Reform the reform studies
Everyone with a calculator has a reform law cost projection
The Patient Protection and Affordable Care Act, aka health reform, ought to be renamed the Number Crunchers and Report Writers Full Employment Act of 2010.
Scarcely a day goes by without a new study of the legislation, often by a special interest group with a stake in promoting or scuttling the measure. Depending on the source, these reports show the act will return us to the Garden of Eden, do nothing, precipitate the end of civilization as we know it or conjure up combinations of all three.
In the past week, we have seen one study predicting that reform will squeeze some insurers to the edge of bankruptcy and another suggesting that insurers will gain enough market clout to squeeze everybody else. To read more about the latter, see our “Of Interest” finance blog (“Who saves when insurers win?”) at modernhealthcare.com/blogs/of-interest.
Well, if no one else benefits from this law, at least it will provide serious economic stimulus for think tanks, economists, political operatives and just about anybody with a calculator and a willingness to make a prediction.
Meanwhile, the reports keep rolling in. Two recent ones from the Medicare trust fund trustees and the CMS project that the health reform law will extend Medicare’s solvency longer than previously predicted (Aug. 9, p. 12). The CMS report said reform would save Medicare $7.8 billion through 2011 and $418 billion over 10 years. The trustees’ report projected that the trust fund would remain healthy until 2029, 12 years longer than previously forecast.
Republicans, of course, immediately attacked the studies. Critics, political or otherwise, contended the reports made overly optimistic assumptions and overestimated the willingness of Congress to rein in spending on physician reimbursement.
News consumers should regard all these reports—whether from government or the private sector—with healthy (or healthcare) skepticism. Here’s a good example of why: According to mid-1990s reports from the Congressional Budget Office and the Medicare trustees, Medicare went bankrupt around 2001. As we can see, things change. The cacophony of cost projections brings to mind a 2008 New Eng
land Journal of Medicine article. In it, scholars David Blumenthal and James Morone recounted how President Lyndon B. Johnson handled adverse cost projections for the Medicare program he was trying to enact: He ignored or suppressed them. He feared estimates of a huge price tag would scare lawmakers and citizens away from something he believed to be good for the country.
The lesson? “The expansion of healthcare to large populations is expensive, and presidents may need to quiet their inner economists,” the authors wrote. “Johnson decided, in effect, to expand coverage now and worry about how to afford it later.”
Decades later, the Bush administration took a similar approach when it tried to put a lid on cost projections for the Medicare Part D drug benefit program.
None of this should excuse deceiving Congress and the public. But you can understand why policymakers who are actually trying to accomplish something (an increasingly rare breed) often grow intolerant of dueling calculators. Caught in a blizzard of contradictory predictions, it’s hard to get anything done.
We will see what this health reform law brings. In the meantime, a close relative of the law exists in the real world instead of the imagination of wonks. Look to Massachusetts for a glimpse of things to come.
And no matter what, we can be sure that wonks will follow a variation of the traditional advice to Chicago citizens: Vote early and often. In this case, it will be predict early and often.