Sunday, July 26, 2009

CBO

Something is clearly missing in the ongoing discussion about Health Care Reforms in Washington, DC.

President Obama and his Budget Director Orszag tout the plan of having an independent panel to control costs of Mediacare with the premise that Congress is unable to control those costs for political reasons. The idea seems sensible and many in the public endorse that. However, House Speaker Pelosi and Committee Chairpersons like Waxman and Rangel are not very enthusiastic for such a proposal for the obvious reason of transfer of power from Congress to Administration. So there is an important political football going about how to achieve this. Administration is spending considerable political capital on that. Many in public too are campaigning for such an idea.

While this is happening, CBO head Elmendorf throws the bomb on Saturday that even this proposal will not save the cost. There are couple of issues here - to ask CBO whether such an arrangement will bring in the necessary saving to fund the cost of reforms is wrong in the first place and even for CBO to pretend that such a possibility is on table is equally wrong too. By now it should be clear to CBO that willingly or unwillingly it is a player in the football and it got to be quite clear / precise in their opinions here.

Basically proposed health care reforms have 3 aspects:
1. Administrative reforms where who gets care, how the care is delivered and rule of the game for insurance and insurance information delivery; all these things are finalized.
2. Everyone is mandated to have a health insurance and in the process large number of currently uninsured people need to be brought on roll for a price.
3. Finally, Fed renegotiates Medicare Fee structure as well as agreements with hospitals and drug companies to achieve savings to fund the above mentioned price. So far it seems Administration may have a handle on two third costs. What is getting hotly debated in Congress is how the remaining one third funds are to be collected - who will be taxed for the same.

The question is what is the assurance that the two third savings which Administration is proclaiming will indeed materialize? Further, what is the assurance that you may get all these savings but Medicare costs in other respects will not rise? So, both for ensuring these savings & controlling health care inflation as well as the delivery mechanism related reforms, there is a flexibility needed in how Medicare pays out the money and how Medicare operates. The idea is because Congress will not be any position to provide this flexibility, independent MedPAC (proposed iMAC) would provide that. The proposal of iMAC is essentially Obama/Orszag way of buying an insurance for realizing purported savings as well as the down payment for serious reforms in how health care is delivered in this country (because of the 'lead' role ofMediacare in setting the norms). It is a way for President Obama to set in motion a structure and process to continually 'bend the cost curve' of health care. When that is the case, is it not dis-ingenious to look at independent MedPAC as the source of funding in the first decade itself? Administration is responsible for failing to clarify that and CBO is more responsible for allowing to grow any such suspicion in the first place. Is it not CBO responsibility for all the raucous which will be created by such utterances? What do CBO want? Do they want any reform or to continue the high ground of criticizing Congress until America becomes bankrupt and Congress does not have any money to pay CBO then?

It should not be hard for the exact criteria and standards with which CBO wants to assess Congress bill are well published and well understood by Congress and Administration. Come on folks, we know that Washington is doing some complex stuff, but it is not rocket science. So many American engineers, scientists, project executioners handle more complex problems with multitude of internal and external agencies. So why is Washington failing in all this? Why CBO, Congress and Administration are not working out some of these details with out compromising independence of CBO? Current happenings clearly show a lack of even basic process between CBO and Congress.

Beyond a point, Americans know that they would differ the exact taxation decisions to Washington. But that does not mean Congress, CBO and Administration show some 'first grader' aptitude in solving this problem and just praise themselves at the the thought of how complex of a problem are they solving! For that, my advise - "damn it, solve the problem and do not squander your time, public's time and tax payers money in such hamd handed way". Is Washington aware that because of all consuming nature of these Bills so many serious other problems are ignored? Indeed, why North Koreans, even Washington is also behaving immature and like school children. Otherwise come Augsut and they would not have run away from their task of completing health care reform bills!

Current behavior from CBO demonstrates that even they are also not clean in all this affair. The loss of credibility of CBO was unavoidable and unfortunately that is going to strengthen hands of Rangel, Schumer who never in the first place wanted to listen to CBO. What have we brought by all this brawl? If Obamacare goes like Hillarycare, CBO and it's head Elmendorf would share lot of responsibility too.

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