Budget chief sees 'hard slog' on health
WASHINGTON -- Overhauling the nation's health care system won't easily lead to the long-term budget savings that President Obama hopes to achieve, the director of the Congressional Budget Office says.
Obama has said that "health care reform is entitlement reform," but he plans to use savings from Medicare and Medicaid over 10 years to extend health insurance coverage to millions of people.
In an interview Monday with USA TODAY, CBO Director Douglas Elmendorf said the cost to insure those people will continue to rise, and savings from efforts to curb health care spending may be elusive.
That's because some of the best ways to reduce costs — slashing Medicare payments to doctors and hospitals or limiting tax breaks for employer-provided health benefits — are politically difficult, Elmendorf said. Savings from changes sought by Obama and his allies in Congress — cutting costs in high-spending regions, expanding best practices and bundling services — won't be easy to achieve.
"There's tremendous potential to reap savings in the health sector without harming health, but turning that potential into reality is challenging," Elmendorf said. "It's going to be a long, hard slog." The director issued a similar cautionary warning to Congress in a report Tuesday.
The White House reacted positively. "It validates the administration's belief that health care costs are growing at an unsustainable rate, and that we cannot afford the status quo," said Kenneth Baer, spokesman for the White House budget office. As for CBO saying the potential savings might be limited, he said, "They have to be measured."
Obama has made the case for his health care initiative partly by urging cost controls. "The cost of our health care is a threat to our economy," he told the American Medical Association on Monday. "It's a ticking time bomb for the federal budget."
Wringing savings from the system will be difficult, Elmendorf said. For instance, although Obama recently called attention to huge regional variations in medical spending, the director said that's due to engrained ways of treating patients.
"That's how these differences seem to have developed," he said. "That ship cannot be turned on a dime."
Elmendorf's non-partisan agency will estimate the cost of every health care proposal. On Monday, it said insurance expansion proposed by Sen. Edward Kennedy, D-Mass., would cost $1 trillion and leave 37 million people uninsured.
Top Republicans on the congressional budget panels, who are opposed to Obama's health care overhaul, said Elmendorf is being an honest broker.
"The CBO has put up a lot of red flags about the whole approach to the health care reform effort," said Sen. Judd Gregg, R-N.H.
"We're creating an entitlement here that could easily rival the size of Medicare," said Rep. Paul Ryan, R-Wis. "History shows the pay-fors evaporate, but the expenditures continue."
Senate Budget Committee Chairman Kent Conrad, D-N.D., said Elmendorf's views won't hurt the overhaul effort. "It imposes a very useful discipline on the whole process," Conrad said. "Does it make it harder? Sure it does. Paying for things is hard."