Is the evolution the result of randomness? Or is there behind it some intelligent design?
During the primary season, Sen. Clinton put the annual cost of her health plan at $110 billion, compared to Obama’s $60 billion. The difference: both candidates pledged to increase taxes on capital (rescind the Bush tax cut for “the rich”). But Clinton claimed additional phantom savings from such measures as electronic medical records (EMRs), managed care, more efficient insurance, etc.
Phantom savings are savings that (1) no one seriously thinks are going to materialize; (2) sound good because they do not threaten the status quo in any serious way (thereby guaranteeing they will not materialize); and (3) are easily forgotten after the fact when they fail to materialize. Score one for Obama for not yielding to the temptation to make things up. But that was then.
Now Obama is taking a page from the Clinton playbook and shamelessly doubling the stakes. Savings will amorphously appear in every part of the system, according to his advisors. Hard to say who will get what or how they will get it (these things being very complicated), but count on $200 billion savings for ordinary people or $2,500 for “a typical family” every year.
For the record, the Congressional Budget Office [here] estimates that EMRs will save very little money. The federal government found that its own experiment with managing the chronically ill saved not a dime [here]. Other studies, including one by RAND researchers, predict that managed care or coordinated care or insurers-telling-doctors-how-to-practice-medicine-under-any-other-name may not save money, and in some cases actually increases spending.
Note: I am adding this new manifestation to my analysis of the Obama plan [here].