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Office of the Actuary: Democrat health care "reform" will increase costs

Interesting story that got no play in our famously free press or on the A list, though Hipparchia covered the wonky version of the story. This is the snarky version! From Wednesday of this week:

The nation's medical costs will keep spiraling upward even faster than they are now under Democratic legislation pending in the House, a report from government economic experts [but see below] concluded Wednesday.

The Obama administration immediately challenged the analysis...

Of course, of course.

... saying it is out of date because the House bill is being rewritten to bring costs under tighter control ...

Of course, of course. (Even though single payer would save the country at least $350 billion a year, and it's not even on the table. Thanks, "progressives"!)

and will be merged eventually with other House legislation and a Senate bill.

The report from the Office of the Actuary*, which does long-range cost estimates for Medicare, carried an unusual disclaimer, saying that it "does not represent an official position" of Health and Human Services or the rest of the administration.

The disclaimers and warning labels actually the report more credible to me, since it smells like whistleblowers, or at least a bureaucratic victory by people who are very, very sure of their results. (Oddly, or not, the administration still hasn't appointed a Medicare administrator, to whom the actuary would report.)

Unlike previous estimates that have focused mainly on the legislation's impact on the federal deficit, the actuaries' report looked at total costs, public and private, over the next 10 years.

Translation: This is not CBO scoring, which is concerned with the impact on the deficit. It's a full analytical study, which is what single payer should be getting!**

It found that the nation's health care tab would increase somewhat more rapidly with the legislation than if nothing is done. The main reason: Newly insured people will seek medical care.

Well, if the insurance companies are still going to be taking thirty cents of every health care dollar, that's not very remarkable, is it?

The nation's health care tab, now at about $2.5 trillion annually, is projected to approach $4.7 trillion in 2019 without the legislation.

With the legislation, national health care spending would be nearly $4.8 trillion in 2019.

"With the exception of the proposed reductions in Medicare ... (the legislation) would not have a significant impact on future health care cost growth rates," the report said. Moreover, it's "doubtful" that proposed Medicare cuts will stay in place, the analysts concluded.

Measures in the legislation to reduce cost may take 15 years to 20 years to deliver a savings dividend, the report said.

It also cautioned that tens of millions of newly insured people could put a strain on the health care system.

"The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting and/or changes in providers' willingness to treat patients with low-reimbursement health coverage," the analysts concluded.

Any serious attempt to cut costs and maintain the level of care would do what the rest of the civilized world has done: Cut the insurance companies out of the equation entirely, or regulate them so tightly that they might as well be non-profit public utilities.

So, (a) Obama's health care deform effort is and has been from the start about bailing out the insurance companies, quelle surprise, and (b) if there are savings to be had, they're going to come by decreasing actual medical services performed under Medicare, presumably by throwing "going to die anyhow" elders under the bus, as the Dartmouth study is misused to establish a national lowered baseline for costs. Which would make Obama's health care deform effort "entitlement reform" by stealth. Yay! Versailles will love him!

NOTE * The actuary, Rick Foster, also served under the Bush administration, who threatened to fire him over the same sort of issue.

UPDATE ** I called Rep. Weiner's office (202.225.6616) and suggested this....

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CMike's picture
Submitted by CMike on

The next to the last link, the "The Dartmouth study is misused..." one, needs work.

Fredster's picture
Submitted by Fredster on

they always say this:

It also cautioned that tens of millions of newly insured people could put a strain on the health care system.

All of a sudden I'm going to run to the doctor because now I have health insurance?
I won't. I'll go when my maintenance meds run out and if he sees something unusual, he might want to do a test. If there's prescription coverage of some type, I might go from one med to another (prilosec to Nexium) or something like that. However if I get coverage under one of these things I'm not going to go running to the doctor first thing.

Salmo's picture
Submitted by Salmo on

The assumption of a flood of new treatment demands rests on the notion that substantial untreated conditions exist now - killing tens of thousands per year and reducing the quality of life for hundreds of thousands more. We are cautioned by the likes of Kyle to be skeptical that this may be the case. Well, I don't have to take Harvard's word for it, I can see that this is true right here in my little town. I contract with a relatively large number of self-employed men and women to perform services for my business. Almost all of them lack health insurance, and almost all of them avoid medical treatment for conditions they have right now (some of which are life threatening) because of fear of the costs. If somehow these people were to be able to afford treatment, they would flock to the caregivers. Health care reform that does not produce such a surge in treatment demands should be regarded as a failure, notwithstanding the White House, Congressional leadership, and their chorus that will proclaim a great policy achievement regardless of the bill Obama actually signs. What does it say about our society, that its leadership regards leaving a situation like this uncorrected as a victory?

Submitted by hipparchia on

-- i hope.

i've got stuff i've been putting off and could get taken care of under single payer. under the present version of obamacare it's unlikely i'll have enough money left over after paying the premiums [even with a subsidy] to actually pay for care.

Bryan's picture
Submitted by Bryan on

Initially people will take care of issues they have been putting off. Medicare shows this with the heavy cost of people who have been holding out for coverage, and finally get it.

But, in the long term there will be a decrease as people take care of problems earlier, and don't end up in emergency rooms with serious problems.

Regular check-ups can catch problems before they become serious, and they can usually be resolved at a much lower cost. This should also help reduce the "bulge" caused when people go on Medicare.

You can't do realistic planning based on the spikes that are caused by the current dysfunctional non-system.

Submitted by hipparchia on

spending continued to rise for a year or so after their medicare was fully enacted, but then it leveled off. from a 1979 article on canada's medicare --

From 1951 to 1971 health care expenditures rose rapidly to 7.3% of the gross national product (GNP), but have since decreased and stabilized at about 6.9%. In contrast, health care in the United States represents 8.6% of GNP. Hosptial use also increased rapidly in Canada to 1970 but appears to have stabilized and decreased slightly in this decade. Physician incomes rose rapidly before 1971, but since then the increases have slowed and relative incomes of physicians have fallen.