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Thursday, February 22, 2007
Budget Blind Spot
A comment on testimony given to the Senate Budget Committee by Jason Furman, the leader of the center-left Hamilton Project and a scholar at the CBPP. The testimony concerns the "fiscal gap," the hot new phrase for what's typically called the long-term structural imbalance in the federal budget. His testimony is interesting and largely constructive.
But it's more notable for its demonstration of budget wonkery's biggest blind spot: health care economics.
Furman says rising health care costs are primarily responsible for the "fiscal gap." Yet all he says on the overall issue is this:
Unlike Social Security reform, there is no place to find readily quantifiable menus of options for health reform. The choices facing individuals, companies, and the government are not nearly as simple or well understood.
That's it? On the most important problem?
And it may be that the options for health care reform are more complex and less understood. But they are sufficiently understood. There's McKinsey & Company's landmark study on why our health care system is so overpriced (though in fairness I think it was released after Furman gave his testimony). There's a fascinating study of the Veteran's Administration's lean, effective health care system. There's all the work that Gerard Anderson has done on cross-national comparisons.
And there's the fact that the rest of the industrialized world knows how to contain health care costs while providing quality care.
The problem isn't that the issue isn't understood; it's that budget wonks don't care to understand it. If we want to close the "fiscal gap," we should figure out how to fix the health care system.
Posted by Matt Lewis
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