Christina Romer - "Op-Ed: Will health care reform reduce the relentless rise in costs?"

[TomCADem]

Warning. Some may see this as wonky and boring, since Romer is a former U.C. Berkeley economics professor:

http://news.yahoo.com/s/ynews/ynews_pl1038

The Senate bill includes changes to Medicare and Medicaid that reduce wasteful spending and fraud. For example, it saves more than $100 billion over the next decade by reducing unnecessary overpayments to Medicare Advantage plans. It also includes common-sense, care-improving, cost-reducing delivery reforms. For example, it creates a pilot program for the formation of accountable care organizations that encourage doctors to function as an effective team, and payment reforms that penalize hospitals for preventable infections. The creation of an Independent Medicare Advisory Board will help ensure that payment reforms continue to occur and have a good shot at being implemented.

Clearly, curbing federal health spending will relieve significant pressure on the budget in the years ahead, even after accounting for the expansions in insurance coverage. But will it also reduce the growth rate of costs in the private sector? Our analysis suggests that the so-called “Cadillac tax,” which will be levied only on the most expensive private sector plans, will provide health insurers with a powerful incentive to reduce their premiums and provide a high-value package of benefits. The added benefit is that the resulting reduction in premiums will lead employers to pay substantially higher wages to affected employees, with this effect growing over time, according to estimates by the Congressional Budget Office (CBO) and the Joint Committee on Taxation.

The reforms proposed in Medicare should also be an essential catalyst for delivery system improvements throughout the private sector. Bundling of care, administrative simplification, and other efficiency improvements will likely spread from the Medicare program to the private insurance providers.

The CEA estimates that altogether the Senate health insurance reform bill will slow the growth rate of public and private health care spending by 1.0 percentage point per year or more. Because the reductions occur year after year, what sounds like a small number will have tremendous benefits for the economy, families, and businesses. As a result of this slower cost growth, we project the typical family’s income will be thousands of dollars higher per year by 2030. The degree of slower cost growth that we find will also result in a significantly smaller federal budget deficit in the upcoming decade, with the effects growing over time. Lower health care cost growth will also reduce inflationary pressures, allowing for a period of lower unemployment and higher job creation.

Small businesses and their employees will especially benefit from health care reform. Currently, small businesses pay up to 18 percent more for the same policy as their counterparts at larger firms. Slower cost growth and setting up an insurance exchange where small firms capture some of the buying power of larger firms will result in lower premiums. This in turn would allow small businesses to pay higher wages, hire more workers, and increase investment. It would also increase workers’ incentives to launch their own small businesses.

[mcablue]

1. Romer is the one who predicted unemployment wouldn't go higher than 8.0

And it went to 10.6 at one point. She made the prediction in January.



http://m.factcheck.org/2009/06/making-sense-of-stimulus-spending/

[joeybee12]

2. She also likes tax cuts...n/t

[TomCADem]

3. Mark Zandi Did Support Her Conclusion That Unemployment Would Have Been Higher w/o Stimulus

And I think most liberals agree that the stimulus did stave off a deeper recession. Also, notice that her prediction was made before Congress's approval of the stimulus, which had to be scaled back for passage.