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What You Need To Know About The New Lewin Report…And How The GOP Will Misuse It

Over at the Atlantic, Chris Good points to a troubling new Lewin study that the GOP will undoubtedly incorporate into its talking points. The new report for the Peter G. Peterson Foundation, concludes that the House legislation as amended by the Energy and Commerce Committee “would incur a $1.01 trillion net cost to the federal government from 2020-2029 “due to rapid growth in health care costs that will outpace the growth in incomes and revenues over the longer-term.’” After 10 years, the bill will add only Here are some of the ugliest numbers:

- The net federal cost of the Act over the following ten years (2020 through 2029) would be $1.01 trillion (excluding debt service costs) due to rapid growth in health care costs that will outpace the growth in incomes and revenues over the longer-term.

- Families in which all members currently have insurance would save an average of about $176 under the Act, while families with one or more uninsured members would, on average, see an increase in family health spending of $1,410 per family.

- Overall, employer health spending would increase by an average of $305 per worker. Employers that currently offer insurance would see an increase in health spending of $123 per worker, while employers that do not now offer coverage would see an increase in health spending by an average of about $813 per worker.

- The study assumes that employers would eventually pass their higher benefit or tax costs through to workers in the form of lower wage growth. As a result, average after-tax wages would decline by $180 per family. Those effects are captured in the impact on families and individuals. On average, families would see health care spending increase by about $120 in 2011 as more people gain coverage and some people obtain better coverage.

At first glance, the study — while certainly troubling twenty years out — undermines the GOP’s doomsday predictions. The public plan does not crowd out private coverage. The employer mandate doesn’t result in large job losses. The plan is almost deficit neutral after 10 years, 30 million Americans obtain health insurance, states and small businesses save money, Americans with health insurance save money and small businesses “would save up to $813 per worker.”

But scoring something 20 years out is always tricky (and the report’s ability to predict the increase in cost per family to a dollar amount is almost laughable.) As Congressional Budget Office head Douglas Elmendorf has repeatedly pointed out, “it is very hard to look out over a very long term and say very accurate things about growth rates.” “We have very little evidence about interlocking changes in the complex health-care system, and I don’t think that our numbers should be the ultimate determinant of the policies that you and your colleagues will vote for and against,” Elmdenorf said.

Indeed, the CBO has certainly made its share of mistakes in estimating the budgetary effects of policy 10 years out — and it doesn’t help that Lewin, like the CBO, is going for 20, while dismissing system savings.

Like the CBO, Lewin does not calculate the savings from implementing electronic medical records, health information technology and reforming the way Medicare and Medicaid reimburse providers (so-called modernization policies). As Melinda Beeuwkes Buntin and David Cutler pointed out in a recent analysis, these savings can total to some $2 trillion. In fact, even the industry is on record as saying we can reduce the growth rate in annual health spending by 1.5 percentage points a year over the next 10 years, lowering spending overall health care spending by $2 trillion (this represents a 20 percent reduction in projected growth.)

In other words, a $1.01 trillion cost is an inference that ignores system-wide savings — savings that policy makers can guarantee by including a so-called fail-safe option. In other words, a commission would monitor health care spending and implement a series of measures to address the problematic areas.

In Tonight’s Speech, Obama To Reach Out To Republicans By Embracing Malpractice Reform

In tonight’s address to Congress, President Obama will make one last effort to secure Republican support for a comprehensive health care reform bill by embracing tort reform. “The President will talk about meaningful malpractice reform tonight. What I hope that does is cause Republicans to understand that we’re close to getting something truly significant done for the American people,” White House Press Secretary Robert Gibbs explained during an interview on Fox News.

Watch it:

Obama has expressed support for malpractice reform during a private meeting with the American Medical Association in June and later announced that “we need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines.” But while Republicans have argued that malpractice reform is the best way to lower health care costs (it’s not, malpractice costs make up just 0.46 percent of all health care spending), the Democrats have rarely addressed the issue.

So what will the President say about malpractice reform? Well, back in 2005, Obama joined Senator Hillary Rodham Clinton “in proposing legislation aimed at reducing both medical errors and lawsuits through a program known as Sorry Works, rooted in the idea that injured patients value an apology as much as money.”

Obama and Clinton rejected the Republican solution of simply capping malpractice claims and explained that real malpractice reform must balance the interests of doctors and patients. “98,000 deaths in the United States each year result from medical errors,” they wrote “but more than 90 percent of these deaths are the result of failed systems and procedures, not the negligence of physicians. Given this finding, we need to shift our response from placing blame on individual providers or health care organizations to developing systems for improving the quality of our patient-safety practices.”

The legislation would have given physicians who disclosed their errors “certain protections from liability within the context of the program, in order to promote a safe environment for disclosure“:

To improve both patient safety and the medical liability climate, the tort system must achieve four goals: reduce the rates of preventable patient injuries, promote open communication between physicians and patients, ensure patients access to fair compensation for legitimate medical injuries, and reduce liability insurance premiums for health care providers. Addressing just one of these issues is not sufficient. Capping malpractice payments may ameliorate rising premium rates, but it would do nothing to prevent unsafe practices or ensure the provision of fair compensation to patients.

Doctors are rightfully concerned about raising malpractice premiums and Obama may also argue that his reform would enhance the practice of evidence-based medicine and create safe harbors for providers who follow best practices.

This afternoon, Rep. Mike Pence (R-IN), Chairman of the House Republican Conference, challenged Obama to include malpractice reform in his health care bill. “Why not bring about reasonable restrictions and limits on medical malpractice claims to end the era of defensive medicine?” Pence asked on the floor of the House. Now that Obama has put the idea back on the table, will Pence support reform?

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