CBO: ObamaCare bends the cost curve upward

posted at 3:35 pm on June 2, 2010 by Ed Morrissey

A little-noticed analysis by the CBO last week showed that rather than controlling costs in the near- and long-term, ObamaCare does nothing to change the upward pressure on medical costs.  In fact, as Keith Hennessey argues in a guest column at Business Insider, the bill in combination with the anticipated “doc fix”, it will substantially worsen the situation.  CBO chief Douglas Elmendorf obliterates the Obama administration’s argument that the health-care cost issue was at the heart of the deficit crisis in the first place, emphasis mine:

The projected reductions in budget deficits and in the federal budgetary commitment to health care during the decade beyond the 10-year budget window are steps in the direction of sustainable fiscal policy. However, they are small steps relative to the length of the journey that will be needed to achieve sustainability. If the tax cuts enacted in 2001 and 2003 are extended, the alternative minimum tax is indexed for inflation, and no other changes are made to current laws regarding taxes and spending, the budget deficit in 2020 would be about 6 percent of GDP and rising. Because federal health care programs make up a large share of the federal budget, putting that budget on a sustainable path would almost certainly require a significant reduction in the growth of federal spending on health care relative to the amounts projected under current law (including this year’s health legislation).

In considering the opportunities for achieving that reduction in spending growth, there are grounds for both optimism and pessimism. On the upside, there is considerable agreement that a substantial share of current spending on health care contributes little if anything to people’s health, and providers and health analysts are making significant efforts to make the health system more efficient. On the downside, it is not clear what specific policies the federal government can adopt to generate fundamental changes in the health system; that is, it is not clear what specific policies would translate the potential for significant cost savings into reality. Moreover, efforts to reduce costs substantially would increase the risk that people would not get some health care they need or would like to receive.

Hennessey highlights another passage from Elmendorf:

Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond.  In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.

Gee, perhaps the CBO could have told us that in March, when it might have made a difference.

Meanwhile, the Obama administration has decided to start attacking doctors who balk at compensation cuts through the Department of Justice rather than the FTC, apparently wanting to keep options open for criminal prosecution:

As I’ve long suspected, “health care reform” has emboldened the Justice Department to take a more active role in enforcing government price controls against physicians. Today the Antitrust Division, joined by Idaho Attorney General Lawrence Wasden, forced a a group of Boise orthopedists to accept price controls for worker’s compensation and HMO contracts as part of a settlement accusing the doctors of “price fixing” …

This case is a watershed for two reasons:

First, until now the Federal Trade Commission, not the Justice Department, has taken the lead in prosecuting physicians. Since 2000, the FTC has brought about three dozen cases against physicians (all but one of which settled without any trial). But the FTC only has civil and administrative jurisdiction; the Antitrust Division has civil and criminal jurisdiction. The Sherman Act makes no distinction between civil and criminal “price fixing,” so in a case like this, it’s entirely a matter of prosecutorial discretion whether to charge the doctors with a civil or criminal offense.

Based on the descriptions in the Antitrust Division’s press release, there’s certainly no reason they couldn’t have prosecuted the doctors criminally and insisted upon prison sentences — and there’s little doubt such threats were made or implied to obtain the physicians’ agreement to the proposed “settlement.”

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

For more on this, be sure to read Laura Curtis’ post in the Green Room.  This move comes at the same time that the Medicare compensation rates got cut 21%, an effect of the delay Democrats have had in pushing the “doc fix” they promised the AMA in exchange for support of ObamaCare.  The “doc fix” will make ObamaCare even more of a cost amplifier than the CBO figures it is at the moment (they calculated costs with the scheduled compensation cuts remaining in place).  Where is the AMA on this escalation of punitive measures towards dissenting doctors after its sellout to the White House on ObamaCare?


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Read it. Find out what’s in it. Blah blah blah.

lorien1973 on June 2, 2010 at 3:37 PM

bends the cost curve upward and the Ones approval numbers downward..

