Painting a prettier picture

At his weekly briefing with the press Tuesday, House Majority Leader Steny Hoyer (D-Md.) urged us all to read an analysis about the Democrats’ bill from an economics professor at Harvard University named David Cutler, published in The Wall Street Journal that same day. It is titled “Health Reform Passes the Cost Test,” and it claims the reforms could save $600 billion over the next decade. Here it is, definitely worth a read.

To begin with, the author grades the legislation on the basis of whether or not it will bend the cost curve and he gives it “full credit” on six of 10 cost-cutting measures. Those provisions receiving top grades include: forming insurance exchanges, reducing excessive prices, moving to value-based payment in Medicare, empowering an independent Medicare advisory board, combating Medicare fraud and abuse and investing in new information technology. Provisions receiving partial credit include: malpractice reform, prevention and the taxing of generous insurance plans. The public option, not included in the final bill, gets no credit.

Cutler writes that the reform would be near perfect if both parties were willing to raise taxes and if “Republicans negotiated malpractice reform for their overall support.” He also writes that the reason the Congressional Budget Office doesn’t assess as much savings as he does in the plan is that the CBO scorekeeping doesn’t view anything but direct price reductions as cost-cutters. He states that the CBO “has consistenly estimated that policies built around changing incentives and thus encouraging more efficient care will not have any effect on cost trends. My own calculations, mirrored by other observers and a host of business and provider groups, suggest that the reforms will save nearly $600 billion over the next decade and even more in the subsequent one.”

Recall that major economists, including conservative ones, recommended stimulus last winter. Now, of course, only 6 percent of Americans believe the program has produced jobs, though experts still maintain that the program saved the economy from collapse. You may be surprised to see a rosy assessment of healthcare reform, but they exist.

CAN DEMOCRATS REVIVE ENERGY REFORM? Ask A.B. returns Tuesday, March 16. Please join my weekly video Q&A by sending your questions and comments to askab@digital-staging.thehill.com. Thank you.