The American Spectator : The Spectacle Blog : Bending the Cost Curve

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President Obama's Council of Economic Advisers is out today with a new report about the benefits of curbing the growth of health care costs. Reducing growth inflation from 6 percent to 4.5 percent, the report says, could mean as much as $2,600 in more income for the typical family of four by 2020, and $10,000 by 2030. Such cost savings could also reduce the unemployment rate by a quarter point, or 500,000 jobs.

But as the Washington Post notes:

The report contains few details about how those ambitious goals would be achieved, however, and does not address any increased federal spending needed to implement health reform. And the White House economists acknowledge that shaving 1.5 percentage points off the rate of growth in health spending would be extraordinarily difficult -- "probably near the upper bound of what is feasible."

The full report is available here.

Meanwhile, the industry groups that promised last month to save $2 trillion in health care costs over the next decade, are back with a more detailed letter. I haven't had a chance to read the whole thing yet (available here), but here's how they vow to save money:

• Utilization of Care: $150 - $180 billion

• Chronic Care: $350 - $850 billion

• Administrative Simplification and Cost of Doing Business: $500 -$700 billion

In case you're keeping score at home, that's adds up to a range of $1 trillion to $1.7 trillion.

View all comments (3) | Leave a comment

Tim| 6.2.09 @ 10:43AM

Chronic care = euthanasia. Soylent green is people! PEOPLE!

Jeremy Engdahl-Johnson| 6.2.09 @ 3:20PM

Interesting to see the forward-looking numbers from CES calculating how much the proposed 1.5% cost trend deceleration could save American families in the future (if the 1.5% reduction can be enacted, which is of course the hard part). Over the last five years, such a deceleration, if enacted, would have reduced a family's healthcare cost by $3,095 total. For more information, go to www.healthcaretownhall.com.

John | 6.2.09 @ 4:07PM

The point is not to greatly expand the healthcare system which is what BHO wants to do. I believe that we could continue just like we are with a few tweaks. The first tweak would be to make the individual pay the bill out of his pocket, and then he has to file for reimbursement from his insurance company. The doctors office doesn't file the forms, the patient does this will do 2 things - 1) it will reduce the many unnecessary office visits. If you have to foot the bill and wait on re-imbursement you will suffer through a cold with OTC medicines rather than go to the doctor to get the same meds in prescription. 2) It will reduce costs to the doctor and allow him to quit padding the bills so he can get close to his real cost on re-imbursement. If you don't believe that's true talk to your doctor about paying cash for your medical stuff vice using insurance and see how dramatically he can reduce your cost.
Tweak 2 would be to make everyone over age 18 have a medical savings account (5% of salary pre-tax) to be used to pay medical bills and or insurance if they desire. These funds could only be used for payments to certified medical institutions. Once you fully fund this at $30k then any excess would be to pay catastrophic care insurance (prior to that the government would pay for catastrophic care exceeding 30K). Tweak 3 - once medical savings and catastrophic care was satisfied, the excess each year could be rolled into your retirement plan (IRA, 401K, or whatever retirement plan you use without any penalty).