But it is largely the difficulty in setting a high scientific bar in a very difficult area. Most of the studies just really aren't conclusive enough to feel confident that I could say to you, "Yes, this is a great idea and you will save a lot of money.' Senator LINCOLN. Mm hmm. Well, I am not necessarily saying that we have got to save all the money in that category, but if we can do something that actually does help us in terms of better use of our resources and providing better care, it seems to me it is a no brainer that it is something we should certainly be looking at. So you are saying that there is no conclusive studies that show that not only assessments but also the new medical physical in the Medicare program, are cost effective. Is that what you are saying? Mr. HOLTZ-EAKIN. Yes. Senator LINCOLN. You don't feel like those produce some cost benefit? Mr. HOLTZ-EAKIN. There are two levels to it, and I will give you a longer answer than you deserve for that reason. The first is just at the level of the economics. Does it save money? That is the kind of question where the research is inconclusive at this point because it is difficult to actually do the experiment you would like, which is give some people the checkup, exactly identical people don't get the checkup, and then track their health care costs from that point forward to the end of their lives. Then just compare the two. That is just not doable. So there are a whole series of halfway houses in which the scientists live that are short of that. They try to extrapolate from their experience to that experiment that we can't do, and that is just simply hard to do. So the research, which we tried to survey pretty carefully in a letter we wrote to then Senator Don Nickles, was really about how difficult this is to conclusively decide whether it will save money. So that is No. 1. No. 2 is, Will it show up on the Federal budget? If this is really a good thing and it is saving money, it could be that people are doing it already. If you then put it into the Medicare Modernization Act, all you do is then cover the cost of it. You put the cost on the Federal books, but you don't get any of the savings because they were doing it anyway. So the answer is a mixture of those two things. One, would it really lower total economic costs in the health system? Two, would those costs show up in lower Federal outlays? That is why it is difficult to give really definitive answers in this area for things that are otherwise very appealing ideas. Senator LINCOLN. Thank you, Mr. Chairman. Senator KOHL. Thank you, Senator Lincoln. Dr. Holtz-Eakin, before we let you go, you are the director of CBO, so would you place this into context versus Social Security, the costs for which we do not have any sources of revenue over the next 50 years, one versus the other. It is our understanding that there is no comparison in terms of Medicare versus Social Security. Would you put that into context? Mr. HOLTZ-EAKIN. Certainly. There is no comparison, and I have told many people that it is my job to say apocalyptic things about our fiscal outlook in public, and this is really how it sizes up. Right now we spend about four cents on a national dollar on Social Secu rity, a bit above. We spend about four cents on our national dollar on Medicare and the Federal share of Medicaid. So they are about even right now. If we repeat the experience of the past 3 decades, over the next 50 years, and we layer in the demographics, Social Security will rise from 4 to about 62 cents. Medicare and Medicaid will rise from 4 to 20 cents or the current size of the Federal Government. It is not even close. The great spending pressures are in the health programs. Senator KOHL. So of all the problems fiscally that we are facing in terms of Medicare, Medicaid, Social Security, this Medicare-Medicaid is clearly the big elephant, the 800-pound gorilla? Mr. HOLTZ-EAKIN. They are certainly the big Federal dollars and they reflect the underlying growth of health care costs in the United States. It is not just the programs. It is the underlying health care system as a whole. Senator KOHL. That is dramatic. Well, we thank you so much for being here. You have been really important to this Committee, and your experience and knowledge is invaluable, and we look forward to continue to work with you. The CHAIRMAN. Mr. Chairman? Senator KOHL. Yes. The CHAIRMAN. May I ask one other question. In light of that and as we try to wrestle with how we get additional revenues or how we find a way to meet this obligation, the population that is using so much of the resources currently are any of these chronic conditions the result of personal choices that lead them to this, that would warrant that they bear some greater portion of their own co-pay or something like that? I mean Mr. HOLTZ-EAKIN. The seven we looked at, I will just run down. The CHAIRMAN. OK. Mr. HOLTZ-EAKIN. You know, they are asthma, obstructive pulmonary disease, renal failure, congestive heart failure, coronary artery disease, diabetes, and senility. The CHAIRMAN. I am thinking of smoking. I am thinking of you know some people would say alcoholism is not a choice. It is a disease in itself. But a lot of these conditions, not all of them, are taken on by people's individual choices and that is not fair to everyone else who is making the right kind of health choices. Mr. HOLTZ-EAKIN. Certainly, lifestyle figures in many of these chronic conditions. I think that is clear. It is not the sole determinant. But it certainly figures in that, and the degree to which those lifestyles are altered as a matter of choice would alter these outcomes. The CHAIRMAN. Well, it seems to me people do respond to incentives, and if there is an additional incentive to lifestyle choices that like smoking, I would just I find it repulsive to say to everyone else who is making the right choices, you have got to pay for everybody making the wrong choices, and I don't know. I am just thinking out loud. Senator LINCOLN. Can I add something to that? The CHAIRMAN. Yeah. Senator LINCOLN. That is why I think the screening is so important, because if it is something like alcoholism, the earlier the screening and the earlier the diagnoses, the treatment is less cost ly. So it would seem that the screening and the other things that I think are so important, you are saying that there is not a scientific ability to be able to figure out what the cost savings would be for that, but I mean just commonsense tells you that if you can treat an ailment earlier, you can diagnose and treat it earlier, then the long-term costs are not going to be as much. But I understand your side. I am married to a research physician, so I know there are scientific things that you have to use, but, still, I think commonsense plays a little bit in what we decide. Mr. HOLTZ-EAKIN. I am economist by training. I left commonsense behind. I am an incentives guy. Senator KOHL. Again, just to put this thing it its context, would you agree that looking ahead at our fiscal condition, as the director of CBO, perhaps the single most important challenge we face is Medicare and trying to contain its projected cost? Mr. HOLTZ-EAKIN. Yes. I think that the rising cost of health care is the single most important domestic challenge the United States has today. It is very simple. Senator KOHL. Thank you very much. Mr. HOLTZ-EAKIN. Thank you. [The report follows:] |