The head of the CEA gave a speech today regarding health care. One must remember that this is the same individual who so correctly predicted the economic impact of the Stimulus, thus we suspect that her prognostications are to be less than accurate.
However it is worth seeing what she says:
"The Senate Finance Committee bill includes a tax on high-priced insurance plans, suggested by Senator Kerry. A policy along these lines, designed carefully, will encourage both employers and employees to be more watchful health care consumers. It will discourage insurance companies from offering high-priced plans that would otherwise eat up larger and larger shares of workers’ wages. A policy such as this is probably the number one item that health economists across the ideological spectrum believe is likely to stem the explosion of health care costs."
When one analyzes the effect of the high cost plans they appear to impact Goldman Sachs and Union employees. For the most part Americans are on the budget plans. A high end plan is paid for by someone, the employer or even the individual. How taxiing them reduces costs has never been explained. They cover a small percentage of people and they do not in any way drive up demand or increase incidence. There just is no line around the block waiting for colonoscopies.
She continues:
"Several of the current versions of health insurance reform include sensible payment reforms for doctors, hospitals, and other providers participating in Medicare. For example, bundling payments for an episode of care associated with an acute event, such as a heart attack or a hip fracture, is a common-sense change. It gives doctors and hospitals the right incentives to provide patients with efficient and high-quality care, and the information they need to manage the transition back home successfully. These incentives improve patient care and outcomes,
while lowering costs in the long run."
As we have stated before and as we have detailed in our Book on Health Care the use of bundling will just memorialize the inefficient structure of hospitalized care and drive out physician based innovation. Bundled Care is a hospital controlled service and it forces collectives of low cost physicians which generally provide lowered levels of care. It maximizes the hospital's return.
She continues:
"Precisely because such reforms are so important for both cost containment and patient health, it is crucial to create an institutional structure that encourages and routinizes such innovations. That is why the President has endorsed the establishment of an Independent Medicare Advisory Council (IMAC). The IMAC would provide Congress each year with cost-saving recommendations that improve care and maintain benefits. By removing some of the political pressure around such reforms, the IMAC would make it easier for improvements to be made year after year..."
The IMAC in principle is not new for it is but a regeneration of what Medicare has been doing all along. By the time a person has gotten on Medicare two facts are clear. First they have contributed more than they will ever get back in benefits, the money having been spent by Congress. Second, the ability to modify any potential disease states is de minimus.
She continues:
"Recent CEA research suggests that the total fiscal impact of health care reform may be even larger than our baseline estimates suggest. As I have described, current draft legislation greatly expands access to health insurance coverage. This change is crucially important for state and local governments that currently pay for much of the care provided to the uninsured. Using a wide range of sources, including state reports, county records, and numerous phone surveys of local officials, the CEA has provided lower-bound estimates of the amount that sixteen states currently spend on care for those without insurance. We find that these sixteen states are spending at least $3.6 billion per year (in 2007 dollars) on this uncompensated care. We estimated that they are spending another $600 million on higher insurance premiums for state and local government employees because of the hidden tax uncompensated care adds to all private insurance premiums. All told, the states in our sample are spending at least $4.2 billion on care for the uninsured each year."
First one must see that these are CEA estimates which we have seen are less than worthless. Second her analysis grossly neglects the issue of reducing demand, such as that of Type 2 Diabetes due to obesity. Ms. Romer, we wonder why?
However it is worth seeing what she says:
"The Senate Finance Committee bill includes a tax on high-priced insurance plans, suggested by Senator Kerry. A policy along these lines, designed carefully, will encourage both employers and employees to be more watchful health care consumers. It will discourage insurance companies from offering high-priced plans that would otherwise eat up larger and larger shares of workers’ wages. A policy such as this is probably the number one item that health economists across the ideological spectrum believe is likely to stem the explosion of health care costs."
When one analyzes the effect of the high cost plans they appear to impact Goldman Sachs and Union employees. For the most part Americans are on the budget plans. A high end plan is paid for by someone, the employer or even the individual. How taxiing them reduces costs has never been explained. They cover a small percentage of people and they do not in any way drive up demand or increase incidence. There just is no line around the block waiting for colonoscopies.
She continues:
"Several of the current versions of health insurance reform include sensible payment reforms for doctors, hospitals, and other providers participating in Medicare. For example, bundling payments for an episode of care associated with an acute event, such as a heart attack or a hip fracture, is a common-sense change. It gives doctors and hospitals the right incentives to provide patients with efficient and high-quality care, and the information they need to manage the transition back home successfully. These incentives improve patient care and outcomes,
while lowering costs in the long run."
As we have stated before and as we have detailed in our Book on Health Care the use of bundling will just memorialize the inefficient structure of hospitalized care and drive out physician based innovation. Bundled Care is a hospital controlled service and it forces collectives of low cost physicians which generally provide lowered levels of care. It maximizes the hospital's return.
She continues:
"Precisely because such reforms are so important for both cost containment and patient health, it is crucial to create an institutional structure that encourages and routinizes such innovations. That is why the President has endorsed the establishment of an Independent Medicare Advisory Council (IMAC). The IMAC would provide Congress each year with cost-saving recommendations that improve care and maintain benefits. By removing some of the political pressure around such reforms, the IMAC would make it easier for improvements to be made year after year..."
The IMAC in principle is not new for it is but a regeneration of what Medicare has been doing all along. By the time a person has gotten on Medicare two facts are clear. First they have contributed more than they will ever get back in benefits, the money having been spent by Congress. Second, the ability to modify any potential disease states is de minimus.
She continues:
"Recent CEA research suggests that the total fiscal impact of health care reform may be even larger than our baseline estimates suggest. As I have described, current draft legislation greatly expands access to health insurance coverage. This change is crucially important for state and local governments that currently pay for much of the care provided to the uninsured. Using a wide range of sources, including state reports, county records, and numerous phone surveys of local officials, the CEA has provided lower-bound estimates of the amount that sixteen states currently spend on care for those without insurance. We find that these sixteen states are spending at least $3.6 billion per year (in 2007 dollars) on this uncompensated care. We estimated that they are spending another $600 million on higher insurance premiums for state and local government employees because of the hidden tax uncompensated care adds to all private insurance premiums. All told, the states in our sample are spending at least $4.2 billion on care for the uninsured each year."
First one must see that these are CEA estimates which we have seen are less than worthless. Second her analysis grossly neglects the issue of reducing demand, such as that of Type 2 Diabetes due to obesity. Ms. Romer, we wonder why?
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