PatriotRider on June 2, 2010 at 3:37 PM

Well, we did have to pass the bill before we could find out what was in it and what effect it would have on the economy.

Kafir on June 2, 2010 at 3:37 PM

But in our world, up is down.

So we’re ok.

artist on June 2, 2010 at 3:40 PM

Just One more reason to REPEAL it!

Chip on June 2, 2010 at 3:40 PM

Treason.

Sharke on June 2, 2010 at 3:41 PM

Where are the calls for hearings and an independent council?

Maybe the AG should investigate possible criminal actions?

singlemalt_18 on June 2, 2010 at 3:41 PM

Gee, perhaps the CBO could have told us that in March, when it might have made a difference.

The Dems were hell-bent on passing anything… but it could have helped make them even more unpopular.

mankai on June 2, 2010 at 3:42 PM

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

Well that’s terrific. That won’t send practicing physicians to an early retirement or scare off any future med students. I keep saying it, but it bears repeating: THESE PEOPLE ARE INSANE!!!

Doughboy on June 2, 2010 at 3:42 PM

Hide the incline.

Abby Adams on June 2, 2010 at 3:43 PM

Suck a lemon CBO!!!! You knew all this BEFORE the bill was passed. Offering this info now, is to little to late. So again….GO SUCK A LEMON!!!

capejasmine on June 2, 2010 at 3:43 PM

The AMA, like AARP, doesn’t represent the interests of the people it claims to represent. When will enough members recognize that and quit? Or will they just keep paying dues to an organization that’s selling them out at every opportunity?

AZCoyote on June 2, 2010 at 3:44 PM

Holy shi…znatch, going after the doctors for refusing to accept whatever pay the government tells them to?

Guess I better start brushing up on my folk remedies and witch doctoring.

Bishop on June 2, 2010 at 3:46 PM

All you had to do was look at what happened in Massachusetts to understand this.

cool breeze on June 2, 2010 at 3:46 PM

Get. Out. Of. Town.

Obama lied and health care died.

jukin on June 2, 2010 at 3:46 PM

Bush’s fault?

rogerb on June 2, 2010 at 3:46 PM

…and not one person in the United States is surprised by this finding. Not. One.

Bugler on June 2, 2010 at 3:47 PM

If the tax cuts enacted in 2001 and 2003 are extended, the alternative minimum tax is indexed for inflation, and no other changes are made to current laws regarding taxes and spending, the budget deficit in 2020 would be about 6 percent of GDP and rising.

Well we know that’s just a pipe dream!

Vince on June 2, 2010 at 3:47 PM

rogerb on June 2, 2010 at 3:46 PM

Definitely. I has to be.

Abby Adams on June 2, 2010 at 3:48 PM

Just One more reason to REPEAL it!

Chip on June 2, 2010 at 3:40 PM

Plug the damn hole. Build the damn fence, Repeal the damn law.

Vince on June 2, 2010 at 3:49 PM

>The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

How could that possibly hold up in court? And by court, I mean a neutral non-activist court.

p0s3r on June 2, 2010 at 3:50 PM

Docs are not socialists nor do they believe in gov’t rationing. The plan,Obamacare, is an epic fail right out of the gate. This episode will end the progressive tide in this Country for at least 2 generations if we don’t fail to teach the message.

tim c on June 2, 2010 at 3:50 PM

The AMA, like AARP, doesn’t represent the interests of the people it claims to represent. When will enough members recognize that and quit? Or will they just keep paying dues to an organization that’s selling them out at every opportunity?

AZCoyote on June 2, 2010 at 3:44 PM

I quit the AARP when I found out I could get life insurance, car insurance and eventually, hopefully Medicare Sup insurance a lot cheaper than their products. Does not look like I’ll be able to get a Medicare Advantage plan.

Vince on June 2, 2010 at 3:53 PM

And yet the GOP seems to be dropping the issue of Obamacare repeal.

