Thursday
Jan312008
Dr. Peter Orszag Shares Congressional Budget Office's Findings Regarding Health Care Spending With the Senate Budget Committee
Thursday, January 31, 2008 at 12:37PM
Dr. Peter Orszag, Director of the Congressional Budget Office (CBO), testified today before the Senate Budget Committee regarding the crisis generated by increasing health care costs.
In testimony that Chairman Kent Conrad (D-ND) called “sobering,” Dr. Orszag displayed CBO’s projections that health care spending could double by 2035 and become 20% of the economy by 2082 should current policies and practices remain in place. He stated that such high expenditures cannot be allowed to take place.
CBO’s analysis finds that non-Medicare, non-Medicaid health care costs are rising at alarming rates, due in large part to rapid expansion in medical technologies and capabilities; that is, the variety of care continues to increase, expanding costs. Other factors contributing to this increase include increased incidence of obesity, spending per obese person, aging of the population, and industry incentives to provide more health care regardless of quality.
Dr. Orszag highlighted extreme expenditure differences across regions and examples of some hospitals spending up to twice as much as others for the same treatment. He that in his research he had been faced with the ironic question, “How can the best medical care in the world cost twice as much as the best medical care in the world?”
Given the severity of the consequences of inaction, Chairman Kent Conrad (D-ND) and ranking member Judd Gregg (R-NH) shared their intention of going to mark-up on a proposal to resolve this crisis in a bipartisan fashion.
In testimony that Chairman Kent Conrad (D-ND) called “sobering,” Dr. Orszag displayed CBO’s projections that health care spending could double by 2035 and become 20% of the economy by 2082 should current policies and practices remain in place. He stated that such high expenditures cannot be allowed to take place.
CBO’s analysis finds that non-Medicare, non-Medicaid health care costs are rising at alarming rates, due in large part to rapid expansion in medical technologies and capabilities; that is, the variety of care continues to increase, expanding costs. Other factors contributing to this increase include increased incidence of obesity, spending per obese person, aging of the population, and industry incentives to provide more health care regardless of quality.
Dr. Orszag highlighted extreme expenditure differences across regions and examples of some hospitals spending up to twice as much as others for the same treatment. He that in his research he had been faced with the ironic question, “How can the best medical care in the world cost twice as much as the best medical care in the world?”
Given the severity of the consequences of inaction, Chairman Kent Conrad (D-ND) and ranking member Judd Gregg (R-NH) shared their intention of going to mark-up on a proposal to resolve this crisis in a bipartisan fashion.
There is hope coming for prescription consumers
Today in a press conference held by Senators Byron Dorgan (D-ND), Olympia Snowe (R-ME), John McCain (R-AZ), and Debbie Stabenow (D-MI) an announcement was made about the introduction of a drug importation legislation that will reduce the cost of prescription drugs in the United States. The “Pharmaceutical Market Access and Drug Safety Act” the Senators stated will bring consumers immediate relief and will force the pharmaceutical industry to lower drug prices in the United States.
The bill, which is the same as last year’s proposal by President Obama, will allow U.S. drug wholesalers and licensed pharmacies to import FDA-approved medications from Australia, Canada, Europe, New Zealand and Japan. The costs in these countries, which are 35 to 55 percent lower than in the U.S. will allow Americans to benefit from these prices also. The legislation only applies to FDA-approved prescription drugs produced in FDA-approved plants from countries with the same safety standards.
At the conference Senator Dorgan pointed out a comparison between the drug Lipitor that is made in Ireland which gets distributed to both Canada and the United States. “I have in fact two bottles here, the only difference is in color, one is red and one is blue...The only difference is the U.S. consumer gets to pay more than twice as much for the identical pill put in the same bottle. That’s unfair we believe.”
Senator Stabenow stated “This is not like buying a pair of shoes or buying some other commodity when you cant get your medicine, it literally is life threatening so this is a very serious issue for people and we can make a dramatic difference by passing this legislation.”
Senator Dorgan said that he is confident that President Obama and his administration will support this bill because Obama introduced the exact piece of legislation last year. “He and his chief of staff co-sponsored this identical bill...You would expect a President that signed up as a member of senate for this identical bill to support it as he already has done in his budget message.” Dorgan concluded.