Obama Guesses His Way to Trillions in Health Savings
By Ezra Klein - Jun 12, 2013, Bloomberg
During his 2008 presidential campaign, Barack Obama relied on a standard applause line, a promise that his health-care plan would “lower premiums by up to $2,500 for a typical family per year.” Cue cheers -- or jeers if you were a health-policy expert. For them, his vow was ridiculous. There was no time frame attached to the promise. There was no plan for realizing it. It was change no one quite believed in. He might as well have promised every American a puppy.
But the number wasn’t derived from the ether. It came from an actual study, by Harvard University researchers and Obama advisers David Cutler, David Blumenthal and Jeffrey Liebman. The three had added up plausible savings from a slew of health-care delivery-system reforms and then divided that number by the size of the U.S. population.
It was a pretty rough estimate, and as Cutler told the New York Times, the savings the researchers identified couldn’t properly be attributed only to lower premiums. They would result from lower taxes, higher wages and much else besides. According to Cutler, candidate Obama was trying to “find a way to talk to people in a way they understand.” That doesn’t excuse telling them something that wasn’t true.
Even without Obama’s oversimplification, the $2,500 target was extremely optimistic. So here’s the shocking revelation: The savings are actually materializing. Over e-mail, Cutler pointed out that in January 2009, the Centers for Medicare and Medicaid Services projected that national health spending would equal 19.3 percent of gross domestic product in 2016. Their 2012 projection cuts the 2016 estimate to 18.3 percent.
(More here.)
During his 2008 presidential campaign, Barack Obama relied on a standard applause line, a promise that his health-care plan would “lower premiums by up to $2,500 for a typical family per year.” Cue cheers -- or jeers if you were a health-policy expert. For them, his vow was ridiculous. There was no time frame attached to the promise. There was no plan for realizing it. It was change no one quite believed in. He might as well have promised every American a puppy.
But the number wasn’t derived from the ether. It came from an actual study, by Harvard University researchers and Obama advisers David Cutler, David Blumenthal and Jeffrey Liebman. The three had added up plausible savings from a slew of health-care delivery-system reforms and then divided that number by the size of the U.S. population.
It was a pretty rough estimate, and as Cutler told the New York Times, the savings the researchers identified couldn’t properly be attributed only to lower premiums. They would result from lower taxes, higher wages and much else besides. According to Cutler, candidate Obama was trying to “find a way to talk to people in a way they understand.” That doesn’t excuse telling them something that wasn’t true.
Even without Obama’s oversimplification, the $2,500 target was extremely optimistic. So here’s the shocking revelation: The savings are actually materializing. Over e-mail, Cutler pointed out that in January 2009, the Centers for Medicare and Medicaid Services projected that national health spending would equal 19.3 percent of gross domestic product in 2016. Their 2012 projection cuts the 2016 estimate to 18.3 percent.
(More here.)
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