On health plans, the numbers fly

By Kevin Sack

updated 1:10 a.m. ET Oct. 22, 2008

Economics, it is said, is the dismal science. Anyone paying close attention to the campaign debate over the economics of health care might wonder about the science part.

As Senators Barack Obama and John McCain battle over how best to control spending and cover the uninsured, they are both filling their speeches, advertisements and debating points with authoritative-sounding statistics about the money they would save and the millions of Americans they would cover.

But the figures they cite are invariably the roughest of estimates, often derived by health economists with ideological leanings or financial conflicts. Over time, these forecasts have become so disparate and contradictory as to be almost meaningless.

How many of the country’s 45 million uninsured would gain coverage under Mr. McCain’s plan to reconfigure the tax treatment of health benefits?

Consultants paid by Mr. McCain concluded that his plan would cover 27.5 million of the uninsured. But four health economists who looked into the McCain plan at the urging of David Cutler, a health care adviser to Mr. Obama, reached a far different conclusion. They estimated in a peer-reviewed article in the journal Health Affairs that the number of uninsured would grow by 5 million after five years.

How much would it cost for Mr. Obama to offer subsidized health insurance to those with low incomes?

Last week, the Lewin Group, a consulting firm, projected the cost to taxpayers at $1.17 trillion over 10 years. That was about 27 percent lower than the $1.6 trillion estimated by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution . And it bore little similarity to a $6 trillion estimate — using a broader measurement — put forth by HSI Network, a Minnesota consulting group that was paid $50,000 by the McCain campaign to assess both plans.

The campaigns acknowledge that the numbers are “all over the map,” in the words of Jay Khosla, a McCain adviser. But that does not keep them from selectively highlighting the most favorable ones (as when Mr. Obama says his plan will cut insurance premiums by $2,500 per family, or when Mr. McCain says his tax changes will leave 95 percent of Americans with more money).

Even the economists behind the forecasts say it makes them uncomfortable to hear candidates assert their numbers as indisputable fact, as if stating Derek Jeter ’s batting average. What they are modeling, they emphasize, is ultimately unknowable. And the transformational nature of both candidates’ health care plans means that they can only guess at the future behavior of consumers, employers and insurers.

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“Every candidate should say that these numbers were produced by my experts and they’re my best estimates but they’re not exact,” said Roger D. Feldman, a health economist at the University of Minnesota who directed the HSI studies. “But the campaign trail is not the time for ‘on the one hand, on the other hand.’ It’s a system where you paint things in black and white.”

Dr. Feldman and other economists said politics and relationships did not sway their science. But they said estimates could vary widely because of the assumptions they must factor into their formulas. Often they are flying blind because the campaigns, aware that details make the fiercest enemies, do not provide critical variables. Mr. Obama, for instance, has steadfastly declined to say how he would penalize employers who do not offer health coverage, an important component of his plan.

The economists are often left to use small-scale studies to predict how the candidates’ policies might affect the cost of coverage or the willingness of employers to provide it.

“The uncertainty surrounding what will happen under these policies is huge,” said John F. Sheils, senior vice president of the Lewin Group.

Sherry A. Glied, a Columbia economist and a co-author of the Health Affairs article about the McCain plan, said, “We are estimating what would happen in a world we’ve never seen.”

The more radical the restructuring, the economists said, the more they must assume. And the more they must assume, the greater the chance that ideology may drive methodology.

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