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Letter to the Honorable Dave Camp 1 (June 2009)

handle is hein.congrec/cbo9373 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director U.S. Congress Washington, DC 20515 June 16, 2009 Honorable Dave Camp Ranking Member Committee on Ways and Means U.S. House of Representatives Washington, DC 20515 Dear Congressman: You asked the Congressional Budget Office (CBO) to review the documents accompanying a letter to the President in which a group of health care industry stakeholders describe their commitments to reduce health care costs, strengthen quality, and improve access. In particular, you asked CBO to determine the level of savings that their proposals would yield for the federal government. The industry leaders' attention to these goals and agreement that significant savings can be obtained are no doubt welcome. However, most of the proposals are steps that do not require the involvement of the federal government or are not specified at a level of detail that would enable CBO to estimate budgetary savings. Some of the initiatives would bolster good medical practice (for example, promoting improved hand hygiene to prevent infections and providing guidance to patients about their medications before they are discharged from the hospital) and would probably occur to a large degree in the absence of federal legislation. Others-like developing new medications to treat Alzheimer's disease-also would not necessarily involve the federal government. As you know, a CBO cost estimate for a legislative proposal must report the savings that would occur because of the law. To the extent that certain practices would be adopted anyway, without legislation, they would not affect the budgetary scoring of a proposal, although they might affect CBO's baseline projections of the costs of federal programs. Private or governmental initiatives that would affect the amount of spending that occurs in the private sector can have a muted effect on the federal budget by bringing about a change in the composition of compensation between tax- excluded health benefits and taxable wages. But often, reducing federal spending would require corresponding legislation. For example, the initiative to standardize administrative transactions in order to lower providers' administrative costs would have to be coupled with reductions in Medicare's payment rates for providers in order to reap savings for Medicare. Presumably, the providers would www.cbo.gov

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