Morning Must-Read: Peter Orszag: The Battle Over Douglas Elmendorf
The Battle Over Douglas Elmendorf–and the Inability to See Good News – NYTimes.com:
“Senator Kent Conrad… asked Mr. Elmendorf whether the legislation was likely to curb the growth in health costs, as its advocates asserted. ‘From what you have seen,’ Mr. Conrad asked, ‘do you see a successful effort being mounted to bend the long-term cost curve?’
Mr. Elmendorf’s answer was clear. ‘No, Mr. Chairman,’ he said. ‘We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.’ For anyone who remembered health care history, the moment was ominous….
Congressional Democrats knew that the budget office had the loudest voice, and their staff members got to work… to nudge the health care system away from paying for the quantity of medical care rather than the quality. Ultimately, the C.B.O. judged those provisions to be substantive. The Affordable Care Act would reduce the deficit in the long run, the budget office forecast….
A central plank of the anti-Elmendorf case is the notion that his budget office has underestimated health care costs. Senator Pat Roberts, the Kansas Republican, went so far this year as to call for a hearing on the subject. In reality, the Congressional Budget Office–like nearly every other group of health care analysts–has overestimated medical costs. We’re in the midst of a historic slowdown in the growth of medical costs…. The Affordable Care Act–specifically, those provisions meant to reward quality, like one that tries to cut down on needless hospitalization–plays some role in the slowdown…