Saving Money and Saving Lives

Today’s Managing Health Care Costs Indicator is
$86 Billion

A brief article in yesterday's New York Times notes that California, by having among the highest tobacco taxes around, and by spending significantly on tobacco education and counter-marketing, has the lowest adult smoking rate of any state except Utah, and has seen rats of lung cancer decrease at a rate three times as fast as the rest of the country. All told, the state calculates that it has saved $86 billion in health care costs.  (I can't find the actual report, so I would discount this somewhat). There's more detail at this blog, and here's a link to a press release from September.

The Commonwealth Fund and the Congressional Budget Office recently released competing estimates of the impact of various interventions on the federal deficit. The Commonwealth Fund's report is also explicit about the impact of these initiatives on overall health care costs - which is not the focus of the CBO report. I've pulled out five initiatives
1) Medical Home
2) Accelerate Health Care IT Adoption
3) Estabish a Center for Comparative Effectiveness
4) Increase tobacco tax
5) Place tax on sweetened beverages
The CBO suggests each of these will cause modest increases in the federal deficit, while the Commonwealth Fund analysis (performed by the Lewin Group) sees pretty substantial deficit reduction. The Commonwealth Fund's analysis is more in line with the budget proposed by the Obama administration.

I'm skeptical of the CBO's contention that raising taxes on sweetened beverages and tobacco will actually RAISE the federal deficit slightly. But it's important to note that the CBO's calculation of impact of the Clinton Health Plan on the federal deficit played a role in that plan's defeat. (See "The System" by Broder)

Keep your eyes on the Congressional Budget Office!