In the last 30 years, the CBO’s estimates for savings from changes to Medicare have been low balled. This isn’t due to any bias on their part but instead, on the forecasting method.
When forecasting potential savings, they use historical examples of similar initiatives. When there is no previous experience, most of the time the savings are estimated at zero, which obviously changes the math.
Health care savings estimates from CBO are often low
Interesting food for thought:
In the last 30 years, the CBO’s estimates for savings from changes to Medicare have been low balled. This isn’t due to any bias on their part but instead, on the forecasting method.
When forecasting potential savings, they use historical examples of similar initiatives. When there is no previous experience, most of the time the savings are estimated at zero, which obviously changes the math.
Supporting data at the full op-ed: Op-Ed Contributor – Congress’s Health Care Numbers Don’t Add Up – NYTimes.com.