Saturday, April 03, 2010

A second White House Seder? Larry Summers sings Dayenu to Martin Wolf over health care reform

100-odd years ago, early in 2009, Obama and Peter Orzag were heavy on the mantra that "healthcare reform is entitlement reform"-- i.e. that "bending the cost curve"on healthcare would be the single most important step to erasing the country's structural deficit.  Here's how Peter Orzag put it in Obama's fiscal summit on Feb. 23, 2009:
Health care is the key to our fiscal future.

So to my fellow budget hawks in this room and in the rest of the country, let me be very clear: health care reform is entitlement reform.

The path of fiscal responsibility must run directly through health care.

We also must recognize that reforms to Medicare and Medicaid will only succeed in the context of slowing the spiraling growth of overall health care costs.
In an interview published in the online Financial Times today, Larry Summers, asked by Martin Wolf how other nations could have confidence that the U.S. will put its long-term fiscal house in order,  suggested that the Administration has already laid the most important cornerstone  -- again, that healthcare reform is entitlement reform, and that the cost controls in the Patient Protection Act have teeth.

Perhaps Summers was fresh from a Seder: his litany of the virtues of the Medicare Individual Payments Advisory Board (boldfaced below) swings with the repetitive glee of the Passover song  "Dayenu," which marvels at the extent of God's mercies in making the Exodus happen:
I think the progress implicit in the Health Bill is often underestimated. If someone had said two years ago that the United States would form a commission to address Medicare costs and more generally federal healthcare spending costs, and make recommendations, that would have been welcome. If they had said that the Commission would have a fast track for its recommendations to Congress, that would have been even more welcome. If they had said that the Commission’s recommendations would go into effect, unless Congress vetoed their recommendations by passing new legislation, that would have been even more impressive. If they had said that such a Commission would be associated with fairly rigorous numerical targets as to how much in savings that had to be found, that would have been still more impressive. And if it had been suggested that not just was this Commission being formed on a one-off basis but that such a Commission would operate every year for the next generation, I think that would have been yet more impressive. And it’s exactly that kind of mechanism that is only one of the cost control measures contained in the president’s healthcare bill.

If one looks at the IPAB, Individual Payments Advisory Board, which offers that potential to contain federal costs, if one looks at the range of mechanisms for innovation in everything from results-based reimbursement to preventive medicine, if one looks at the tax measure that escalates at rates far slower, rates basically in line with the CPI (consumer price index), far slower than healthcare inflation and serves as a benchmark in this system, I think that with respect to the single largest long-run driver of the federal deficit - healthcare costs - something quite extraordinarily broad, with extraordinary potential, has been put in place.

Now, what future Congresses do will obviously be important, the quality of the execution will obviously be important, but I think in terms of earnest on the long term federal deficit problem, the set of measures in this Bill, which do cumulatively take $1.2 trillion out of the deficit, in the second decade even while meeting what’s been a long-term liability of American society, 30 million people without healthcare coverage, is actually a quite remarkable deficit reduction achievement. 
 Compare "Dayenu"- the first five verses below, the whole here:
If He had brought us out from Egypt, and had not carried out judgments
against them - Dayenu, it would have sufficed!
If He had carried out judgments against them, and not against their idols -
Dayenu, it would have sufficed!
If He had destroyed their idols, and had not smitten their first-born -
Dayenu, it would have sufficed!
If He had smitten their first-born, and had not given us their wealth -
Dayenu, it would have sufficed!
If He had given us their wealth, and had not split the sea for us - Dayenu,
it would have sufficed!
Back in the hazy past of Obama's first 100 days, there were jokes about him walking on water. Perhaps Summers' subtext is that by holding out for what he used to call "MedPAC on steroids," Obama has parted the waters of the Red (Ink) Sea.

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