Tuesday, April 28, 2009

Orszag on health cost containment

It's an issue that from the outside has appeared to have practically been buried amid other event, but this week's New Yorker gets OMB director Peter Orszag to talk about health insurance reform.

His chief perspective appears to be that the lack of much cross-sectional correlation between health spending and health outcomes in the U.S., as reported by the Dartmouth Atlas of Health Care, is evidence of suboptimal decision making or waste. In other words, if the more bucks you spend doesn't get you more of a bang, it's evidence you shouldn't have spent them. Not an unreasonable assertion to be sure, but also not one that is likely to go over easily with folks unaccustomed to the relatively raw logic of economic thinking.