MY VIEW: Eugene Steuerle August 2012

Today, in "The Government We Deserve," Eugene Steuerle wrote an opinion piece about the need for budget constraints alongside health care reforms. He notes that competition in the health care market place has the potential to lower costs, but without adequate budget constraints, it may not succeed. 

He writes:

These competitive forces aren’t ever going to come into play without budget constraints in government health programs. Interestingly, a budget constraint is an important component of almost all major reforms, whether it involves premium support or Medicare for all.

I reached a similar conclusion after reading a CBO report a few months ago. CBO examined 10 major Medicare demonstrations aimed at enhancing the quality of health care and improving the efficiency of health care delivery and found that most of these programs have not reduced Medicare spending. It wasn’t that the incentives in those experiments were bad ideas as much as they often weren’t designed in any way to prevent savings leaking out somewhere else. More services or higher prices elsewhere can easily offset some particular efficiency improvement.

Click here to read the entire article.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.