"My colleagues, this is our opportunity to make history," Chairman Max Baucus implored last week as the Senate Finance Committee opened consideration of his bill. Politicians, in their most self-important moments, see themselves as instruments of national destiny. They yearn to be remembered as the architects and agents of great social and economic transformations. They want to be at the signing ceremony; they want a pen.
Ordinary Americans are rightly suspicious of this exercise in collective ego gratification, which has gripped Obama and many of his congressional allies. Even when the goals are worthy -- as they are here -- the temptation to exaggerate, simplify and sugarcoat often proves irresistible. Baucus's promotion of his handiwork is a case in point.
One study "found that every year in America, lack of health coverage leads to 45,000 deaths," he told the committee. "No one should die because they cannot afford health care. This bill would fix that."
There was more. "These reforms would give Americans real savings," Baucus said. The Congressional Budget Office "tells us that the [insurance] rating reforms and exchanges in our proposal would significantly lower premiums in the individual market." As well, the bill wouldn't increase the budget deficit and "starts reducing the deficit within 10 years."
If only all this were irrefutable. But Baucus's claims are shaky. It is questionable whether more insurance would save 45,000 lives a year. Unfortunately, just having insurance doesn't automatically improve people's health. Sometimes more medical care doesn't really help. Sometimes people don't go to doctors when they should or follow instructions (take medicine, alter lifestyles). Indeed, many people don't even sign up for insurance to which they're entitled. An Urban Institute study estimated that 10.9 million people eligible for Medicaid or the Children's Health Insurance Program in 2007 didn't enroll.
The 45,000 figure cited by Baucus is itself an unreliable statistical construct built on many assumptions. It's based on a study of 9,004 people ages 17 to 64 who were examined between 1988 and 1994. By 2000, 351 had died; of these, 60 were uninsured. The crude death rates among the insured (3 percent of whom died) and uninsured (3.3 percent) were within the statistical margin of error. After adjustments for age, income and other factors, the authors concluded that being uninsured raises the risk of death by 40 percent. They then extrapolated this to the entire population by two techniques, one producing an estimate of 35,327 premature deaths and another of 44,789.
This whole elaborate statistical edifice rests on a flimsy factual foundation. The point is not to deny that the uninsured are more vulnerable (they are) or that extra insurance wouldn't help (it would). The point is that estimating how much is extremely difficult. Advocates exaggerate the benefits. Remember: Today's uninsured do receive care.
What about lower insurance premiums? Here's the actual CBO analysis: "Premiums in the new insurance exchanges would tend to be higher than the average premiums in the current-law individual market -- again with other factors held equal -- because the new policies would have to cover pre-existing medical conditions and could not deny coverage to people with high expected costs for health care." The CBO added that it couldn't predict premiums because so many factors might influence them.
It's true, as Baucus says, that the CBO estimated that new taxes and Medicare savings would cover the costs of his original bill. But many Medicare "savings" are probably phony. Congress is likely to reverse them, as in the past. Put in that category about $200 billion in "savings" over 10 years from lower reimbursement rates for doctors (under the "sustainable growth rate" formula). Congress has repeatedly prevented those cuts from occurring. A separate $180 billion in "savings" from lower reimbursement for hospitals and other providers are similarly suspect. Together, these items provide about half the plan's financing.
Americans worried about this legislation may not know its details or may even be misinformed. Still, their skepticism is justified. Grandiose rhetoric obscures unflattering reality. The proposals don't force the major structural changes in the delivery system that might curb uncontrolled health spending, which is the central problem. The bills that Congress is considering might marginally improve Americans' health but would worsen the federal budget outlook and squeeze other public and private spending. Whatever bragging rights result will quickly erode in the face of the health system's continuing problems.
Ordinary Americans are rightly suspicious of this exercise in collective ego gratification, which has gripped Obama and many of his congressional allies. Even when the goals are worthy -- as they are here -- the temptation to exaggerate, simplify and sugarcoat often proves irresistible. Baucus's promotion of his handiwork is a case in point.
One study "found that every year in America, lack of health coverage leads to 45,000 deaths," he told the committee. "No one should die because they cannot afford health care. This bill would fix that."
There was more. "These reforms would give Americans real savings," Baucus said. The Congressional Budget Office "tells us that the [insurance] rating reforms and exchanges in our proposal would significantly lower premiums in the individual market." As well, the bill wouldn't increase the budget deficit and "starts reducing the deficit within 10 years."
If only all this were irrefutable. But Baucus's claims are shaky. It is questionable whether more insurance would save 45,000 lives a year. Unfortunately, just having insurance doesn't automatically improve people's health. Sometimes more medical care doesn't really help. Sometimes people don't go to doctors when they should or follow instructions (take medicine, alter lifestyles). Indeed, many people don't even sign up for insurance to which they're entitled. An Urban Institute study estimated that 10.9 million people eligible for Medicaid or the Children's Health Insurance Program in 2007 didn't enroll.
The 45,000 figure cited by Baucus is itself an unreliable statistical construct built on many assumptions. It's based on a study of 9,004 people ages 17 to 64 who were examined between 1988 and 1994. By 2000, 351 had died; of these, 60 were uninsured. The crude death rates among the insured (3 percent of whom died) and uninsured (3.3 percent) were within the statistical margin of error. After adjustments for age, income and other factors, the authors concluded that being uninsured raises the risk of death by 40 percent. They then extrapolated this to the entire population by two techniques, one producing an estimate of 35,327 premature deaths and another of 44,789.
This whole elaborate statistical edifice rests on a flimsy factual foundation. The point is not to deny that the uninsured are more vulnerable (they are) or that extra insurance wouldn't help (it would). The point is that estimating how much is extremely difficult. Advocates exaggerate the benefits. Remember: Today's uninsured do receive care.
What about lower insurance premiums? Here's the actual CBO analysis: "Premiums in the new insurance exchanges would tend to be higher than the average premiums in the current-law individual market -- again with other factors held equal -- because the new policies would have to cover pre-existing medical conditions and could not deny coverage to people with high expected costs for health care." The CBO added that it couldn't predict premiums because so many factors might influence them.
It's true, as Baucus says, that the CBO estimated that new taxes and Medicare savings would cover the costs of his original bill. But many Medicare "savings" are probably phony. Congress is likely to reverse them, as in the past. Put in that category about $200 billion in "savings" over 10 years from lower reimbursement rates for doctors (under the "sustainable growth rate" formula). Congress has repeatedly prevented those cuts from occurring. A separate $180 billion in "savings" from lower reimbursement for hospitals and other providers are similarly suspect. Together, these items provide about half the plan's financing.
Americans worried about this legislation may not know its details or may even be misinformed. Still, their skepticism is justified. Grandiose rhetoric obscures unflattering reality. The proposals don't force the major structural changes in the delivery system that might curb uncontrolled health spending, which is the central problem. The bills that Congress is considering might marginally improve Americans' health but would worsen the federal budget outlook and squeeze other public and private spending. Whatever bragging rights result will quickly erode in the face of the health system's continuing problems.
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