Conservatives have an amazing skill for picking and choosing which facts to use to support their beliefs, and have absolutely no difficulty promoting contradictory claims if it supports their cause. Conservatives ignore the predictions of the Congressional Budget Office which show that the public plan would not be a threat to private insurance companies. They had no concern about their predictions as to the cost of the Iraq war. They certainly don’t pay any attention to their predictions that tort reform would not significantly reduce health care costs. On the other hand they promote the report which says that savings will not fund health care reform.
Besides the contradiction of picking and choosing which CBO reports to pay attention to, conservatives fail to realize that one reason the CBO minimizes savings is that the bill does not give the government all that much power to lower costs. In other words, endorsing the CBO report contradicts conservative claims that the proposed health care reform would amount to a government take over of health care or socialized medicine. Conservatives oppose those measures which would lead to greater savings.
The other problem with the report is that the methodology used by the CBO under-estimates savings because they can only include savings which clearly can be measured and coded. Jon R. Gabel, a senior fellow at the National Opinion Research Center of the University of Chicago, has reviewed the track record of the CBO and has showed that their methodology routinely underestimates savings. After giving some examples he concludes:
The Congressional Budget Office’s consistent forecasting errors arose not from any partisan bias, but from its methods of projection. In analyzing initiatives meant to save money, it helps to be able to refer to similar initiatives in the past that saved money. When there aren’t enough good historical examples to go by, the estimated savings based on past experience is essentially considered to be unknown. Too often, “unknown” becomes zero — even though zero is not a logical estimate.
The budget office has particular difficulty estimating savings when it considers more than one change at once. For example, last December the office reported that it found no consistent evidence that changes in medical malpractice laws would have a measurable effect on health care spending. It also reported that increased spending on studies comparing the effectiveness of different drugs and medical treatments would yield no net savings for 10 years. Yet if both malpractice reform and comparative effectiveness studies were instituted simultaneously, they might work together to yield substantial savings; doctors would gain more confidence in the effectiveness of less aggressive treatments and, at the same time, could use those treatments with less to fear from lawsuits.
The budget office’s cautious methods may have unintended consequences in the current health care reform effort. By underestimating the savings that can come from improved Medicare payment procedures and other cost-control initiatives, the budget office leads Congress to think that politically unpopular cost-cutting initiatives will have, at best, only modest effects. This, in turn, forces Congress to believe it can pay for reform only by raising taxes, which then makes reform legislation more difficult to pass.
The most likely reality is somewhere between the CBO report and the overly optimistic claims of the Obama administration. The CBO’s methodology has prevented them from considering health care savings from the proposed legislation–just as their methodology prevents them from recognizing savings which might come from tort reform–as there is no way to accurately measure the savings at this time. The proposed measures will ultimately save money, but it will also be necessary to spend more at first for measures like expanding preventive care and promoting computerization of medical records. Health care reform will probably save money, but I do not believe the savings will pay for the proposed measures.
