The CBO Wants to Discuss Healthcare and the Deficit?
The CBO Wants to Discuss Healthcare and the Deficit?
(from run75411)
Someone struck a nerve, “The Lady Doth Protest Too Much: CBO Director Asks for A Chat . . .”. Yves Smith at Naked Capitalism received an interesting email after a voice mail from the Associate Director of Communications for the CBO:
Greetings, Susan.
I am following up on my voicemail to see if we can arrange a time either today or sometime this week for you to speak with our director, Doug Elmendorf. He wanted to speak with you about your blog post “Fed Budgetary Experts Demolish CBO Health Models, the Lynch Pin of Budget Hysteria” that appeared Sunday on Naked Capitalism regarding CBO.
I am copying Brianne Hutchinson, Doug’s executive assistant, who will work with you to find a convenient time for the call. You can reach Brianne by e-mail or directly at: 202-226-2700.
We look forward to hearing back from you at your convenience.
Kind regards,
Deborah
Deborah Kilroe
Associate Director for Communications
Congressional Budget Office
2nd and D Streets, SW
Washington, DC 20515
Recently, Dan posted some of my earlier conversation with Yves and other participants on her post’s thread “Healthcare Spending Growth in the US” at Naked Capitalism . Yves’s post pointed to a recent paper completed by Glen Follette and Louise Sheiner examining and challenging the CBO analysis of healthcare costs as a percentage of GDP An Examination of Health-Spending Growth in the US. Simplified, what the study is found Healthcare growth as a percentage of GDP is sustainable at 1% which is precisely what Obama and even Romney used in their limiting factor for healthcare costs.
Read more at Health spending growth in the US at Angry Bear.
From 2000 to 2012, US war spending went to 5% fairly rapidly and has stayed there. Overlay it on SS spending, and one will see a doubling of the war burden while SS went up fractionally in the CBO study period.
Why is war spending not considered an issue?
Likely “unwarranted influence of military industry complex.
A feature of the unwarranted influence is to try and keep the excesses of war spending hidden.
The military industry complex is 50% too large including the part not run by the DoD.
Check out CATO:
http://www.cato.org/publications/commentary/lies-damned-lies-defensejob-statistics
From this point forward I am renaming healthcare spending growth to Healthcare Stimulus Spending. Yes it can be made more efficient, and I do believe in a national plan of some sort.
However, why do we want healthcare austerity. Its a field with good paying jobs? Demand will go up because of an aging population, there is not much way around this.
Grow the rest of the economy and healthcare declines as a % of GDP. Healthcare austerity will not help grow the economy.
McWop:
Healthcare can do nicely at 1% of GDP growth annually and still not overwhelm consumer spending on other things and also as a percentage of GDP.
Jobs are scheduled to grow in the Healthcare sector as well.
“The health care and social assistance sector is projected to gain the most jobs (5.6 million), followed by professional and business services (3.8 million), and construction (1.8 million). Despite rapid growth in the construction sector, employment in 2020 is not expected to reach its pre-recessionary annual average peak of 7.7 million in 2006. (See table 2.)
About 5.0 million new jobs–25 percent of all new jobs—are expected in the three detailed industries projected to add the most jobs: construction, retail trade, and offices of health practitioners. Seven of the 20 industries gaining the most jobs are in the health care and social assistance sector, and five are in the professional and business services sector. (See table 3.) http://bls.gov/news.release/ecopro.nr0.htm Employment Projections 2010-2020″
Making healtcare more effective with better outcome helps to eliminate the waste in the system, enough so, it will pay for the babyboomwers.
Run thanks for the reply and the stats – good stuff. I think the central questions is if health care actually crowds anything out. I guess it can if we place policy restraints on what we think it should cost.
Most old people fall into the national plan for people 65+, and if a bubble of people push up costs that we deficit spend for, then I don’t see that mechanically crowding anything else out. Once this bubble passes on we may have healthcare overcapacity (assuming we spend enough now).
My biggest concern is if we will have enough healthcare labor and infrastructure to provide the needed services. With my parents dementia, the experience is we have nowhere near enough.
Study this.
http://www.cbo.gov/publication/41463
Most of the decimation of Clinton’s surplus was from increases in discretionary spending the war etc. Not health or SS outlays. The rest was revenue losses from tax cuts, explained by the suppressed Sep 12 CRS report.
McWop:
Over a decade ago and probably in my late forties, I got one of these flyers AARP on Nursing/Assisted Home Care. For like $12 and $14 a month we would have either for a period of 4 years or about as long as the amount of time you live after being admitted. Right now it is at $20 and $18 a month and pays out at $90 per day. Add this to SS and it is enough to get us into a descent home. We are one of the fortunate ones I guess as we have something besides Medicaid and SS. It is not much; but, it can make a difference.
My 1% stat comes from here: http://www.bancaditalia.it/studiricerche/convegni/atti/fiscal_sustainability/session_3/Follette%20Sheiner.pdf “AN EXAMINATION OF HEALTH-SPENDING GROWTH IN THE UNITED STATES: PAST TRENDS AND FUTURE PROSPECTS” Glenn Follette and Louise Sheiner
This I the Fed report challenging the CBO/Elmendorf report. It is not a bad read and not long. It is the typical modeling economic report.