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CBO Scoring Shortchanges Preventive Healthcare Spending

Margaret Dick Tocknell, for HealthLeaders Media, September 26, 2012

His concerns are echoed by the Partnership to Fight Chronic Disease (PFCD), a coalition of advocates, providers, business groups, and health policy experts, which has identified three areas in which it says additional information is needed for policymakers to fully assess the effect of prevention programs:

  • Baseline assumptions. Healthcare expenditure estimates depend on baseline assumptions, including the current health status of a population and the impact of those trends. The CBO needs to be more transparent in indentifying its baseline for analysis.
    For example, the PFCD contends that it is not clear how the rise in obesity is factored into the baseline for current or projected spending, although research has shown that Medicare spending is directly affected by the obesity status of people entering the program.
  • Broader perspective on impact. CBO scoring does not currently include analysis of the broader impact a policy change will have on healthcare and the economy. PFCD notes that because Medicare is the largest payer for healthcare services, changes to Medicare policy will likely impact the entire healthcare system. But for CBO purposes, only the impact on federal Medicare spending is captured. Wellness and prevention programs that impact population health affect healthcare spending in the private sector and have overall effects on the economy. Providing analysis of the overall impact of Medicare changes would provide lawmakers with important information.
  • Long-term analysis. The CBO scoring windows cannot sufficiently capture the long-term value of population health improvement programs. Without an understanding of the long-term value legislation may provide, lawmakers are not able to distinguish between federal spending without expectation of a return and federal spending as an investment.
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1 comments on "CBO Scoring Shortchanges Preventive Healthcare Spending"


Jacob Kuriyan (9/27/2012 at 10:27 AM)
Congressman Burgess is on the right track but his solution is a poor one. He is right in demanding CBO, HHS and CMS to share their data and calculations of savings estimates from preventive care programs. Only then can other experts comment on how reasonable they are and what other adjustments are needed. This happens all the time in economics. The Bureau of labor statistics releases the data and economists nationwide interpret them. The public can then choose the results that sound the most reasonable. But he is wrong in trying to ask CBO to extend the scope of their calculatuions to beyond 10 years. That is absolutely unnecessary. We can estimate the savings from preventive care programs for much shorter periods. But it requires inegnuity and skill.