The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Obama’s own Medicare Actuary more confident in Paul Ryan’s ‘Road Map’ cost controls than Obama’s health law

Posted by iusbvision on January 26, 2011

Daily Caller:

The government’s chief actuary for Medicare spending on Wednesday said he had more confidence that Republican Paul Ryan’s plan to reform entitlements would drive down health-care costs than President Obama’s recently passed overhaul.

Richard S. Foster, the chief actuary of the Centers for Medicare and Medicaid Services, made the comment in response to questions from lawmakers during House Budget Committee hearing.

Rep. Chris Van Hollen, the ranking Democrat from Maryland, went on the attack against committee chairman Paul Ryan’s “Road Map” plan, which is a long-term proposal to make entitlement spending solvent.

Van Hollen pressed Foster on whether Ryan’s plan would work, prompting Foster to point out that one of the biggest problems in health care now is that most new technology that is developed increases costs rather than decreasing it.

“If there’s a way to turn around the mindset for the people who do the research and development … to get them to focus more on cost-reducing tech and less on cost increasing technology, if you can do that then one of biggest components of [increasing costs] turns to your side,” Foster said. “If you can put that pressure on the research and development community, you might have fighting chance of changing the nature of new medical technology in a way that makes lower cost levels possible.”

Foster said: “The Road Map has that potential. There is some potential for the Affordable Care Act price reductions, though I’m a little less confident about that.”

The thinking behind Foster’s comment is that a voucher system would reduce the amount of government money available for health care over time, causing consumers to shop around and creating an incentive in the health-care sector to compete for those dollars.

In a brief interview outside the House chamber later in the day, Ryan explained it this way: “There’s only going to be so much money for health care because the economy can only support so much … So is it better spent through the person in a competitive marketplace or through the government under increasing price controls and pressure?”

“If you go through the century, these entitlements consume all money. The GAO calculation assumes Congress is going to wise up and cut back on these programs because people will decide they don’t want 100 percent of their discretionary income going to health care. They want some for food and some for shelter and some for other things. So there will be a curtailment of health care spending in the future,” Ryan said. “The question is which curtailment gets you the better results at going after the cause of health inflation: consumer pressure or government price controls.”

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