Sunday, June 26, 2011

CBO: Do Nothing to Erase the Deficit


TJE said...

Has anyone in Congress signed up to oppose Doc fix?

Did you notice that now that it has insurance mandate, AMA wants to kill IPAB?

PBM said...

Not realistic for Congress not to raise doc fix, but possible with Tea Party House. I did not notice the AMA's flip, but I don't think the coalition that supported health care was going to be able to stick together for long.

Patrick_L said...

Yes, the CBO projections here include the Doc-fix not happening. Congress is welcome to not pass a doc-fix (unlikely), or offset the costs of that (roughly $300 billion over 10 years) instead so it can keep doing the doc-fix but reduce the deficit. It could be done entirely through health savings (Medicare, Medicaid)- tough, but doable. Or it could get the savings elsewhere. Either way, it's a great example of the need for Congress to return to the PAYGO mentality of the 1990's, a necessary step to restore fiscal discipline. Every policy change from now on should be paid for- that includes stimulus, the doc-fix, the expiring Bush tax cuts, the AMT, etc.

(In addition to that, we'd also want comprehensive entitlement and tax reform).

On the IPAB front, it isn't surprising that AMA is against the IPAB- like most American health care representatives actually in the industry including insurers, hospitals, etc. This isn't particularly surprising coming from the AMA, because there's increasing consensus that part of the reason why American health care costs are so much greater than other countries' is because physicians here engage in economic rent-seeking. IPAB’s possible interest in addressing that problem, which adds no value to the system but lines the pockets of physicians, unsurprisingly makes them nervous. In addition, the AMA disproportionately represents independent and small-group physicians, a model that is increasingly looking inefficient at cost-control or care quality, and so is something which IPAB might consider disincentivizing through payment reforms. I could go on and on about all the profits and income members of the AMA might be concerned would be threatened by the IPAB.