OK

First we had AP's zombie numbers, and now we've got cable news, and conservative pundits, all abuzz about testimony yesterday afternoon from CBO Directo about the healthcare reform bills in the works.

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes" necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

His statement has been trumpted all over the news, but unfortunately, the traditional media isn't reporting anything beyond that statement, including follow-up testimony to the House Ways and Means Committee in which he walked his statement back. The blogospherci healthcare wonks give you the full story that doesn't fit into the traditional media's narrative. First, Jonathon Cohn:

The key thing to remember about Elmendorf's remarks is that CBO has, so far, seen just two pieces of legislation. One is the bill that the Senate Health, Education, Labor, and Pensions (HELP) Committee passed earlier this week. That bill doesn't include the types of reforms that would make a big difference in long-term spending trends, but that's mostly a function of jurisdiction. HELP can't touch Medicare or Medicaid, nor can it fiddle with the tax code. Yet it's through those two levers Congress would most likely influence the growth in health care costs. (It remains to be seen what the Senate Finance Committee, which has that jurisdiction, will do.)

The other piece of legislation CBO has seen--the bill produced by three House committees working together--is another story. That's a complete bill, including Medicare, Medicaid, and the tax system. And the experts who have studied the language closely--or, at least, those I've contacted in the last few days--seem to agree with Elmendorf: The bill, they say, doesn't include the sorts of big reforms that would reduce costs significantly.

But that bill is still very much a work in progress, as House leaders themselves acknowledge. And the White House, among others, has some ideas about how to shape it.

Despite a vow not to draw lines in the sand about reform legislation, President Obama has been adamant that any bill make substantial progress on cost reduction--a pledge his Budget Director, Peter Orszag, reiterated in the course of a brief (and previously scheduled) interview he gave TNR Thursday afternoon. "The legislation that emerges from this process has to contain key provisions that will bend the curve over the long term," Orszag said. "The president has said that and we're in the middle of a legislative process, so it's not surprising that, as you go through that process, there are modifications that are necessary."

Igor Volsky has more:

Part of Elmendorf’s message is painfully obvious: investing in health care reform by providing Americans up to 400% of the federal poverty line with subsidies is going to cost the federal government a good deal of money — somewhere between $1 trillion and $1.5 trillion, to be exact. Progressives have always argued that in order to reduce the growth of health care costs in the long term and avoid the kind of catastrophic spending levels that could swallow-up our entire economy, we’re going to have to bring everyone into the health care system. As Elmendorf points out, that shows up on the federal books.

But the budget outline that passed the Senate Budget Committee requires a fully funded health reform bill, and both the Senate Finance Committee and the House Ways and Means Committee are proposing different options to pay for reform and ensure that the bill does not add to the deficit. For his part, Elmendorf, is isolating the ledger of the federal government from the context of the entire system. In other words, since many of the savings from reform won’t be reflected in the federal budget, Elmendorf does not consider them. But modernizing the health care system (implementing electronic medical records, health information technology) and reforming the way Medicare and Medicaid reimburse providers will save money for the system as a whole. As Melinda Beeuwkes Buntin and David Cutler pointed out in a recent analysis, these savings can total to some $2 trillion. In fact, even the industry is on record as saying we can reduce the growth rate in annual health spending by 1.5 percentage points a year over the next 10 years, lowering spending overall health care spending by $2 trillion (this represents a 20 percent reduction in projected growth.) Elmendorf is looking at the trunk of the elephant and not the whole....

In testimony before the House Ways and Means Committee, Elmendorf walked back his comments, saying that in some ways federal spending will increase and in some ways it will decrease. When pressured by the Republicans on the committee, Elmendorf did not directly confirm his accusations.

And finally, Ezra has some rules for politicians and reporters using Elmendorf's quote:

Politicians who are going to use this CBO report against the existing health-care reform proposals must do some combination of the following:

a) Support, as the CBO says you should, the eradication of the tax exclusion that protects employer-based health-care insurance;

b) Support, as Lewin and Commonwealth say you should, a public insurance option that can bargain at Medicare's rates;

c) Support, as the Office of Management and Budget and every health-care wonk in town says you should, one of the various policies floating around to give MedPAC authority to continually reform and modernize Medicare;

d) Support some form of aggressive cost-sharing that would make people extremely angry because it will save money by reducing their access to health-care services;

e) Support comparative effectiveness review that can judge not only the effectiveness but also the cost-effectiveness of various treatments, and give the federal government authority to use that data when deciding reimbursement rates.

I would also like to propose a related rule: any reporters who receive a quote from a politician referencing this CBO score should be required to ask the politician which of these policies -- or which alternative cost-saving policies -- they support.

This is complicated, expensive, and confusing business. But those reporting on it, and those serious about actually making real reform--reform that's worth doing, owe it to all of us to give us the full story.

Originally posted to Daily Kos on Fri Jul 17, 2009 at 10:56 AM PDT.

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