The Corner

Relatively Rosy?

The New York Times, in its continuing efforts to compete with The Onion, describes the Obama administration’s plans for reducing health care costs this way:

In a relatively rosy forecast, the White House said Sunday that the savings from a more efficient health care system would far exceed the costs of achieving universal health coverage, with federal subsidies for people who could not afford insurance on their own.

Well, I suppose it’s possible that savings from a much much much more efficient health care system might somehow exceed those costs (which would easily run above $1.5 trillion over the next decade), but the savings the Democrats are actually talking about (as the Times puts it: “aggressive efforts to prevent obesity, coordinate care, manage chronic illnesses and curtail unnecessary tests and procedures; by standardizing insurance claim forms; and by increasing the use of information technology”) would not even come close. Preventive medicine generally does not save money and certainly wouldn’t save that kind of money. And the other items on this list are equally small potatoes. As the Congressional Budget Office put it a few months ago:

Approaches such as the wider adoption of health information technology or greater use of preventive medical care could improve people’s health but would probably generate either modest reductions in the overall costs of health care or increases in such spending within a 10-year budgetary time frame.

Such approaches are exactly what lay behind today’s White House announcement that health insurers and providers have “agreed” to cut costs by $2 trillion over ten years. The providers have a gun to their heads and are doing what they can to avoid being shut out of the Democratic reform effort, while the Democrats need a way to pretend their immensely expensive plan will be paid for somehow. So it’s rosy forecasts all around.

Conservatives should make clear to the public just what is being cooked up here. My colleague Jim Capretta and I offer some thoughts on the subject in the new Weekly Standard.

Yuval Levin is the director of social, cultural, and constitutional studies at the American Enterprise Institute and the editor of National Affairs.


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