What if the umpire is wrong?

When I was about 10, I had a vivid experience in Little league baseball that I can remember like it was yesterday. I got called out on strikes, and I argued with the umpire, telling him the last pitch was not strike 3, that it was a ball. After listening to me for a bit he said something I will never forget. "Son, it is nothing until I call it. Go sit down."

Doug Elmendorf, Director of the Congressional Budget Office (CBO) is the umpire for health care reform. There needs to be an umpire in Washington for these sorts of things, and CBO has a pretty good track record and is typically fairly conservative (and both Democrats and Republicans eventually get angry with CBO for not seeing things their way).

Steven Parente, a Professor at the University of Minnesota, who was a health policy advisor of Senator McCain's has an op-ed on scoring of health reform proposals here. Basically, he (and his consulting company, HSI) has his own 'scoring' model and he says that his is better than CBOs model, because it incorporates more recent data on the uptake of high deductible health plans in the private market that have become more common over the past 5 years or so. Now, there is nothing academics like better than dueling models (mine is better than yours/is not/is so) and they typically end in something like 'your mama.' As they say, when the stakes are low, the politics are vicious. But, the stakes are really high for this, because the CBO scoring of congressional bills has been very consequential in changing the debate. If you recall, when the Senate HELP committee bill came out mid-June, the CBO scoring estimate was devastating, and showed on a modest increase in insured persons of around 20 Million folks. Back to the drawing board they went.

Well, Parente's model said the HELP bill would insure about 47 Million people, or about 99% covered. In other words, if CBO used his model, then the headline if June would have been 'US on the Cusp of Insuring Everyone.'

His op-ed focuses on the cost of all the bills....meaning, he notes that cost estimates for the Democractic reform bills are much higher than CBO says, but that is primarily because he says they will cover many more people. He doesn't make this clear in his op-ed, which is an omission, I think. It makes it seem as though the Dem bills will just cost more to cover same number of people, but his models say they will cost more because they will cover many more people.

Of interest for folks in NC, he has a new score of the Patients' Choice Act, co-sponsored by Senator Burr (R-NC) which says that it will cover about 34 Million folks. Now, CBO hasn't scored this Act yet, so we can't compare CBO score vs. the HSI score. He also has a recent re-score of the House Tri Committee bill, that he says will cover about 40 Million people, many more than CBOs estimate.

It is clear that the HSI scoring model has much more behavioral action (insuring uninsured persons) than the CBO model. Which is correct? I have no idea. But, Parente notes that his model outperformed CBO in forecasting uptake of high deductible plans over the past few years...so he really is saying his model is better.

Here is a list of peer review papers that Parente and colleagues have published, many focused on health savings accounts and high deductible health insurance plans, which is their thing. Macro forecasting is not my thing, so I am not sure what to make of the differences between Parente's model and CBO, but they are big differences.