Do the health reform numbers matter?
The Congressional Budget Office released a slew of numbers on what the health care overhaul would cost: $940 billion over 10 years and more than a trillion in deficit reductions over the decade after that. Nancy Marshall Genzer reports.
U.S. Speaker of the House Nancy Pelosi speaks at an event highlighting health care reform at the U.S. Capitol in Washington, DC. (Win McNamee/Getty Images)
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Kai Ryssdal: Other than the actual voting, I think Congress cleared the last big hurdle in the health care debate today. We got the official scorecard on it this morning. It's going to cost the government $940 billion over 10 years. Over 20 years, though, the bill is supposed to shave more than a trillion dollars off the budget deficit.
Those are big numbers to wrap your brain around. But really, at this point in a long, long debate -- do they even matter? We asked Marketplace's Nancy Marshall Genzer to figure it out.
NANCY MARSHALL-GENZER: The numbers come from the Congressional Budget Office. It said today the final version of the Democrat's health care overhaul would cut the deficit by $138 billion over 10 years.
PAUL LIGHT: I don't take the number too seriously.
That's Paul Light. He's a professor of public service at New York University. He says the health care overhaul now appears inevitable.
LIGHT: Now it is a done deal, more or less. I don't think anybody is going to be swayed one direction of the other. Ultimately the number is going to fade from memory rather quickly.
And, ultimately, the deficit reduction number might turn out to be wrong. These predictions are really hard to make.
Vivian Ho is a health care economist at Rice University.
VIVIAN HO: What's important whenever you're doing these predictions, is to predict how people will respond in terms of what type of health insurance policy they're going to buy, and whether they're even going to buy health insurance or not.
The polite term for this uncertainty among economists is elasticities.
HO: And so sometimes they get the elasticities wrong.
Economist Paul Van de Water did cost estimates for Congress for 18 years at the CBO. He says, elastic as the health care numbers are, they could help sway undecided members of Congress.
PAUL VAN DE WATER: There were some members that wanted to be absolutely sure that the proposal they're going to vote on will be fiscally responsible -- that it won't add to the deficit. And now they have confirmation.
And if the numbers are wrong, they can blame the CBO.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
Comments
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From Milan, MI, 03/20/2010
Actually, no, if the numbers are wrong, you *can't* blame the CBO. The Congressional Budget Office is required to accept any assumptions the bill it's scoring makes about how revenues and expenses will change, even if it's painfully obvious that those assumptions cannot be true, rely on accounting tricks, or count revenues twice.
From Fallbrook, CA, 03/19/2010
How about factoring in the current updates on the effectiveness of all the prescribed drugs and all these diagnostic procedures including questionable cancer tests? Dr. Richard Ablin of the University of Arizona, developer of the PSA test called the prostate test a 'public health disaster' and a news report of a new ovarian cancer test that showed 64% false positives. Does anybody care that the fact that these tests are wrong most of the time cause massive personal suffering for the profit of the medical business?
The "for-profit medical biz", including health insurance companies, drug companies, medical device suppliers, doctors and for-profit hospitals should consider whether they are going to be the next financial bubble, facing a meltdown as their business eats up almost 20% of the US economy yet we have one of the least healthy populations in the world who are rapidly losing the ability to pay the ever-escalating costs.
It's beginning to look like the "dot-bomb" and housing bubble to me.
From NC, 03/19/2010
If you believe that spending more money will reduce the deficit, you have not been paying attention, either to basic economics or to the general incompetence of Congress.
From Chicago, IL, 03/19/2010
One way to reduce costs is to not provide services to people without insurance or the ability to pay. People will buy insurance then instead of a new car or bigger house than they can afford.
Until health care loses its halo of being a right, and is treated like everything else we need and buy, costs will continue to rise at above inflation rates.
The affirmation of heath care as a right is the real result of the health care debate we have just witnessed. This will continue to do great harm to our economy.
03/19/2010
There are two possible solutions to rising health care costs.
One is to restructure the system so that hospitals, providers, big pharma, medical products companies and insurers compete solely to add value to the patient. Today the compete by raising prices and transferring costs to each other and patients.
The second, is to make the system non-profit. That includes all the above categories of stakeholder.
Both solutions are non-starters in our kelptocratic government. The result is a Potemkin Village and continued rising costs.
But regardless of which of these solutions might be chosen if the government were democratic and acting for the common good, we Americans still need to stop abusing our bodies for decades then expecting medical science to put us Humpty Dumpty's together again. No health care system can do that and prevent costs from soaring.
From Fallbrook, CA, 03/18/2010
If you followed the Anthem Blue Cross story in California recently, you might question the elasticity of the health insurance market. The company was raising rates at much as 39% on may individual policy holders claiming that they had lost healthy customers because they could not afford the policies. Nowhere did they question the willingness or ability to pay these rates of those being hit with such large increases. Now one could make a case for the company being ignorant of how an insurance company should work, but the more important issue is probably that they are pricing themselves out of the market. Since they are in cahoots with the drug companies and for profit medical services companies, it begins to sound a lot like the housing market a few years ago, when builders, real estate agents and appraisers and banks worked together to create a housing bubble.
Is the healthcare bubble next?
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