"The Point Of The Proposal, However, Was Never To Generate Savings Over The Next Decade."

That is perhaps the most important line amongst others in OMB Director Peter Orszag's letter about the new CBO study on the IMAC proposal. Of course he had to respond to the study in the first place because GOPolitico ran a story with the screaming headline "CBO deals new blow to health plan". But if the point was never to reach long term savings with the IMAC proposal then in reality its not a big blow at all. The point was cost containment, not savings.

But then you have Jake Tapper doing a story this morning and although he links to Orszag's and quotes from it, he omits the most important sentence in the letter in his analysis and he makes it out to be a food fight pitting Orszag against OMB director Doug Elmendorf. I asked Tapper about this omission on twitter and his response was.

i have only heard WH discuss IMAC in terms of cost containment

Now that, to me, sounds like Tapper is calling Peter Orszag a liar. To be honest with you I don't have a problem with it if that's what he is doing. However it would seem to me that he should have had the courage to say that in the post itself rather than ignore Orszag's statement in his analysis. Don't get me wrong, he did link to the letter so people were free to go and read the letter themselves. However we all know that its rare for people to go to the source material. They rely on the journalist to provide them with the truth. And it would seem in this situation that because Tapper was predisposed to believe that Orszag wasn't being truthful he omitted pretty much the most important sentence in that letter from his analysis.

Here is what I feel are the most important parts of the letter.

CBO noted that this type of approach could lead to significant long-term savings in federal spending on health care and that the available evidence implies that a substantial share of spending on health care contributes little, if anything, to the overall health of the nation. This supports what President Obama has said all along: we can reduce waste and unnecessary spending without reducing quality of care and benefits.

In part because legislation under consideration already includes substantial savings in Medicare over the next decade, CBO found modest additional medium-term savings from this proposal -- $2 billion over 10 years. The point of the proposal, however, was never to generate savings over the next decade. (Indeed, under the Administration’s approach, the IMAC system would not even begin to make recommendations until 2015.) Instead, the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term. In other words, in the terminology of our belt-and-suspenders approach to a fiscally responsible health reform, the IMAC is a game changer not a scoreable offset.

With regard to the long-term impact, CBO suggested that the proposal, with several specific tweaks that would strengthen its operations, could generate significant savings. (The potential modifications included items such as providing mandatory funding for the council, rather than having the council rely on the annual appropriations cycle, and requiring independent verification of the expected reductions in program spending rather than relying only on the Medicare actuaries for such verification, along with other suggestions, such as including an across-the-board reduction in payments as a fallback mechanism if the council did not produce proposals that generated adequate savings.) And if you look back at recent history, one can see why an empowered advisory council would be useful. For example, for the better part of this decade, MedPAC has recommended reducing overpayments to insurance companies for Medicare Advantage plans – to equate those payments with the cost of covering the same beneficiary under traditional Medicare. Yet, nothing happened, costing taxpayers tens of billions of dollars. We can’t afford that type of inertia.

Basically what it boils down to is Orszag is saying "move along folks, nothing to see here" in response to the CBO study. Now the truth is for all I know Orzag is full of it and the CBO analysis really IS a huge blow to health care reform. But it would be nice if a journalist who was skeptical of Orszag statement was either earnest enough or brave enough to put that in their post on the subject rather than avoiding it all together.

Im just sayin.