This was released June 16, 2009.

Has anyone else seen this reported in the news?

Please help others who may not have seen this info by promulgating this by recommending this post. Thanks in advance if you do.

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The following is a cover letter from the Congressional Budget Office to Sen. Kent Conrad that details the relationship of the Health Care Reform effort and the federal budget.

After reading this cover letter you may wish to read the report in it's entirety that can be found here at the Cafe in my blog. The link is below the cover letter.

CONGRESSIONAL BUDGET OFFICE

Douglas W. Elmendorf, Director

U.S. Congress

Washington, DC 20515

June 16, 2009

 

Honorable Kent Conrad
Chairman
Committee on the Budget
United States Senate
Washington, DC 20510

Dear Mr. Chairman:

In the absence of significant changes in policy, rising costs for health care will cause federal spending to grow much faster than the economy, putting the federal budget on an unsustainable path. This letter responds to your request for information about the features of reform proposals that would affect federal spending on health care over the long term.

As you noted, many experts believe that a substantial share of spending on health care contributes little if anything to the overall health of the nation. Therefore, changes in government policy have the potential to yield large reductions in both national health expenditures and federal health care spending without harming health. Moreover, many experts agree on some general directions in which the government's health policies should move--typically involving changes in the information and incentives that doctors and patients have when making decisions about health care.

However, large reductions in spending will not actually be achieved without fundamental changes in the financing and delivery of health care. The government can spur those changes by transforming payment policies in federal health care programs and by significantly limiting the current tax subsidy for health insurance. Those approaches could directly lower federal spending on health care and indirectly lower private spending on it as well. Yet, many of the specific changes that might ultimately prove most important cannot be foreseen today and could be developed only over time through experimentation and learning. Modest versions of such efforts--which would have the desirable effect of allowing policymakers to gauge their impact--would probably yield only modest results in the short term.

Therefore, one broad long-range approach for reform that has drawn interest recently would combine specific policy actions--to generate near-term savings and provide experience that would lay the groundwork for future savings--with a mechanism or framework to impose ongoing pressure for achieving efficiencies in the delivery of health care. The effectiveness of that path would depend ultimately on the willingness of federal policy to maintain significant and systematic pressure over time and would require tough choices to be made. Without meaningful reforms, the substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it.

CBO does not provide formal cost estimates beyond the 10-year budget window because the uncertainties are simply too great. However, in evaluating proposals to reform health care, the agency will endeavor to offer a qualitative indication of whether they would be more likely to increase or decrease the budget deficit over the long term.

The attached analysis elaborates on these points. Please contact me at (202) XXX-XXXX if you have any questions.

Sincerely,

Douglas W. Elmendorf
Director

Attachment

Identical letter sent to the Honorable Judd Gregg.

Again: The entire report is located in the Cafe here at my blog:

• CBO Report June 16, 2009: Health Care Reform and the Federal Budget
  

There is no doubt that it is a long read. Although, to place the ongoing health reform effort in it's full context it is a must read.

~OGD~