"CBO’s work will make or break this enterprise," said Max Baucus at this morning's hearing on the Congressional Budget Office's health care budget book. "It’s a pleasure to welcome CBO’s new Director, Doug Elmendorf, to the committee. We hope that this will be the beginning of a beautiful friendship."CBO occupies a weird space in Washington. They decide what legislation costs. They may get it right or they may get it wrong, but the number they settle on is the number legislators agree to use. And so this morning's hearings featured powerful senators begging a small, bearded budget geek for favorable judgments as if he were the Oracle at Delphi.Ranking Republican Chuck Grassley asked Elmendorf if prevention and comparative effectiveness review would really save money. "I think it's clear those changes will result in improved health," replied Elmendorf. "Cost is more complicated." He used his next question to ask about a public plan. Do you believe, he asked, that over time, a public plan would crowd out private coverage? "Designing a system where the public plan could compete on a level playing field with private plans is extremely difficult," said Elmendorf. "We are wrestling now with how we'd model proposals to do that. Provider payments are one issue. But there are others. Administrative costs. What sort of risk pooling happens? Does the public plan get sicker patients or does the private plan? It's true thatf a public plan pays lower provider payments than private plans, than that will be a leg up for the public plan. But that's not the only way."It's an interesting admission: Elmendorf and his team doesn't even know how to model certain key issues in the debate. Pat Roberts dug into this during his time. "CBO does more than just estimate the cost of our policies," he says. "It guides policy. And insofar as it tries to predict people's reactions to our policy changes, it's almost impossible. I think we all appreciate that trying to the effects of policy changes in the complex world of health care is very challenging. And I'd like to suggest as fact that the enormous difficulty estimating the effects of our actions and the unintended consequences of our policies is just one of the many good reasons that we should act with tremendous restraint as we wade into these policies. I said wade, but I think we are in fact diving headlong into a foot deep pool."Elmendorf agreed.Related: The power of the CBO. THE FINANCE COMMITTEE MEETS THE CBO.
"CBO’s work will make or break this enterprise," said Max Baucus at this morning's hearing on the Congressional Budget Office's health care budget book. "It’s a pleasure to welcome CBO’s new Director, Doug Elmendorf, to the committee. We hope that this will be the beginning of a beautiful friendship."CBO occupies a weird space in Washington. They decide what legislation costs. They may get it right or they may get it wrong, but the number they settle on is the number legislators agree to use. And so this morning's hearings featured powerful senators begging a small, bearded budget geek for favorable judgments as if he were the Oracle at Delphi.Ranking Republican Chuck Grassley asked Elmendorf if prevention and comparative effectiveness review would really save money. "I think it's clear those changes will result in improved health," replied Elmendorf. "Cost is more complicated." He used his next question to ask about a public plan. Do you believe, he asked, that over time, a public plan would crowd out private coverage? "Designing a system where the public plan could compete on a level playing field with private plans is extremely difficult," said Elmendorf. "We are wrestling now with how we'd model proposals to do that. Provider payments are one issue. But there are others. Administrative costs. What sort of risk pooling happens? Does the public plan get sicker patients or does the private plan? It's true thatf a public plan pays lower provider payments than private plans, than that will be a leg up for the public plan. But that's not the only way."It's an interesting admission: Elmendorf and his team doesn't even know how to model certain key issues in the debate. Pat Roberts dug into this during his time. "CBO does more than just estimate the cost of our policies," he says. "It guides policy. And insofar as it tries to predict people's reactions to our policy changes, it's almost impossible. I think we all appreciate that trying to the effects of policy changes in the complex world of health care is very challenging. And I'd like to suggest as fact that the enormous difficulty estimating the effects of our actions and the unintended consequences of our policies is just one of the many good reasons that we should act with tremendous restraint as we wade into these policies. I said wade, but I think we are in fact diving headlong into a foot deep pool."Elmendorf agreed.Related: The power of the CBO. 
