Hullabaloo

Friday, July 17, 2009

 

Running With Half The Story

by digby

The headlines today were brutal on the health care front. The CBO chief's testimony that the reform bills currently on the table won't contain costs has shifted the Village chatter into shrill keening about deficits and costs and all the things the wealthy beltway celebrities love to pretend are important to average people just like them.

But there's a little problem with the reporting. First, the bills the CBO scored aren't complete. Second, the CBO didn't score the savings to the economy as a whole, which is the actual point of health care reform savings. From the Wonk Room:

Part of Elmendorf’s message is painfully obvious: investing in health care reform by providing Americans up to 400% of the federal poverty line with subsidies is going to cost the federal government a good deal of money — somewhere between $1 trillion and $1.5 trillion, to be exact. Progressives have always argued that in order to reduce the growth of health care costs in the long term and avoid the kind of catastrophic spending levels that could swallow-up our entire economy, we’re going to have to bring everyone into the health care system. As Elmendorf points out, that shows up on the federal books.

But the budget outline that passed the Senate Budget Committee requires a fully funded health reform bill, and both the Senate Finance Committee and the House Ways and Means Committee are proposing different options to pay for reform and ensure that the bill does not add to the deficit. For his part, Elmendorf, is isolating the ledger of the federal government from the context of the entire system. In other words, since many of the savings from reform won’t be reflected in the federal budget, Elmendorf does not consider them. But modernizing the health care system (implementing electronic medical records, health information technology) and reforming the way Medicare and Medicaid reimburse providers will save money for the system as a whole. As Melinda Beeuwkes Buntin and David Cutler pointed out in a recent analysis, these savings can total to some $2 trillion. In fact, even the industry is on record as saying we can reduce the growth rate in annual health spending by 1.5 percentage points a year over the next 10 years, lowering spending overall health care spending by $2 trillion (this represents a 20 percent reduction in projected growth.) Elmendorf is looking at the trunk of the elephant and not the whole.

This is an obvious point, but one that seems to have been overlooked in the reporting.

Meanwhile, there is a new call for delay from centrist Democratic Senators. And one of the people arguing for delay is Ron Wyden, whose plan dday endorses below and suggests that progressives rally around. Perhaps Wyden hopes to build some consensus around his plan which is why he's among those seeking delay.

On the merits I agree with dday. I see no reason why everyone is so wedded to the idea that employer based health care can't be touched. But I have my doubts about whether or not a delay to accomplish that at this point is a good idea from a political standpoint. The CW is that any delay is the kiss of death; giving the insurance companies the month of August to plaster the airwaves with ads is a very bad idea and once they get past October this all starts to become impossible under the constraints of an election year. I don't know if that's exactly true, but the administration certainly seems to think so as does the congressional leadership. I do that regardless of the electoral restraints, getting the entire government focused on major reform is very, very difficult and requires momentum. The momentum for health care reform came out of an exciting election campaign and the inevitability that was built around Obama's mandate. The energy from all this rapidly fading as it was always going to do. I'm not sure we get it back.

Whatever happens, people need to understand at least one thing --- the idea behind health care reform was to bring down costs across the entire health care economy, which was not scored by the CBO. This is a very important piece of information that reporters should be imparting along with what seems to me to be their glee at the prospect of health reform failure.

Update: Larry Summers should be kept on a leash.

Update II: John Harwood and Norah O'Donnell both agree that if a "partisan" bill passes then the Republicans will be sitting in the catbird seat with something to run against. Apparently, health care reform is very unpopular. Who knew?

They also think that destroying real reform to get three Republicans will make it "bipartisan" and then the Republicans can't run against it.

I wonder how the weather is on their planet today?


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digby 7/17/2009 11:30:00 AM |