Health reform as proposed is too expensive to be sustained

In the rush to give President Obama a health reform bill lawmakers have ignored fiscal reality.  Douglas Elmendorf,Director of the Congressional Budget Office (CBO),  told theSenate Budget Committee that the health reform bill recently crafted  by the House failed to make any sort of fundamental changes that would be necessary to rein in skyrocketing costs of proposed government health program.

Medicare is particularly at risk, said Elmendorf. Rather than saving money with the proposal, the new bill would pile on expensive new programs allegedly to cover the uninsured.

It appeared the Elmendorf’s extremely blunt assessment took many of the Committee members by surprise.

Sen. Olympia Snow (R-Maine) who was being aggressively courted by the President to add a bipartisan flavor to a health reform bill,  has urged the President to slow down.  She asked the President to give up his August deadline so that the Senate Finance Committee could craft a new plan (another new plan) which would address cost controls.

Douglas Elmendorf was appointed Director of the Congressional Budget Office in January, 2009. He was a Brookings senior fellow from 2007 to 2009, and was a director of the Hamilton Project at Brookings

Mr. Elmendorf’s warnings were dire. He told the Committee that the changes that have been proposed thus far do not represent any fundamental change of the type and size which would be necessary to offset direct increases in federal spending for health care.

Elmendorf suggested the Congress look at changing the way Medicare reimburses providers to create incentives for reducing costs. Rewarding providers who order less costly tests would be one example of an incentive. Whether or not  that results in good medicine is an on going debate.