Mitchell & Mitchell on Health Care and the Trump Agenda, Part 14: CBO Analysis Distorts Debates

This is Part 14 in an ongoing series regarding changes in health care that may take place—and actual changes that do take place—with the Trump administration. The likely implementation issues to be encountered for both potential and actual changes are described, based on detailed methods of analysis. The emphasis is on what these shifts mean for legal practices and how attorneys may prepare in the most effective ways.

At a time when many possible changes to the health care system are being debated, it is essential for analysis of these proposals to reflect the likely outcomes of the changes being considered.

Yet, there are serious distortions being introduced by the methods of study by the Congressional Budget Office (CBO). These studies fail to consider how reactions to change by individuals and organizations can reshape program outcomes.

The CBO states that “Cost estimates show how federal outlays and revenues would change if legislation was enacted and fully implemented as proposed…” But if reactions by those affected produces change in program outcomes, legislation will not be implemented as proposed. Rather, outcomes will be determined by both the actions taken (acts by Congress) and the responses by those affected.

This general issue has been discussed in parts 12 and 13 in this series. As described, actual program outcomes may differ substantially from those intended by legislation. The results of a broader analysis are discussed in detail in Legal Practice Implications of Changes in the Affordable Care Act, Medicare and Medicaid, cited below.

Consider the CBO analysis of June 26, 2017, regarding the revised Senate version of the proposed American Health Care Act (AHCA) put forward by the House of Representatives. The CBO anticipates that the numbers of uninsured people will rise substantially under the AHCA, due to (1) removal of the individual mandate requiring coverage and (2) as a result of reductions in Medicaid benefits due to caps on payments to states.

There is little consideration given as to how removal of the individual mandate might result in more diverse insurance policy offerings under the AHCA (with some less expensive options, such as catastrophic coverage only) combined with tax incentives and educational programs to help reshape attitudes toward available choices. The outcome might be a reduction in the number of people “opting out.”

By neglecting to address these efforts, the CBO has failed to provide the needed foundation for effective debate.

Similarly, the CBO has not evaluated how Medicaid budget caps might lead to adaptive strategies by states to “do more with less.” There is an assumption that health care strategies are fixed and inflexible, while experience indicates that substantial ingenuity can be displayed in finding new ways to meet care needs. The widespread use of communications technology by patients and providers may be one type of game-changer.

By neglecting this potential, the CBO has also failed to provide an adequate basis for debate.

As a result of such confined approaches to analysis, the CBO prevents possible reactions and adaptation to changes from becoming part of policy debates. Techniques for considering likely reactions are now available and could be applied, but do not fit easily within the current ways in which legislative options are described.

This post was written by Ferd H. Mitchell and Cheryl C. Mitchell, Thomson Reuters authors and attorney partners at Mitchell Law Office in Spokane, Wash. They are active in elder law and health law practice areas and have been working together on programs and activities on behalf of the elderly and in health care for more than 25 years. During their studies, they have visited and evaluated the health care systems of Japan and several countries in Europe to learn how the needs of the elderly are assessed and met in other countries, and they have been better able to understand the U.S. health care system and related care issues from these visits. More about the lessons learned from the ACA and issues involved in health program changes may be found in the 2017 edition of the authors’ book, Legal Practice Implications of Changes in the Affordable Care Act, Medicare and Medicaid, published by Thomson Reuters. More about these methods of analysis may be found in Mitchell & Mitchell, Adaptive Administration, published by Taylor and Francis. Follow the links below to read previous installments from this series: