Tuesday, October 27, 2009

A serious man

Shorter Fred Hiatt: No one knows how to contain health care costs, so it would be wrong to try...look over there!.

Peter Orzag has had enough
of this weasels beltway complacency and misinformation masquerading as a newspaper editorial page.

Peter Orszag: Fred Hiatt... writing... that the two biggest steps that can be taken to reduce the rate of health care cost growth--changes in health care’s tax treatment and an independent Medicare commission--are missing. I agree with Hiatt on the potential substantial benefits in terms of cost containment from these two changes. But a note... the Senate Finance Committee bill includes both of these measures... creates an excise tax on insurance companies offering high-premium plans--which would create a strong incentive for more efficient plans that would help reduce the growth of premiums... establishes a Medicare commission--which would develop and submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost growth, and improving the quality of care delivered to Medicare beneficiaries. If [Fred Hiatt's] concern is that these two provisions would not survive the rest of the congressional process, then [Fred Hiatt should] say that--rather than suggesting that they aren’t already reflected in legislation. Moreover, as I blogged a couple of weeks ago, the Senate Finance Committee’s bill is not the only measure that includes important cost constraining provisions... that experts from across the spectrum agree will help transform health care... penalties for hospitals with high, preventable 30-day readmission rates... encouraging the establishment of accountable care organizations... bundled payments for high-cost, chronic conditions.... Hiatt writes that "no one knows for sure how to control costs." True, we have never transformed the health sector before, and it is therefore difficult to quantify precisely how these steps will work together to promote quality and reduce cost growth. But it is wrong to conclude that these steps--even the ones beyond the excise tax on high-cost plans and the Medicare commission--are merely hypothetical pie in the sky.

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