CBO: Government's Innovative Health Savings Programs Don't Work


Back in March, Health and Human Services Secretary Kathleen Sebelius showed up in Politico touting a whole bunch of reasons why Americans should feel just dandy about last year's health care overhaul. None of them were terribly convincing, however, in particular her insistence that health care cost growth could be restrained through ever-better technocratic management of the health care sector. "As part of the health care law," she wrote, "we have invested in preventive care, and innovative programs aimed at slowing that growth of premiums. By testing and implementing new ideas to coordinate care, improve patient safety, and reduce waste, fraud and abuse, the law will create additional savings for decades to come."

As I wrote at the time, there's never been much reason to believe that those "innovative programs" she brags about would be very effective. Now there's even less reason: The Congressional Budget Office is readying a report essentially saying that all those fancy pilot programs Sebelius is so proud of don't work very well, 

From a joint Fiscal Times/Kaiser Health News report by Merrill Goozner:

A forthcoming report from the Congressional Budget Office shows that more than two dozen demonstrations projects launched by Medicare and Medicaid over the past decade have failed to stop the upward march of health care costs, CBO director Doug Elmendorf said Tuesday.

…Elmendorf defended CBO's projections that delivery system reforms like the accountable care organizations allowed under reform would only save a few billion dollars in the coming decade. "The demonstration projects that Medicare has done in this and other areas are often disappointing," he said. "It turns out to be pretty hard to take ideas that seem to work in certain contexts and proliferate that throughout the health care system. The results are discouraging."

There's already a fair amount of evidence that Medicare pilot programs haven't worked very well, with innovations frequently proving tougher to scale or replicate than expected. And the law's overly prescriptive approach to accountable care organizations—another of the law's frequently touted delivery system reforms—has turned out to be so off-putting that a number of the highly integrated providers who inspired the idea have said they won't participate in the program as it currently exists

Even still, this is a major blow to the foundation of ObamaCare's promises to rein in health spending and keep premium prices from rising as fast as otherwise projected. Those savings are largely premised on the notion than empowered, independent health policy experts can identify successful delivery-system innovations, then copy them throughout the system, thus saving lots of money without any sort of explicit rationing or reducing the quality of care. What the CBO is now confirming is that when the government has tried this approach in the past, it's rarely worked.