Congressional Budget Office Projects Endless Federal Health Care Deficits

|

health care reform

President Barack Obama keeps warning that rising health care costs are unsustainable, therefore, we need the government to take over more of our dysfunctional health care system to reduce costs and improve quality. Yesterday, Douglas Elmendorf, the head of the Congressional Budget Office put the kibosh on this rhetorical nonsense. Elmendorf explained to both House and Senate committees that the health care bills they are considering do virtually nothing to reduce costs. In fact, they will be budget busters, making already dismal federal deficits worse rather than better. As the Washington Post reports:

The chairman of the Senate Budget Committee,  Sen. Kent Conrad (D-N.D.), also has taken a leading role in the Finance Committee negotiations. Yesterday, when Elmendorf appeared before Conrad's committee to testify about the nation's long-term budget problems, Conrad focused his questions on the House and Senate committee measures, which were drafted without Republican input.

"I'm going to really put you on the spot," Conrad said. "From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?"

Elmendorf responded: "No, Mr. Chairman." Although the House plan to cover the uninsured, for example, would add more than $1 trillion to federal health spending over the next decade, according to the CBO, it would trim about $500 billion from existing programs—increasing federal health spending overall.

Considering the fact that nearly any goverment program spends more than is initially projected, these new estimates for government health care program deficits are not a surprise to anyone (except for disingenuous Congress critters). Just consider another problem about which Americans are constantly told that throwing more tax dollars at it will solve: public education. 

In 1970, average per pupil spending in constant dollars was around $4,500 and average SAT scores were 537 on the verbal section and 512 for the math section.  By 2006, average per pupil spending more than doubled to $9,400 while SAT verbal scores averaged 502 and the average math score was 518. Sure, sure. The SAT tests a different and expanded group of kids than it did back in 1970.  But even considering that fact, it shows that the hypothesis of throwing more tax dollars at a problem does not improve the quality of government services.

There is only one proven way to lower the costs and improve the quality of goods and services, and that's competition. Unless and until the health care "reformers" on Capitol Hill and in the White House grasp that plain fact, either endless cost increases or stringent health care rationing are inevitable. 

NEXT: The Gnome in the Garden of Good and Evil

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. In 1970, average per pupil spending in constant dollars was around $4,500 and average SAT scores were 537 on the verbal section and 512 for the math section. By 2006, average per pupil spending more than doubled to $9,400 while SAT verbal scores averaged 502 and the average math score was 518.

    Verbal SAT scores declined? That’s unpossible.

  2. “CBO Projects Sun to Rise Tomorrow – Politicians Skeptical”

  3. Verbal SAT scores declined? That’s unpossible.

    Don’t you mean – That don’t be possible.

  4. President BarackObama keeps warning that

    OMG! Ron Bailey is Lonewacko!!!

  5. OMG! Ron Bailey is Lonewacko!!!

    Duh. You didn’t know this already?

  6. We all know the story. Government run blah blah blah… over expenditures blah blah blah…

    PRIVATIZE!!!! Problem solved.

    It’s an inevitability.

  7. He’s just never rubbed in our faces so blatantly before.

  8. SugarFree & Episiarch: What did I ever do to you two? Have a good weekend anyway!

  9. Perhaps this will drive a stake through health care reforms heart. I doubt it, but hope springs eternal.

    The dumbshits are trying to do too much all at once, not realizing that health care is an aggregate of many things, some private, some public, some mixed. Deal with one aspect of the problem at a time and you might actually do some good. Other than elimination of a governmental program, “comprehensive reform” is almost always a Chinese fuck story. A grab bag of favors to different interest groups combined with a witch hunt seeking the villain of the hour.

    But I have neither been to college nor worked in congress, so I’m probably talking out of my ass.

  10. The SAT tests a different and expanded group of kids than it did back in 1970. But even considering that fact, it shows that the hypothesis of throwing more tax dollars at a problem does not improve the quality of government services.

    SAT scores declined, yet every single ethnic group’s score increased. How?

  11. Ron,

    You committed The Ultimate Sin. A typo. Nothig he Or i would evar do.

  12. They’re bitter because you didn’t post anything on the robot zombies. The cover-up has started, anyway. Now the media is saying that the robot only eats vegetation. RIIIIII-GGHT.

  13. Don’t worry, Pro Libertate. It’s the cover-up that always gets them.

    And the very thought of vegan robot zombies turns my stomach. If I must die by semi-autonomous machine, I don’t want the stink of peanut butter, mung beans and patchouli to be upon it.

  14. President Barack Obama keeps warning that rising health care costs are unsustainable,

    Notice he not only didn’t warn us that rising real estate prices were unsustainable, he actively legislated to make sure they were sustainable.

  15. Back when they were admitting that it might eat corpses, it occurred to me that there was one major unanswered question: How does the robot know that the person is dead and not merely wounded?

    I’ll grant the military this: once our enemies and potential enemies learn that they’ll be facing zombie robots, we’ll probably never be challenged in the field again. Pax Americana! With zombie robots!

