Sunday, December 20, 2009

CBO Sees Diminished Quality of Care and Reduced Access

Via Memeorandum

Bill Kristol writes in The Weekly Standard there are ten key words to remember from page 19 of the CBO letter on the Manager's Amendment to the Senate health care bill. These 10 words are highlighted in bold below:
Based on the extrapolation described above, CBO expects that Medicare spending under the legislation would increase at an average annual rate of roughly 6 percent during the next two decades--well below the roughly 8 percent annual growth rate of the past two decades (excluding the effect of establishing the Medicare prescription drug benefit). Adjusting for inflation, Medicare spending per beneficiary under the legislation would increase at an average annual rate of less than 2 percent during the next two decades--about half of the roughly 4 percent annual growth rate of the past two decades. It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would be accomplished through greater efficiencies in the delivery of health care or would reduce access to care or diminish the quality of care."
While the CBO analysis has been touted as proof of the fiscal soundness of the health care legislation, a claim that is demonstrably false by the way, achieving those goals absent greater efficiencies in the delivery of care will likely result in diminished quality of care and/or reduced access to care.  James Capretta elaborates:
Similarly, the Medicare cuts assume that hospitals, nursing homes, home health agencies and others can survive with a permanent annual cut in their payment rates for presumed productivity gains. Medicare’s chief actuary has already signaled that this reduction could push one in five hospitals into insolvency, thus forcing them out of the Medicare program.

 I recommend reading Capretta's analysis of the budget gimmicks and tricks included in the amendment which were likely written solely to get a better "score" from the CBO.  Director Elmendorf of the CBO had a seat at the grownup table, you may recall,  where the much anticipated Baucus bill was written.  Clearly, over time, the Senate has learned how to write or propose legislation that scores well at least theoretically.  Practical application of the savings and cuts have always had a caveat in the CBO analysis.  It is quite likely the smoke and mirror savings may never materialize, the reduced access or diminished quality of care almost certainly will materialize as millions are added to an unreformed system.

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