Shoot the Messenger: Pelosi Attacks the CBO over Health Care Costs

The non-partisan CBO exists to provide Congress with facts and figures to make rational judgments on key policy issues. In addition it exists to counter balance the OMB and the presidents economic and budget arguments. To have the Speaker of the House and various other elected Democrats now discount the CBO over the most important policy issue in the country is absurd. Whatever happened to the "reality based community" that was allegedly going to make rational choices based on the facts?

House Speaker Nancy Pelosi took aim at the Congressional Budget Office Thursday for its cost estimate of a pending health care bill.Pelosi accused the nonpartisan budget analysts of always providing "the worst case scenario" on the costs of health care reforms and ignoring the savings associated with the proposal.

Congressional budget officials said Monday the health care bill would cost the government an estimated $1 trillion over the next decade and reduce the ranks of the uninsured by about one-third, or 16 million individuals. In a competing proposal, the cost equaled $1.6 trillion.The CBO released its preliminary estimate as several congressional committees looked ahead to votes on legislation that President Obama has placed atop his list of domestic priorities.

"It's always been a source, yes I will say frustration, for many of us in Congress that the CBO will always give you the worst case scenario on one initiative and never ... any credit for anything that happens if you have early intervention, health care," Pelosi said in her weekly news conference on Capitol Hill.

"If you have prevention, if you have wellness ... you name any positive investment that we make, that we know reduces cost, brings money to the Treasury in the case of education but never scored positively by the CBO. Yes, it is frustrating," she said.

This is what she is upset about:

From CBO Testimony to Congress on Controlling Savings:

Health information technology has the potential to significantly increase the effi­ciency of the health sector by helping providers manage information. In particular, electronic health records—comprising electronic documentation of providers’ medical notes, electronic viewing of laboratory and radiological results, electronic prescribing of medications, and an interoperable connection among providers of health care—could have a significant impact on medical practice.¹⁵ When used effectively, electronic health records could reduce the duplication of diagnostic tests; remind physicians about appropriate preventive care; identify harmful drug inter­actions or possible allergic reactions to prescribed medicines; and help physicians manage the care of patients with complex chronic conditions. Such steps could yield significant health benefits for patients, but research indicates that the extent to which health IT also generates reductions in health care spending depends largely on the incentives facing providers who have adopted it. By itself, the adoption of more health IT is generally not sufficient to produce substantial savings because the incentives for many providers to use that technology in ways that control costs are not strong.

The other day the president using his usual smoke and mirrors claimed trillions in savings with the aid of the health care industry, a claim the health care industry immediately refuted. Obama is using mythical savings as a selling point to paper over the fiscal disaster his plans are going to have. He knows massive tax increases will be needed but wants people to think this will be as painless as possible. Get the legislation passed, then give the actual bill.


From the CBO Blog:

Despite broad support among analysts for moving in these directions, there is substantial uncertainty about the effects of many specific policies. In particular, many policies in these areas might not yield substantial savings within a 10-year window. There are a number of reasons for this. In some cases, savings materialize slowly over time because an initiative is phased in. In other cases, initiatives that will generate savings—such as prevention efforts or disease management—have substantial costs to implement. In some cases, initiatives cause reductions in national health spending that the federal budget does not capture. In yet other cases, new structures for health care delivery improve health but do not provide incentives to reduce costs. And in other cases, limited evidence about effects on efficiency is available.

The CBO cost estimate the other day of adding at least a trillion on the deficit has flummoxed the President and liberals in Congress. With the public increasing wary of government spending they need and with an alternate less costly plan being bushed by Baucus the shoot the messenger approach to cover up the costs is one of the few cards Democrats have to play. Anyway as we have seen in Massachusetts, the costs do increase after "reform", to the point that the system is in danger of unraveling.

In other news today's the day Rangel is supposed to reveal his ideas on how they are going to pay for all of this.