June 3, 2011
In the current fiscal year, the federal government will spend about $1 trillion on health care. More than half of that will be through Medicare, a little more than a quarter on Medicaid and the Children's Health Insurance Program (CHIP), and the remaining fifth on veterans’ health care, the military health system, health research, and other programs. Those outlays represent nearly 7 percent of gross domestic product (GDP). In addition, federal revenue is held down by the rapid growth of private health spending. Because businesses’ contributions to their employees’ health insurance are not subject to either the income or payroll tax, the share of employees’ compensation that is not taxed rises when those contributions rise faster than total compensation.
Spending on federal health programs would increase rapidly under the policies we’ve followed in the past, because of both rising costs per person and the aging of the population. Legislation enacted last year that expands the government’s health care programs will boost spending even more. Even incorporating the nearly 30 percent reduction in the rates Medicare pays to physicians that is scheduled to occur at the end of this year under current law, CBO’s projections still show spending on federal health programs rising relative to GDP during the next decade and beyond.
Because health policy remains a central concern of the Congress, analysis of alternative health policy approaches and proposals remains a central activity of CBO. Some members of our terrific health team from the past few years have retired or moved on to other opportunities, and we have sought other talented people to join us. When we hire people to work on any topic at CBO, we aim to build a group with a wide variety of perspectives, extensive experience, in-depth knowledge, and strong analytical skills. We’re proud of the talents and accomplishments of the teams of CBO people that work on health care and many other topics. Through a collaborative process and extensive discussion of key analytical issues, we endeavor to bring all of those talents and perspectives to bear on the difficult analytical questions that arise during the legislative process. We take great pride in effectively carrying out our responsibility to provide Congress with objective, independent, nonpartisan, and timely analysis to aid in economic and budgetary decisions.
Although this blog usually focuses on CBO’s products rather than the people who produce them, this seems like a good opportunity to make an exception and to tell you about the management team for CBO’s health analysis. That analysis is a joint effort of the Budget Analysis Division and the Health and Human Resources (HHR) Division, with additional participants from the Microeconomic Studies Division and the National Security Division.
Linda Bilheimeris about to start as the new Assistant Director for Health and Human Resources. Linda was an analyst and then a deputy assistant director for health at CBO between 1991 and 1999. Before coming to CBO the first time, Linda received a PhD in economics from Harvard, taught at the University of Arkansas, had a senior role in the Arkansas Department of Health, and worked at Mathematica. After leaving CBO, she went on to be a senior program officer at the Robert Wood Johnson Foundation. Linda is now the Associate Director for Analysis and Epidemiology at the National Center for Health Statistics of the Centers for Disease Control and Prevention, where she oversees a group of about 70 epidemiologists, statisticians, demographers, physicians, and programmers. In the past year, she has authored or co-authored articles on evaluating metrics for improving population health, measurement issues in the analysis of health disparities, and trends in health status and health care use among older men. (See Linda's bio for more details.)
Jim Baumgardner will continue as a Deputy Assistant Director in the Health and Human Resources Division. Jim has been at CBO since 1994 and has been Deputy Assistant Director since 2001. He has been involved in essentially all of CBO’s health analysis during the past decade. Jim was previously an assistant professor of economics at Duke and received a PhD in economics from the University of Chicago.
Jim will be joined as a Deputy Assistant Director by Melinda Buntin. Melinda is now the Director of the Office of Economic Analysis and Modeling in the Office of the National Coordinator for Health Information Technology at HHS. In this job, she has used economic analysis and models to predict and understand the factors driving the adoption, meaningful use, interoperability, and return on investment of electronic health records. She was previously associate director of RAND Health’s Economics, Financing, and Organization Program and has worked on wide range of topics, including health care delivery systems, design of insurance benefits, effects of consumer-directed health care, disease management, health savings accounts, care use by the elderly, and more. Melinda has a PhD in health policy from Harvard. (See Melinda's bio for more details.)
In addition, Jessica Banthin will be joining HHR as a Senior Adviser. Jessica is now the Director of the Division of Modeling and Simulation at the Agency for Healthcare Research and Quality, where she has worked for the past 20 years. Her recent work has centered on the development and application of microsimulation models of Medicaid eligibility and a new model of employer behavior. She has a PhD in economics from the University of Maryland. Jessica will work on our health insurance modeling, the health aspects of our long-term model, and other models yet to be launched. (See Jessica's bio for more details.)
Health analysis in the Budget Analysis Division is led by Holly Harvey. Holly began serving in that role in early 2009. She was previously an analyst at CBO (in two separate stints) and an analyst at the Congressional Research Service. She was also a senior analyst in the Office of the Assistant Secretary for Planning and Evaluation at HHS and a Public Health Service Fellow at the Agency for Healthcare Research and Quality. Holly has an MPP from Berkeley.
Two health units in the Budget Analysis Division report to Holly. One is headed by Tom Bradley, who has served in that role since 1998. Tom was previously a senior analyst at the Prospective Payment Assessment Commission and a Health Policy Fellow at RAND. Tom has an MPH from Boston University and is ABD from the RAND Graduate School.
The other health unit in the division is led by Jean Hearne, who was appointed to that position last year. Jean was previously an analyst at CBO (again, in two separate stints) and spent nearly a decade as a specialist in health financing at CRS. She also worked at the Institute for Health Policy Solutions. Jean has an MPH from California State University in San Diego.
This group of managers and our entire team of health analysts will bring to our work a broad collection of skills and knowledge that will enable us to undertake careful, evidence-based analyses of important health issues. Deputy Director Bob Sunshine and I look forward to working with them to meet the Congress’s need for a large amount of high-quality analysis in the health area.