Thursday, July 16, 2009

AMA Gives Thumbs Up, CBO Gives Thumbs Down

It's been a topsy-turvy day on the health reform beat. First, the American Medical Association surprised most people and endorsed the House version of the legislation. Then the head of the Congressional Budget Office delivered an assessment that many say could be a death blow for the legislation being crafted by Democrats - that it might actually hurt rather than help the economy.

The AMA sent a letter to House Ways and Means Chairman Charles Rangel, D-NY, endorsing the health reform proposal put forward by three House committees. The New Republic's Jonathan Cohn attributes the decision in part to the approach the House bill takes on the annually scheduled reduction in Medicare payments, known as the Sustainable Growth Rate (SGR) formula

The AMA's letter says the legislation "recognizes that fundamental Medicare reforms, including repeal of the sustainable growth rate formula, are essential to the success of broader health system reforms."

Under questioning by members of the Senate Budget Committee, CBO director Douglas Elmendorf said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."

"On the contrary," Elmendorf said, "the legislation significantly expands the federal responsibility for health-care costs."


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