an unanticipated consequence of
Jack M. Balkin
Jack Balkin: jackbalkin at yahoo.com
Bruce Ackerman bruce.ackerman at yale.edu
Ian Ayres ian.ayres at yale.edu
Mary Dudziak mary.l.dudziak at emory.edu
Joey Fishkin joey.fishkin at gmail.com
Heather Gerken heather.gerken at yale.edu
Abbe Gluck abbe.gluck at yale.edu
Mark Graber mgraber at law.umaryland.edu
Stephen Griffin sgriffin at tulane.edu
Bernard Harcourt harcourt at uchicago.edu
Scott Horton shorto at law.columbia.edu
Andrew Koppelman akoppelman at law.northwestern.edu
Marty Lederman msl46 at law.georgetown.edu
Sanford Levinson slevinson at law.utexas.edu
David Luban david.luban at gmail.com
Gerard Magliocca gmaglioc at iupui.edu
Jason Mazzone mazzonej at illinois.edu
Linda McClain lmcclain at bu.edu
John Mikhail mikhail at law.georgetown.edu
Frank Pasquale pasquale.frank at gmail.com
Nate Persily npersily at gmail.com
Michael Stokes Paulsen michaelstokespaulsen at gmail.com
Deborah Pearlstein dpearlst at princeton.edu
Rick Pildes rick.pildes at nyu.edu
Richard Primus raprimus at umich.edu
K. Sabeel Rahmansabeel.rahman at brooklaw.edu
Alice Ristroph alice.ristroph at shu.edu
Neil Siegel siegel at law.duke.edu
Brian Tamanaha btamanaha at wulaw.wustl.edu
Mark Tushnet mtushnet at law.harvard.edu
Adam Winkler winkler at ucla.edu
Back in 2007, wise wonks were already warning that the Congressional Budget Office could torpedo health reform. The CBO dealt Clintoncare a heavy blow by saddling it with huge cost projections -- and failing to take into account the savings the program would realize for individual citizens and the private sector. Current CBO director Doug Elmendorf has been riding a wave of notoriety as an objective "referee" in an increasingly bitter reform battle. But as his office's one-sided estimates enervate reform, it's beginning to risk its reputation for impartiality. Consider the following observations about CBO's work:
Bruce Vladeck: "The CBO’s track record in predicting the effects of health legislation is abysmal. Over the last two decades, the CBO has routinely overestimated the costs of expanded government health care benefits and underestimated the savings from program changes designed to reduce expenditures. Most recently, it overestimated the five-year cost of Medicare Part D — the prescription drug benefit — by more than 35%. Even more dramatically, the CBO’s estimates of the Medicare savings from the Balanced Budget Act of 1997 underestimated the impact, on average, by a full 100%. That’s right: In the BBA’s first three years, Medicare spending fell fully twice as fast as the CBO had projected."
Timothy Stoltzfus Jost: "[A] moment's reflection would lead one to realize that the CBO's guess that [a reform proposal] would save [only] $2 billion is about as worthless as an estimate that a loaf of bread will cost $5.65 in 2019, or a gallon of gasoline $4.73. Indeed, the CBO admits as much, stating that it actually believed the proposal would save nothing, but "there is also a chance that substantial savings might be realized." . . .[T]he media needs to stop reporting CBO reports as though they reflect the real costs of reform."
Maggie Mahar: "When I read Elmendorf’s testimony suggesting that the [House] bill wouldn’t bend the trajectory of federal health spending, I couldn’t help but wonder: Did he understand how the proposals in the 1,018 page bill dove-tailed with the excellent recommendations that the Medicare Payment Advisory Commission (MedPac) has made in recent years? Has Elmendorf read the lengthy MedPac reports?"
When respected experts like Maggie Mahar are wondering if Elmendorf has understood key literature in the area, something's gone wrong at CBO. The media's uncritical acceptance of his figures can only last as long as it fails to report the true complexity and uncertainty involved in both substantive reform and the do-nothing option that CBO's handiwork is unintentionally advancing.
The budget process systemically favors policies that let sick people die rather than incur future government-financed health costs [arising out of survivors' increased life expectancy]. Second, the process also structurally favors policies that keep expenses off the federal books by working through mandates rather than spending. Both of these problems should be addressed before the Congress considers universal coverage legislation.
The latter bias, toward mandates, systematically "fails to recognize financial benefits to non-government actors" that are realized via alternative routes to universal coverage. Even if a public health option saved citizens tens or hundreds of billions of dollars by competing with private insurers and driving down premiums, CBO couldn't factor such a boon to our economy into its solipsistic calculations. (And don't even think of asking it to quantitatively value the peace of mind and labor mobility such an option would generate.)
[Q]uantification grows from attempts to develop a strategy of impersonality in response to pressures from outside. Objectivity derives its impetus from cultural contexts, quantification becoming most important where elites are weak, where private negotiation is suspect, and where trust is in short supply.
Neverthless, Vladeck is right to argue that "instead of treating CBO estimates like the Ten Commandments, we should treat them like the informed wild guesses they actually are." If CBO fails to advance such disclaimers itself, it risks ending up as discredited as the bailout wizards of Wall Street. CBO's clinically depressive pessimism about health reform costs looks about as trustworthy as the manic assumptions of ever-rising home prices that fueled the banks' bogus boom.
There are also legitimate worries about Elmendorf's own possible political biases. Martin Feldstein, the director of the Council of Economic Advisers (CEA) under President Ronald Reagan, mentored him. Guess who came out today with a remarkably disingenuous opinion piece that simultaneously laments rising health costs and runs down the cost effectiveness research and government bargaining power necessary to rein them in? Even more astonishingly, Feldstein states that "there is already a very competitive private insurance market" -- despite David Balto's well-corroborated testimony that "few markets are as concentrated, opaque and complex" as private health insurance. If Elmendorf is still consulting with Feldstein on health matters, we have a lot to worry about -- especially if he's serious about cutting survivors' costs.