Wednesday, January 7, 2009

CBO’s Magnum Opus: Healthcare and Insurance Reform

Just before Christmas, the Congressional Budget Office (CBO) issued two volumes that focus on healthcare: Key Issues in Analyzing Major Health Insurance Proposals and Budget Options, Volume 1: Health Care. These documents expand CBO’s previous work on health insurance and healthcare financing and, as CBO Director Peter Orszag writes in his blog, “are intended to assist the Congress as it contemplates possible changes– both large and small– to federal health programs and the nation’s health insurance and health care systems.” While these new volumes make no recommendations, Orszag has been named by President-elect Obama to lead the Office of Management and Budget, so the substance of his work at CBO will gain momentum in the new administration.

The two documents do not make for light reading. The volume on health insurance covers the public and private insurance markets as well as funding, benefit design and financial incentives for patients and providers. If there is an implicit argument, it is that the present fee-for-service system of paying physicians is incapable of reining in costs. What should replace it to align providers’ incentives with efficiency and better cost management remains unclear.

The volume on budget options contains 115 specific items. Its chapter headings provide an overview:

  • The private health insurance market
  • The tax treatment of insurance
  • Changing the availability of health insurance through existing federal programs
  • The quality and efficiency of healthcare
  • Geographic variation in spending for Medicare
  • Paying for Medicare services
  • Financing and paying for services in Medicaid and SCHIP
  • Premiums and cost sharing in federal health programs
  • Long-term care
  • Health behavior and health promotion
  • Closing the gap between Medicare’s spending and receipts.

To read Peter Orszag’s blog, click here.

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1 comment:

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