CBO’s score: Cloudy with a chance of bankruptcy
–Peter J. Pitts is President of the Center for Medicine in the Public Interest. The views expressed are his own. –
Today, the Congressional Budget Office released its latest estimate of the price tag of the Democrats’ health reform package. At $940 billion, this version of reform will cost more than the measures passed by the House and Senate late last year. More is not always better.
CBO also says the bill will reduce the deficit by $130 billion over the next 10 years and by $1.2 trillion over the following decade. That’s right. It will reduce the deficit by significantly increasing federal spending. Only in America.
While they’re at it, they should also predict the weather for the next decade.
Let’s face it: Uncle Sam has a poor track record of forecasting how much new programs will cost. Medicare’s progenitors, for example, stated in 1967 that the entitlement would cost $12 billion by 1990. Actual Medicare spending in 1990 amounted to $110 billion — nearly 10 times the initial estimate. Oops.
CBO’s deficit-reduction estimates are further divorced from reality because they don’t include as much as $371 billion in new spending to fix reimbursement rates for doctors who treat Medicare patients. Imagine that — health reform legislation that doesn’t include payments to doctors. Only in Washington, DC.
Absent congressional action, Medicare reimbursement rates will fall 21 percent next year. Congress has no intention of letting that happen. But the Democrats have decided that they don’t have to include this so-called “doctor fix” in their healthcare reform package — even though it’s critical to preserving Medicare.
Reduce the high cost of medical malpractice
–- Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. –-
The next time you take your child to a doctor, scrutinize carefully the doctor’s bill. What it won’t tell you is that an average of 10 cents out of every dollar you pay goes to the malpractice insurance doctors must have to protect themselves in case a patient sues them.
Malpractice premiums cost some doctors many tens of thousands of dollars a year, not because an individual doctor has a history of making mistakes, but because in some states juries make excessively generous awards knowing that insurance companies pay.
Medical specialties with the highest premiums include obstetrics and neurosurgery. Malpractice insurance premiums for obstetricians range from $200,000 per year in high-cost states to $20,000 annually in low-cost states. Resolving a suit takes at least three years, taking physicians’ time away from the practice of medicine.
According to Towers Perrin, a global professional services firm, malpractice litigation costs $30 billion a year, and, since 1975, direct costs of litigation avoidance have grown at more than 10 percent annually.
But that’s less than half the story. To avoid being sued, doctors view patients with two sets of eyes. One set is the caring, compassionate, medical professional. The other set is a defensive strategist, looking at an individual who tomorrow may call a lawyer to sue. And, to be fair, sometimes doctors make avoidable, even negligent mistakes and injured patients are entitled to be compensated for their losses, and perhaps for some pain and suffering.
The defensive strategist dominates medical practice today. Doctors use excessive tests and other procedures to avoid lawsuits, and stay out of certain areas of medicine—most notably obstetrics. The net result is higher costs for medical care.
In the US we have about 1,100,000 lawyers; the number of trial lawyers and corporate lawyers engaged in medical malpractice field I estimate at about 100,000. We have a system of justice where anybody can sue anybody and, if losing, can just walk away. Great Britain, Japan, and Germany have a total of some 35,000 lawyers; how come? Well, in those countries when you sue somebody and lose you automatically must pay all the costs of the defendant and of the courts, direct and indirect. Since the trial lawyers here carry the Democrat Party in their pockets there is no hope on any tort reform in the future. Total cost of health care is about $2.6 trillion/year; the cost of malpractice insurance and unnecessary defensive medicine tests is at least 25% of that total. We need tort reform more then we need what the Democrats have cooked up under the phony name of health care reform – which is government takeover applied in steps over the next 10 years.
Immigration can speed economic recovery
– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. –
It’s welcome news that President Obama will turn his attention to immigration reform this year, as was announced on Wednesday by Deputy Assistant to the President Cecilia Muñoz. Economic recovery will happen more quickly if both high- and low-skill immigrants are permitted to enter the United States and work legally.
