Before leaving the Congressional Budget Office (CBO) to become Obama’s budget director, Peter Orszag tallied up the growth of entitlements. Medicare and Medicaid are expected to swell to $1.4 trillion, or nearly 30% of the federal budget within 10 years.
The Democrats’ response is to pile on more obligations. Allowing the non-poor to buy into Medicaid would cost $7.8 billion over 10 years. In addition, one plan to make both private and public options less costly for the beneficiary would add $65.5 billion, and having the government pay higher cost claims would hit $752 billion.
Adding up all 115 proposed reforms would be $150 to $200 billion per year in recurring obligations (“Orszag’s Health Warning,” Wall St J 10/29/08).
During the campaign, Obama’s health advisors said that they could actually save the average American household $2,500 per year through reforms such as coordinated care, preventive care, evidence-based care, pay for performance, electronic medical records, etc. The bad news from CBO: the maximal savings from all of the above would be 1% of what the Obama team projected—or nothing at all (John Goodman 1/9/09).
Reformers still cling to the technical approach, although it doesn’t work, because they think doctors are the problem. Their solution is to induce, bully, or coerce doctors into practicing medicine in predetermined ways.
The ever-popular computerization fix only makes medical inflation worse. UCSF economist Robert Miller pointed out that doctors who successfully install computer systems end up collecting more, not less, for their services. And the computers may make quality worse—for example, by generating so much “alert spam” that doctors routinely ignore warnings. Also, doctors may come to rely on pre-written templates of information that lack important individualized details (Lee Gomes, Forbes.com 1/12/09).
Looking at the seriousness of the problems with health information technology in the UK’s National Health Service, some recommend a moratorium on ambitious EMR plans during the current economic downturn. “There are millions of uninsured and underserved people in this country who would benefit far more tangibly from funding of healthcare services rather than funding of ambitious health records projects that transfer scarce capital from the healthcare to the IT sector” (Health Care Renewal 11/13/08).
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