WTF? Obama is drowning himself in oil, so why not help him along by tying the millstone of Obamacare around his neck–publicly and often?

BuckeyeSam on June 2, 2010 at 3:53 PM

Hide the incline.

Abby Adams on June 2, 2010 at 3:43 PM

Winner!

John the Libertarian on June 2, 2010 at 3:58 PM

What a nightmare!

What are the chances for repeal?

petunia on June 2, 2010 at 3:58 PM

First, do no harm

cntrlfrk on June 2, 2010 at 3:59 PM

I keep thinking that somebody sometime soon is going to find a line in the ObamaCare bill that makes it a federal felony for doctors to stop being doctors. This isn’t quite THAT bad, but it’s bad enough — protest what the government is paying you, and you could go to prison? WTF? This is bad enough that the only way the government could hope to stop the “doc drain” is to threaten draconian punitive measures against any doctor who might quit the profession.

I swear, we have the first black president, and he’s making moves to bring back slavery.

Aitch748 on June 2, 2010 at 4:01 PM

AMA sell outs are in congressional gym dancing with Rahm.

antisocial on June 2, 2010 at 4:02 PM

Unexpectedly!

dczombie on June 2, 2010 at 4:03 PM

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

If this doesn’t chill you to the bone…

This is beyond bad…

Neo-con Artist on June 2, 2010 at 4:06 PM

Just One more reason to REPEAL it!
Chip on June 2, 2010 at 3:40 PM

Plug the damn hole. Build the damn fence, Repeal the damn law.
Vince on June 2, 2010 at 3:49 PM

Hmm.. I’m sensing a theme here..

Chip on June 2, 2010 at 4:06 PM

Every day I awake to find myself more fully entrenched in reality that is a marrige of Orwell and Rand.

Archimedes on June 2, 2010 at 4:07 PM

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

Addendum:

So accept our price-fixing, or we’ll accuse you of… “price-fixing”?!?!

Neo-con Artist on June 2, 2010 at 4:08 PM

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

If this doesn’t chill you to the bone…
This is beyond bad…
Neo-con Artist on June 2, 2010 at 4:06 PM

Whiskey Tango Foxtrot!

If this doesn’t chill you to the bone…
This is beyond bad…

Could applied to everything the Obooby administration has done.

Chip on June 2, 2010 at 4:10 PM

Bankrupt before it gets started. Even brainwashed demonrat lemmings with single digit IQs are not surprised by this. “A great civilization is not conquered from without until it destroys itself from within.” This is just a step in that direction. Thanks, Barry Soetero.

volsense on June 2, 2010 at 4:13 PM

Work for the greater good or else. Obama isn’t the new Jimmy Carter, he’s Joseph Stalin.

ROCnPhilly on June 2, 2010 at 4:13 PM

Won’t it be great when all our doctors are anything but white like great Britain’s?

We will lose the initiative to pursue medical careers because of the demolision being wrought on our system

we are being institutionally formed to irrelivance

Sonosam on June 2, 2010 at 4:13 PM

Just wait until the doctor, hospital, clinc, and surgery center shortages.

jukin on June 2, 2010 at 4:13 PM

“A little-noticed analysis by the CBO last week….”

Doug Elmendorf released this little tidbit of information on Friday, the day before Memorial weekend when no one would notice. This and other “bad news” or news that is not popular with Obama’s socialist agenda are purposely released on late Fridays—it’s the Chicago Way.

Elmendorf should be hauled up to congress and asked when did he know these facts and why is he waiting until now to inform the general puplic that ObamaCare is going to bury this nation in another financial nightmare. I’d also like to know if he has any offshore accounts that might be getting a bit “greasy”.

Rovin on June 2, 2010 at 4:16 PM

Just a few months late and a few trillion dollars short.

