Health reform numbers game

Feds differ with White House

When a government report found that President Obama’s health overhaul would modestly raise the nation’s total health care tab, the White House responded with a statistic suggesting costs would go down.

It turns out that may be fuzzy math.

Health reform director Nancy-Ann DeParle wrote on the White House blog last week that the same government report indicates spending per insured person will be more than $1,000 lower in 2019 because of the law - some 9 percent below previous projections.

“The act will make health care more affordable for Americans,” Miss DeParle said.

But the head of the nonpartisan economic unit at Medicare that produced the original cost report says the White House number “does not provide a meaningful or accurate indication” of the effect of the health care law.

“The amounts quoted in the White House blog are not meaningful and cannot be used to calculate the change in health expenditures per insured person,” said Richard Foster, Medicare’s chief actuary,

The Obama administration stands by its statistic.

It’s a dispute about numbers and how they are bandied about by powerful people in Washington.

But you don’t need an economics degree to follow this one. All you have to do is remember your fractions.

The health care law expands coverage, reducing the number of uninsured by more than 32 million, although about 24 million will remain without coverage.

Still, the share of the population with insurance will go up by nearly 10 percentage points, to about 93 percent. And that makes a difference in the numbers.

If you divide total national health care spending by a bigger number of insured people, you get a smaller per-person result.

It’s an interesting statistic, but it doesn’t mean the problem of rising costs is solved.

“It’s not that it’s false, it’s just that it will be a little misleading,” John Allen Paulos, a mathematics professor at Temple University in Philadelphia, said of the White House number, calling it an “apples-to-oranges miscomparison.”

Consider an imaginary country with just three citizens, Peter, Paul and Mary. Peter has health coverage but Paul and Mary are uninsured. Peter spends $1,000 on health care, but Paul and Mary can only afford $500 apiece because they lack coverage. Total national spending: $2,000. National spending per insured person: $2,000.

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