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Dumping on the CBO

By June 26, 2009November 2nd, 2009Commentary

The President and a number of Democrats are beginning to criticize the Congressional Budget Office’s projections on the financial and coverage effects of various health reform proposals.  (ABC News report)  They are claiming that the CBO is too conservative; that it ignores certain favorable impacts of the proposals and that it is not based on “real-life” experience.  These criticisms have arisen following CBO’s pronouncement that the Kennedy/Dodd bill would provide a modest decline in uninsured individuals at a cost of over a trillion dollars in ten years and an apparent informal estimate that the Senate Finance Committee bill would cost $1.6 trillion over the same period. 

In regard to the overall method and approach of the CBO, no one should be surprised by the current scoring of reform proposals.  The CBO has used the same methodology for many years, most recently in its December 2008 analysis of various possible cost-savings methods and its work earlier this year in looking at health insurance reform proposals.  Some of the specific complaints being voiced are also not particularly well-founded.  The President mentioned not getting credit for prevention and wellness efforts, but the CBO and many other researchers have reported that there are small savings, at best, from widespread prevention and wellness programs.  Senator Dodd referred to smoking cessation programs, but he apparentlyhas not looked at the studies showing that smokers’ have a lower lifetime health cost than non-smokers, primarily because they die younger.   The President listed savings from greater health IT use, but again, it is fairly clear from studies and past experience that implementation of new information systems probably actually adds to cost in the first few years and may generate modest savings in later years.   He also referred to evidence-based care savings, but the reform bills don’t specify exactly how comparative effectiveness research and resulting guidelines would be used to limit provider reimbursement.  CBO and others have pointed out that comparative effectiveness research will have little impact if not linked to provider payments and that it will be years before there is a significant enough body of research to affect the many uncertain areas of health care delivery.  Finally, the President mentioned changes in provider reimbursement, but the Administration has not put forward a specific proposal to change or limit provider payments nor do any of the current drafts of reform bills.  CBO would rightly be very skeptical of vague references to changing reimbursement, because Congress recently has shown no willingness to limit those payments and the provider trade associations have reacted vociferously to suggestions that there might be limits on how their members are paid.

CBO has a long history of being respected as a non-partisan analyst of legislative proposals.  It is a highly dangerous game for the Administration and Congressional Democrats to undermine its work.  If they disagree with CBO’s work, they should present an analysis laying out the opposing case in the same level of detail and sophistication that CBO uses.  It appears that people believe reform efforts are in trouble, primarily because of cost, and proponents are prepared to ignore responsible, credible analysis if thats what it takes to get a bill passed.

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