There was a great story about Congressional Budget Office Director Doug Elmendorf and the difficult position he’s in regarding CBO’s job of “scoring” health care reform, in today’s Washington Post. The story’s explanation of CBO’s history and reputation, combined with the wit of a former director, leads to the title of this post.
Why is scoring the cost of health care reform so difficult? Both because of the technical challenges (we can’t look to past experience) and because of the political challenges (who wants to rain on a very popular president’s parade?). As reporter Lori Montgomery, and Doug himself, explain:
The point on which Elmendorf’s opinion is most eagerly awaited is whether changes in the delivery of health care — more prevention, better information, closer coordination among doctors — can wring some of the waste out of a system expected to consume nearly $2.3 trillion this year. Reformers argue that up to 30 percent of that spending does little to improve health. If it were eliminated, the savings could be used to cover the 46 million Americans who lack insurance.
The problem is that nobody knows exactly how to eliminate that spending. And so far, the CBO has proven unwilling to assume big savings from popular reforms, such as computerizing medical records and studying the comparative effectiveness of various treatments. The CBO has estimated, for example, that requiring doctors and hospitals to use electronic records would save the government only about $34 billion over the next decade — a small fraction of the overall cost of reform, which is expected to exceed $1 trillion…
Elmendorf acknowledged that health reform is especially challenging. The CBO is much better at measuring incremental changes than measuring fundamental reforms, which, by their nature, require the agency to make decisions based on scant or preliminary evidence. A team of 50 people is working on health reform, in consultation with a panel of 21 outside experts. All recognize the fine line the CBO must walk, Elmendorf said.
“It would be wrong for us to be conservative, in the sense of tilting toward zero, because we don’t know” how much money an idea might save, Elmendorf said. “On the other hand, we need to not get swept up in the enthusiasm for some new idea, because not every new idea works.”