Event Recap: Will Health Reform Heal the Federal Budget?

This morning, US Budget Watch, a joint project of the Committee for a Responsible Federal Budget and The Pew Charitable Trusts, hosted an event on the current health care reform debate. The event focused on the fiscal implications of reform, specifically looking at costs, offsets, and the extent to which health care reform can “bend the cost curve.” Featured at the event was a new set of charts Comparing the Health Care Reform Bills along with previously released US Budget Watch papers Comparing Health Care Plans and Evaluating Health Care Plans.

This event took place just as CBO has recently released a new updated cost estimate of the House health care bill.

Our friends over at New Health Dialogue twittered the entire event, and have posted a blog on it here.

The panel discussion was moderated by Washington Post reporter Ceci Connelly (who had this impressive article Wednesday on the length the health reform proposals go to in order to cut costs), and included health care policy experts Jim Capretta, Donald Marron, Len Nichols, John Rother, and Paul Van de Water. The panelists engaged in a spirited discussion ranging many topics, from the issues surrounding the role of the Congressional Budget Office as the official scorer of the proposals, to the confusion surrounding the actual projected costs of expanding coverage, to the challenges of trying to truly bring down health care costs, to the political sustainability of hard decisions made in the bills.

Donald Marron, from the Georgetown School of Public Policy discussed the confusion out there regarding the true costs of the bills, a topic he has explored on his blog. Lamenting that we are not getting enough value for our dollar – a common theme at today’s event – he discussed the pay-fors in the bills that go toward covering some of the costs, and if we can believe that Congress will in fact have the backbone and the willingness to pass strong versions of these pay-fors. Jim Capretta, from the Ethics and Public Policy Center, spoke along the same lines as Marron, saying that the true cost of the House bill is not $900 billion, but more like $1.5 trillion when the doc fix is included. He also said that offsets could be politically unsustainable, and that generally the House bill did not include enough incentives to let the market slow cost growth.

Paul Van de Water, from the Center on Budget and Policy Priorities, thought the bills were surprisingly good first steps, in that many people did not believe they would be deficit neutral. Impressed with how fiscally responsible the bills were, Van de Water listed the provisions such as the excise tax, accountable care organizations, and bundled payments as good potential policies that could revolutionize health care. John Rother, from the AARP (whose organization endorsed the House bill this week) noted that it would be more effective if the entire health system were addressed as opposed to simply Medicare. He also said that in looking at this issue it is important not only to pay attention to the federal budget, but also to overall national spending on healthcare as well as household budgets, and touched back upon the theme that people are not getting what they deserve for the money that is being spent.

Len Nichols of the New America Foundation spoke significantly on how to bend the cost curve while reforming health care. In the short-run, Nichols argued we could wring out much of the waste in the current system (estimated at 30% by some) while being smarter about adopting new technology over the long-run. He argued that incentives could be changed to make inefficient providers look more like efficient providers -- especially through payment reforms which encourage care coordination and reward efficient care, but also through measures to encourage more efficient consumption of care; specifically a tax on high-cost plans.

Overall there was broad agreement that the health reform legislation will be passed – and many of the panelists believed it would make many positive inroads on cost control – but there was also concern that it would not do nearly enough toward addressing the long-term pressures health care poses for the federal budget. In the end, they concluded, health care reform would be a continuing process.



Welcome: Doug Hamilton, The Pew Charitable Trusts

Opening Remarks: Maya MacGuineas, Committee for a Responsible Federal Budget & US Budget Watch

Moderator: Ceci Connolly, The Washington Post

Jim Capretta, Ethics and Public Policy Center

Donald Marron, Georgetown School of Public Policy

Len Nichols, New America Foundation

John Rother, AARP

Paul Van de Water, Center on Budget and Policy Priorities