you are going to quote a source when it supports policies you like, then diss the same source when critical of a policy you like, you deserve to be called out on it.
This is a fair shot.
If you are feeling injured, it’s self-inflicted.
July 26th, 2009 at 9:46 pm
No problem Justin. Just wanted to remind you if you’d forgotten, and make sure I hadn’t accidentally violated some policy.
First off, the bill being referred to would create the Independent Medicare Advisory Council, not an Independent Medical Advisory Council. A telling slip — is the Council expected to extend its authority far beyond Medicare to encompass ALL American health care, once established?
It won’t have statutory authority over anything but MediCare payments. It may make recommendations on other health issues, but they won’t be binding.
Congress may choose to give it more authority in the future, tho.
As we all know, in the past such “savings†in Medicare have been achieved by offloading Medicare costs onto the private sector.
Providers always say that when they tell the insurance company rates are going up. But the evidence for this is mixed at best. For example MediCare payments are not cheap by international standards. And yet hospitals in other countries survive.
Remember most providers (especially hospitals) are supposed to be non-profit. They are literally breaking the law if they charge more than cost. And the latest study indicates that MediCare payment rates are almost exactly the same as costs at places like the Mayo Clinic.
The problems are two-fold. First most hospitals are horrendously inefficient. The Mayo Clinic spends significantly less per patient than other, crappier, hospitals. The problem isn’t that MediCare pays these hospitals too little, it’s that hospitals have no reason to control costs because:
Second, the health industry is flooded with ridiculous amounts of money. The industry has made an art form of jacking up prices and blaming the increase on someone else. When one layer increases prices a little the others use the opportunity to jack up their own prices and blame someone else.
July 27th, 2009 at 1:20 am
Mike,
Here you are accusing me of cherry picking CBO reports only when they serve my needs, and you’re cherry picking my posts?
There are other examples where I clearly use their projections when it’s seemingly going against things I’m advocating for.
Also, if you searched through my posts to find the ones you cited, I find it very hard to believe that you didn’t run across the ones I post here. I’d like to give you the benefit of the doubt, but since you’re accusing me of being a dishonest broker, well, right back at ya partner.
So no, it wasn’t a fair shot. Not in the least.
Tully, what I meant to say is that the CBO has been reliable when it comes to how they present their findings. Of course they’ve been wrong in the past and there are always caveats on anything they (or anybody else) puts out. But I’m not going to get into that every single time I talk about them because it’s implied in the very idea that somebody is speculating.
Also, about the Mayo Clinic…well…yeah. But that doesn’t mean their ideas are wrong or wouldn’t be good for the broader population. Also, don’t you think it’s a bit disingenuous to think the worst of their intentions? Of course they’re trying to help the system as a whole. Greed is not the only factor when it comes to making business decisions.
But, again, this post was less about the CBO and more about the media reporting it as if their findings were iron clad w/o acknowledging the caveats. Why didn’t the headlines carry with the the overarching ambiguity contained within the report? This is what I’m not understanding.
August 1st, 2009 at 1:35 pm
Justin,
We’ll just have to agree to disagree on this one. It is not clear that (for at least 2 of the 3) additional links you cite are that you are using the CBO numbers for anything except to support traditional left of center positions. One uses the numbers to beat up on private health insurers, and the other is to express the opinion that “something” will have to be done about unsustainable deficits. Everyone is against unsustainable deficits. The right focuses on spending cuts, the left focuses on raising more taxes. That post is at best ambiguous about your position, as is the third post you cite. “Intellectual dishonesty” and “dishonest broker” are your terms not mine. I don’t see your selection of when to believe or not believe CBO projections in terms of “honesty” or “dishonesty”. I see it as the usual phenomena of a partisan seeing the world through the prism of their pre-conceived notions. You’ve got your dogma, I’ve got mine.
Fair shot.
August 1st, 2009 at 6:45 pm
Justin, pointng out that the Mayo has self-interest involved is simply acknowledging reality, not thinking the worst of them.
The CBO is certainly more consistent and subject to much less systematic error than the OMB, which is subject to and affected by what the boss wants, the boss being the White House. Even when the White House takes the unprecedented step of summoning the CBO director to the White House to lean on them, something that Congress as a whole is bound to resent.
It won’t have statutory authority over anything but MediCare payments. It may make recommendations on other health issues, but they won’t be binding.
Better go read the bill. And acknowledge the political reality that any “public option” pool OR federally mandated standards for compulsory insurance WILL be based on the IMAC’s rulings and recommendations. That’s for starters.
Providers always say that when they tell the insurance company rates are going up. But the evidence for this is mixed at best. For example MediCare payments are not cheap by international standards. And yet hospitals in other countries survive. Remember most providers (especially hospitals) are supposed to be non-profit. They are literally breaking the law if they charge more than cost.
First off, providers say it because it’s true. I’ve been a clinic manager and been around medicine my entire life. When Medicare cut reimbursement rates or even just let them lag behind inflation, “private pay” patients get their costs boosted. It’s been a while since I was in that business, but the situation there has gotten worse instead of better. There are some exceptions where Medicare is profitable, and “boutique clinics” have popped up all over the country to take advantage of them, specializing in lucrative fields where reimbursement is still profitable. (Cardiology is a good example.) These private for-profit clinics/hospitals actively siphon off the profitable patients from the general hospitals, leaving those hospitals faced with even worse finances.
Medicaid is even worse. I can’t remember a single Medicaid case where we we did better than break even on material costs, much less on personnel costs. There’s no mixed evidence — we are not “other countries,” and that standard is not what applies. Not without a fundamental bottom-up restructring of the entire health care system, which would go FAR beyond even the so-called “reforms” now being discussed.
Second, I have no clue where you get the idea that “most providers are non-profit” when that also is not true, nor the idea that non-profits are somehow breaking the law by generating a surplus. “Non-profit” means they are not in business to make a profit, not that they are breaking laws by running surpluses, which are normally used to expand. There is no law against non-profits running surpluses, and they break no laws at all by charging more than cost.
Last, the Mayo is indeed a fine institution, but if you think it survives as a private non-profit group practice simply on patient fees, well, time for another surprise. They get a lot of revenue from research grants and other government funding. Nor would I count on getting admitted there if you lack insurance or substantial private means. They are non-profit, but they are not a charity. They want to be paid.