Two years ago, when Congress was considering comprehensive immigration reform, both President Bush’s Council of Economic Advisers and the Congressional Budget Office, headed by Peter Orszag, an economist closely identified with the Democratic Party, estimated that the benefits of additional immigrants outweighed the costs. If Congress allowed more immigration, then American taxpayers would come out ahead financially.
Yet, after Congress refused to pass President Bush’s plan to allow most undocumented workers to receive work visas and wait in line for citizenship, the Bush administration’s immigration policy deteriorated into a series of arbitrary raids on different companies, rounding up undocumented workers and deporting them, in many cases separating husbands and wives, parents and children.
We can do better. Although the unemployment rate reached 8.5 percent last month, the jobs are going to come back, and, as has been the case in the past, native-born Americans will want jobs that are different from those of immigrants, according to economics professor Giovanni Peri of the University of California at Davis.
Congress needs to overhaul immigration law and create an expanded temporary worker program with a path to citizenship, along with more verification to prevent workers from working illegally, and monitoring of tourists and students so that they do not overstay their visas.
Does it really matter whether the wall against the much much less affluent is built territorially? The pressure to reduce our standard of living, what a vaguely defined idea – is still there. This country doesn’t live on another planet. If the presure doesn’t come from within -it will come from without. Won’t it!
IT doesnt matter what side of the political spectrum describes the problem, the medical bills seem to doom any fix. I haven’t been able to afford it in years and at $1500/year and climbing I never will again. I called it quits when it passed $1500/year over 15 years ago.
I know people who hate illegal immagrants because they are themselves less productive, due to old age and ill health, and appreciate that they are in fact less valuable to the country than the able bodied and fully productive that are replacing them. They know they are not needed, are a burden on the system and were paid more their whole life than those who are replacing them. They may very well be costing the system more now than they were paid. Rather like decommsiioned old nuke plants, they cost more to dispose of then they actually were avble to produce during their working lives.
That’s where all the hatred is coming from and it do well for most of us to be more polite about the writer – she is only pointing out the situation. But it is obvious that she is proposing to write off a lot of the marginal citizen population in favor of fance jumpers and basically more ruthless but also brave and/or desperate, fresher, hungrier and more capable, illegal immagrants.
It’s such a stinking, raw and obvious statement about the tenuous grasp so many of us have on the homeland. I credit her with being somehwat “compassionate” but in a way that could well be strained to the point of raw violence as this situtauion is when seen in other countries of the world.
I think her point of view will win but the man who described the true bottom line – many of the new legals – if they ever become so, will quickly go either to the first class and the rest will still stay in steerage with a lot of native borns. Considering that productive labor in this country, both legal and illegal, is still surrounded by billions of much lower paid people whether they ever neter this country, will still pull the cost of living down and the age is driving the cost of actually being productive (profitable to the system) doesn’t look like it will ever be fixed.
The economist doesn’t mention the percentage of new immagrants destined for the upper decks and how many go down with the ballast? Rich people don’t keep many servatnst any more. They have been too expensive for almost a century.
My immigrant grandparents didn’t have health insurance. The system prospered because in many ways they were largely exploitable livestock with working brains.
Mr Pitts argues by ridicule rather than by facts and analysis. Only in America. He challenges the idea that increasing government spending can result in a net cut in the deficit. He does this on behalf of a party that has argued since 1980 that cutting taxes will increase revenues. An idea can be counter-intuitive and still be correct.
I would have been interested to see a real analysis of the accuracy (or, I suspect, lack of accuracy) in CBO estimates. That is why I read the article. The best I got was one anecdote from 1967 about the cost of Medicare estimate for 1990. Did Mr. Pitts correct for inflation and for the extraordinary, unexpected run-up in the cost of health care as a % of GNP from 1967 to 1990? He did not, although those were the main reasons the 1965 estimate was so far off.
I look for both analysis and opinion in such columns, but found neither here. What I found was slurs, smog and misrepresentations. Am I on the Reuters site, or have I become lost in Murdoch land?