Thanks pals, for helping Obama get this passed by lying in the orginal CBO report.

stenwin77 on June 2, 2010 at 4:20 PM

There is still time to repeal this beast…

Khun Joe on June 2, 2010 at 4:27 PM

Health care rationing won’t cost you much, unless you need it…

tarpon on June 2, 2010 at 4:37 PM

I heard Obama claim the insurance premium would fall by 2,500 per household.

seven on June 2, 2010 at 4:41 PM

The second reason this is a landmark case is that the Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing.”

Directive 10-289, being applied incrementally. Time for more doctors to “go Galt.”

Every day I awake to find myself more fully entrenched in reality that is a marrige of Orwell and Rand.

Archimedes on June 2, 2010 at 4:07 PM

Bingo

iurockhead on June 2, 2010 at 4:41 PM

There is still time to repeal this beast…

Khun Joe on June 2, 2010 at 4:27 PM

It has been increaingly reported that the Rep’s are losing their zeal for any repeal of Obamacare. Now they are talking about “modification”, the f**king 1/2 measures of moderation that has led to where we are now, the precipice of abject destruction.

I really, really come have less confidence that we will be able to avoid the multiple disasters that loom before us.

Archimedes on June 2, 2010 at 4:47 PM

when in doubt, Democrats put a gun to the heads of doctors, as if that won’t impact care in this country.

rob verdi on June 2, 2010 at 4:59 PM

Let’s see, seize the insurance companies, check. Seize the banks, check. Seize the car companies, check. Seize the assets of secured creditors, check. Seize control of old media, check. Seize the oil companies, in process. Seize personal freedom of private practice doctors to run a business, in process. Almost there.

txmomof6 on June 2, 2010 at 5:09 PM

And yet the GOP seems to be dropping the issue of Obamacare repeal.

The Democrats drive in the fast lane while the Republicans drive in the slow lane. The only problem is that the highway they are on terminates in the same place. Statism.

chemman on June 2, 2010 at 5:19 PM

txmomof6 on June 2, 2010 at 5:09 PM

You left one money source off.

Seize private retirement (401k’s, IRA’s) accounts. Being researched.

chemman on June 2, 2010 at 5:21 PM

A mashup of “I Told You So” & “No Shtt, Sherlock” & “Dick Frkkkn Tracy.” And No Joy what so ever.

dts-01 on June 2, 2010 at 5:41 PM

You left one money source off.

Seize private retirement (401k’s, IRA’s) accounts. Being researched.

chemman on June 2, 2010 at 5:21 PM

I stand corrected!

txmomof6 on June 2, 2010 at 5:41 PM

And just who is surprised by this ?
Who would have imagined that the true costs and information were withheld and now we have an ENTITLEMENT that will surely bankrupt our country
Hey I know lets open the border up and let 30 MILLION Mexicans come over and enroll in the plan and ruin everything
VIVA AMNESTY !!!!!

ELMO Q on June 2, 2010 at 5:47 PM

Only about 17% of doctors belong to the AMA which has become just another left wing organization.

Dhuka on June 2, 2010 at 5:48 PM

Only about 17% of doctors belong to the AMA which has become just another left wing organization.

I quit 20 years ago, when their political aims eclipsed their medical aims. Haven’t missed ‘em for a millisecond.

EyeSurgeon on June 2, 2010 at 6:36 PM

No surprise. That’s the Obama solution of everything, ever run-away oil wells. SUE!

GarandFan on June 2, 2010 at 6:50 PM

Everything this administration does is about control and giving the government the power to pick winners and losers. From the government take over of Chrysler and GM to financial “reform” to health care reform. And picking winners and losers in the realm of health care means deciding who gets what treatment.

How do you spell “Death Panels”? I spell it O B A M A C A R E.

Ordinary American on June 2, 2010 at 7:13 PM

rather than the FTC

Well of course, since the FTC now has responsibility for media industrial policy!

DrSteve on June 2, 2010 at 8:28 PM