Dean,

The CBO probably is correct. The bill as I understand it will continue the perverse incentives that are the hallmark of our medical service delivery system.

A concrete example is a lead story in Thursday's St. Paul Pioneer Press. http://www.twincities.com/localnews/ci_12847918?nclick_check=1
The local trauma specialty hospital opened a new ER. The first patient was a Medicare patient admitted for back pain. This quote says it all:

"She's been having back pain — since Monday anyway," said her husband, Galen Cain, 83, of Forest Lake.

Although Regions operates one of three major trauma centers in the Twin Cities, it is the Cains of the world with nagging injuries and illnesses who comprise most of the visits to the St. Paul hospital."

The cost of visiting the ER rather than a primary care provider is one of numerous factors contributing to escalating medical costs.

This is only one concrete example of the perverse incentives underlying our health care delivery system. Until they are addressed, we cannot expect to see much in the way of cost reduction.

To be fair, Elmendorf is the new CBO head. Wasn't his predecessor Peter Orszag, who is now Obama's advisor?

I used to read Orszag's blog. He was good at trends. His grasp of medical economics (the only time he tried to show it) seemed much more amateurish, I'm afraid.

But the basic issue is that the Democrats do not have good evidence that they can produce savings with a minimum of pain. Let's see a state do it well, before we take such enormous risks.

(And let's see them do something about patented drugs problem. Just to show they're honest.)

I don't get the point you were trying to make, Anonymous 1. If you mean that people are using ERs for routine care, that is true, but you don't explain why this is happening nor why it is the major cause of rising medical expenses. Is it because so many doctors now refuse to treat Medicare patients, so they have nowhere else to turn?

In short, you made a nonsense instead of a point about perverse incentives.

Best regards,
Carol

The point about ER visits versus preventative primary care is fine, but this is one issue that the healthcare reform legislation would address, by making primary care available to all - no?

As far as how the growth of costs plays out, nobody knows. It depends on how competitive a public option ends up being, and how competitive private insurers care to be with a public option. It's certainly possible that costs are contained much better than the CBO thinks.

patient renter wrote, It depends on how competitive a public option ends up being, and how competitive private insurers care to be with a public option.

No, what you're addressing only reflects costs stemming from inefficiencies in having a private health insurance market (vs govt, which is much more efficient).

While insurance is part of the problem, I claim more than half of the waste is in the medical system itself. I assume the reform proposal helps somewhat, but I seriously doubt it helps a lot, because to do that you'd have to have rationing. Rationing is good, IMHO---in fact, it would likely improve outcomes by eliminating unneeded care, much of it dangerous---but people seem to think they're entitled to as much treatment as they want, regardless of whether it's good from a public health perspective or reasonable from a cost/benefit perspective.

Dean,
You are shooting the messenger. Ex-Director Orzag has been very clear about unsustainable health costs in the future. The CBO analysts who analyze the data are probably the same ones who worked under Orzag. Why should we not trust their analysis now? I say, accept it and move on. Over time, it'll only prove single payer (with the type of rationing that liberal suggests) is the only real alternative..

Vara

Un-reimbursed ER care is a very small portion of total healthcare costs.

How is "unreimbursed ER care" defined? It is not the same as inappropriate ER care that should have gone to a primary care provider, and it also might include reimbursement that had to come using additional administrative resources from somewhere other than insurance that follows the patient.

And what is a "small portion"?

This is what Elmendorf stated in the actual letter to Chairman Rangel:

According to CBO’s and JCT’s assessment, enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period.

That estimate reflects a projected 10-year cost of the bill’s insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those 10 years.

By the end of the 10-year period, in 2019, the coverage provisions would add $202 billion to the federal deficit, CBO and JCT estimate. That increase would be partially offset by net cost savings of $50 billion and additional revenues of $86 billion, resulting in a net increase in the deficit of an estimated $65 billion.

http://www.cbo.gov/costestimates/health.cfm

At this point, it seems that the only provision of the Baucus/OBama health care reform is the mandatory health insurance requirement. The industry and care providers' mouths are watering in anticipation of the forced entry of every American, and here's the good part, forced to pay (extortion) the 25 - 35 % of total health care costs to the so called insurance providers.

The progressives are rolling over, accepting a universal system as victory, even if it is worse than the present system.

The public option is the only thing that stands between an effective health crae system and the industry's dream of a legislated monopoly, akin to the financial deregulation that has served us so well.

Throw the money changers from the temple.