Premature Orszagism

A mostly political weblog.
June 5 2009 3:49 AM

Premature Orszagism

Annals of Orszagism: Virginia Postrel calls the Obama administration's bluff on health care costs. A White House Council of Economic Advisers report recently asserted  that

30 percent of Medicare’s costs could be saved without adverse health consequences.

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Postrel's answer: What's stopping you?

Medicare is a huge, single-payer, government-run program. It ought to provide the perfect environment for experimentation. If more-efficient government management can slash health-care costs by addressing all these problems, why not start with Medicare? Let's see what "better management" looks like applied to Medicare before we roll it out to the rest of the country.

This is not a completely cynical suggestion. Medicare is, for instance, a logical place to start to design better electronic records systems and the incentives to use them. But you do have to wonder why a report that claims that Medicare is wasting 30 percent of its spending thinks it's making a case for making the rest of the health care system more like Medicare.

I don't know that I agree with Postrel about postponing universal health insurance until we see what Obama's cost control strategy looks like, and what results it produces. People still need health care. But maybe we shouldn't base the Democratic position in the health care debate entirely on Orszagism-- the unproven theory that Obama's health care reform will reduce health care costs and help control the federal budget deficit  without adversely affecting health. ...

Update/Backfill: Orszag himself seemingly  claims not to be relying on Orszagism , at least for the "next five to 10 years," during which the administration is insisting its health care reform be "paid for." a) To make it "paid for," Orszag  is relying in large part on Medicare and Medicaid savings that are "scoreable ...over the medium term."  These include "strengthening Medicare and Medicaid payment accuracy by cutting waste, fraud and abuse; improving care for Medicare patients after hospitalizations" and some "$200 to $300 billion" in other reductions . Is it really clear that these savings will be reliably achieved (again, without adversely affecting health)?  And b)  is there then another whole overlay of "game changing" savings solutions--Orszag mentions something called"patient-centered quality research" and "re-orienting financial incentives through bundling"--that couldn't be applied to just Medicare and Medicad but rather require Obama's universal coverage? c) What about after 10 years? Orszag's charts show health care costs slowing their seemingly inexorable rise, thanks to his "game changers." But what if the game isn't changed, and costs keep going up--perhaps because medical science keeps inventing fancy new effective treatments that patients demand, perhaps even because universal health insurance has expanded the number of patients doing the demanding ? Then we are in deep budgetary trouble, which is why Ryan Lizza said "Obama is in effect betting his Presidency on Orszag's thesis." ...

Wouldn't it be more prudent to pay for health care expansion the old fashioned way--through tax increases and sure-thing program cuts, like ...  means-testing of Social Security ? Bonus political point: Dems couldn't be accused of wanting a health care plan as a way to let the government subtly or unsubtly limit treatments . ...

More: Orszag calls Postrel, Postrel responds . (Her final point: "The administration is beginning to realize that it overreached when it tried to spin health-care reform as a free lunch.") ... 1:15 A.M.

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