While Congress is now in its August recess, the country will continue to grapple with a health reform package that is likely to be significantly different from the earlier versions. Among the catalysts for the ongoing debate was the Congressional Budget Office's (CBO) estimate of the projected price tag of over $1 trillion for the original proposal that almost ground the prospects of real reform to a halt.
The CBO was established 25 years ago to "provide Congress with objective, non-partisan, and timely analysis to aid in economic and budgetary decisions." It has turned out to be a powerful voice in the discussions of many important bills.
Within its roles and responsibilities, however, lies a very significant limitation:
According to CBO's cover letter to the original scoring report Health Care Reform and the Federal Budget, "the CBO does not provide formal cost estimates beyond the 10-year budget window because the uncertainties are simply too great."
Let me repeat that, according to its mandate, the CBO does not look at any return on investment beyond 10 years.
Benjamin Franklin once famously remarked, "An ounce of prevention is worth a pound of cure." Unfortunately, what this means is often, according to the CBO, an ounce of prevention isn't worth anything at all. Consider the implications for this seldom-considered accounting rule. When the CBO scores a bill it gets to apply the savings, if any, that occur during the 10 year window to offset the costs. This 10 year rule means that the value of the return on almost every dollar government invests in our young children, say for their education, or for investments in preventive and public health, cannot be reflected in CBO scoring. Because those savings or long-term value will come later. Oh sure, sometimes prevention returns come sooner than 10 years, but often the really big value is for illness prevented, death delayed and health care costs deferred beyond 10 years. Just think of the value of helping children become healthier and more productive adults. This really pays off when they are adults, well beyond a 10-year window.
Any parents who have sacrificed financially for their children for school or college, or anyone who no longer suffers from a chronic health problem, know first-hand how early investments are often needed for lifelong gains.
Consider what CBO's narrow method of scoring means for health reform:
• An investment in covering any one of the 9 million uninsured children in this country is scored as pure cost, unless the savings occur while they are still children -- despite the obvious long-term benefits incurred by ensuring that our children get off to a healthy start in life.
• An investment in early detection of disease or prevention of complications, like diabetic foot or eye care, is scored as an added cost, in spite of the long term value accrued by avoiding catastrophic treatment and disability costs.
• An investment in disease prevention, such as infant vaccinations or smoking cessation, has its value diminished if the infection or cancer were to occur more than 10 years later.
• Any investment to address how our health is affected by where we live, learn, work or play is minimized or not gauged accurately because much of its benefit to health occurs on a longer-term horizon.
In other words, according to the current CBO scoring, we do not see the value in making sure a one-year-old child in West Virginia doesn't get the measles as a teen or making sure a 52-year-old father of three in Michigan doesn't contract colon cancer. We will gladly score the cost to amputate the 63-year-old diabetic woman's foot but not value the course of screening or treatment that would have prevented the amputation in the first place.
If what we score reflects what we value, then I am afraid our values in health have been misplaced for years. And the new interest in prevention in the health reform discussions could be doomed if we don't accept that some of the most important improvements, especially with our children will occur more than 10 years later. Fortunately, it appears that some House and Senate leaders are considering a major investment in prevention despite CBO scoring.
I am a fan of Richard Thaler and Cass Sunstein's book, Nudge, which shows how seemingly small decisions can have big ramifications and how, sometimes, a society and we as individuals are unaware of how choices are being made for us by default. This CBO accounting rule is a perfect example. Right now it is nudging our policymakers away from counting what matters, the improved health of our country, just because it may take a little longer like for our children or prevention "to pay off". No doubt most Americans would be willing to pay now to help our children even if the dollars spent now may take a little longer to show their ultimate value. We are measuring each health reform and long term outcomes by a monolithic yardstick -- 10-year CBO scoring -- without ever questioning whether the yardstick measures what really matters to us as a people.
Having worked in government, I have high regard for civil servants doing what is asked of them and am particularly sympathetic to the restrictions of bureaucratic rules, such as those placed on the CBO. As a man who has dedicated his life to science, I also appreciate the difficulty of assessing accurately the return of every health investment beyond a 10-year horizon.
But as a doctor, and more specifically, a pediatrician, I know these truths to be self-evident: a society that fails to invest in its children will not flourish, and merely scoring costs in the short term and not determining the value of health in the long term has helped us have the most expensive medical care in the world with a shorter life span than all our competitors. It is hard to imagine how we could have done worse. Looking toward prevention allows to us to think about getting health at a good value...and to me that's a good idea.
It is time to re-consider CBO's 10-year limit. We know more and can more accurately estimate our health returns than we could at the CBO's inception in 1974. We need to make it easier for our political leaders to see long term solutions to what are often inappropriately seen as only short-term problems but really are the culmination of the failure of short "fixes" of the past. In the meantime, over the month more will be made about the "overwhelming cost of health reform." But instead of being paralyzed by the potential price, I ask you to use common sense and realize that while the costs may seem high today, what lies beyond the horizon is of an immeasurable value. In our founding fathers' day, this turned out to be a free America. In our own time, let it be a healthier, more economically sound one for our children and all of us.
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