Health care: The actuary’s new estimates

Media world is atwitter with the new actuarial analysis of Obamacare. Kaiser Health News summarizes here.

As anytime politics is involved, the left and right start fighting.

Typical from the right is this National Review Online blog post, which notes the legislation:

  • Will increase health care spending.
  • Creates costs controls that probably won’t work.
  • Creates a long-term care program that’s  saddled with adverse selection from Day One.

Typical from the left is Ezra Klein, blogging for the Washington Post, who responds:

  • Duh, what do you expect when you add 34 million people to the insurance rolls?
  • I think the cost controls will work.
  • <crickets chirping>

Part of this is the typical left-right banter. But another part is poor communication coming from CBO and Medicare’s Office of the Actuary.

Those two parties are the key arbiters of health care reform. CBO focuses more on federal spending and revenues and tries to estimate what will happen to the deficit. The actuary looks at that but also looks at national health expenditures – how much the public, private and personal sector pay for insurance and out-of-pocket costs.

That said, they are still looking at the same bill and each knows the other is out there. They agree on some things and disagree on some others. But so far as I know, neither is interested in bridging the gap. I’ve found no official apples-to-apples comparison of what CBO says, vs. what the Actuary says. No explanation from either party why its estimate differs from or is similar to the other. (If you find one, send me the link and I’ll happily do a mea culpa.)

You know, that’s not asking for much. Whenever I’ve gone to senior management with a piece of information that I knew contradicted something they had seen before, I made damn sure I understood what the difference was (“Well, boss, the consultants said $18 million, but we say $14 million.”) and why the difference was (“They failed to adjust for the 2009 agriculture treaty, which as you know won’t develop since we received the last bordereau in June.”)

In fact, one of the biggest jobs of upper management is creating a continuous link between what management knew last week or last month and what it knows today. When you are talking about $35 trillion in national health-care spending over 10 years, that’s inexcusable.

Actuary’s report is here. Latest from CBO is here.


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