  16. SugarFree & Episiarch: What did I ever do to you two? Have a good weekend anyway!

    The fact that you don’t know what you did just makes it worse, Ron.

  17. I would like to object to the “robot zombie” construction.

    Since they are neither mechanical facsimiles of human-derived zombies, nor machines that have died and been resurrected (and even if they were, they would only be zombies if they fed off other machines), and the fact that human zombies crave the flesh of the living, not the dead… I submit that the corpse-eating machines should be called robot ghouls.

  18. I’ve wondered why, if the government must do something, it can’t just sell catastrophic care insurance to everyone.
    After your health care bills reach $32,758 (or some other arbitrary number) let’s say, the government/taxpayer picks up the rest of tab.
    Combined with HSA’s and private insurance (which should be a lot cheaper), that should ease most of the current middle class health care angst. I mean, I don’t worry too much about paying $100 for a doctor’s visit or a couple grand for a broken leg. (By way of comparison, a new clutch on my clunker is going to cost me $1,200). I worry about the million dollar heart attack or cancer treatment.
    Like they say, car insurance doesn’t pay for oil changes.

    I’m sure I’m overlooking something, but something along these lines sounds simpler and cheaper than what we’re bound to get. However, I’m still not sure what to do about the robot ghoul problem.

  19. Way ahead of you on that issue, SugarFree, but I thought there was a better chance of getting an H&R posting on this with the zombie appellation.

  20. Oh, and we replace all forms of welfare/subsidies/whatever with a negative income tax.
    See, this is easy.

  21. But Citizen, your suggestions are cute, but where’s the governmental control and vote buying potential?

  22. Elimination of the “Certificate of need” would be a hell of a start. The certificates create an artificial scarcity of resources that shouldn’t exist.

    Granted, it won’t fix everything, but it’s a hell of a lot better than the current system.

  23. Bah… ignore the first ‘But’.

  24. I thought there was a better chance of getting an H&R posting on this with the zombie appellation.

    I do agree with you there. Ghouls just aren’t trendy enough for our blog masters.

    And they have been suspiciously silent on the bankruptcy of the makers of Crocs. (Unless I missed something, I’ve actually been busy at work and sorely sleep deprived. (Unrelated but synergistic phenomena.))

  25. Couldn’t the headline just read “Congress guarantees federal defecit?”

  26. Now if you listen to that shitbag Ezra Klein in the post today he says that anyone who quotes these numbers must also come up with a plan to cut costs or go along with BO’s plan. The idea that a government plan will make things worse and cost more and that we are better off doing nothing than making things worse seems beyond his grasp.

    I guess that is why they journolist, so only the best and smartest people can bounce ideas off of each other. In a sane world idiots like Klein would be co posting with Lonewhacko rather than writing for a national newspaper.

  27. “We have to spend money to keep from going bankrupt.”

    -Vice President Joe Biden

  28. Now if you listen to that shitbag Ezra Klein in the post today he says that anyone who quotes these numbers must also come up with a plan to cut costs or go along with BO’s plan.

    OK, Ezra.

    Eliminate all first-dollar coverage from Medicare and Medicaid and convert them into true catastrophic care policies. Reduce the federal match for Medicaid. Eliminate the EMTALA rules prohibiting hospitals from controlling access to their emergency rooms. Institute nationwide tort reform to require expert opinions before a malpractice case is filed and allowing only actual damages.

    Was that so hard?

  29. There is only one proven way to lower the costs and improve the quality of goods and services, and that’s competition.

    “But, but competition hurts vaginas!”

  30. btw, that picture is grrrrrrrreat!

  31. Isn’t the SAT designed to ensure that the average score is 1000, i.e. in theory, shouldn’t the average SAT score hover around 1000 regardless changes in overall performance? The decline you’ve pointed to may also be meaningless, both in a statistical and practical sense. Using the SAT as a measure of performance in this context seems a little disingenuous.

  32. “Now if you listen to that shitbag Ezra Klein in the post today he says that anyone who quotes these numbers must also come up with a plan to cut costs or go along with BO’s plan.”

    Hey I can come up with a plan to cut government expenses down to zero – just immediately eliminate every single healthcare related entitlement program of any type – Medicare, Medicaid, SCHIP and any other ones that may be roaming around in the federal circus.

    And also eliminate the federal mandate that hospital emergency rooms have to treat anyone that shows up whether they can pay or not. The feds never had any Constitutional authority to impose that mandate to begin with.

    The healthcare can go back to being just another commodity handled by the private sector – as it should be.

    Problem solved.

  33. DRP: Don’t forget that the SAT results were “adjusted” back in the mid-90’s as well. At the time, average scores were too low, so they adjusted the total scores up by about 100 points. The immediate consequence of this? Colleges upped their requirements to get in by about 100 points.

    Nephilium

  34. Nephilium: Great point! Yet another reason why we shouldn’t use population average SAT scores–or population average scores for any “properly” standardized test–as a measure of performance.

  35. nice post..

  36. i am wondering…

    ___________________
    Britney
    Entertainment at one stop

Please to post comments

Comments are closed.