During the holidays, I read an article entitled, "Doctored Numbers." It was written by John Cogan, the Leonard and Shirley Ely Senior Fellow at the Hoover Institution, Stanford  University; R. Glenn Hubbard, Dean of the Columbia Business School; and David Kessler, Professor of Management at Stanford Graduate School of Business.  All three of the authors are members of the Hoover Institution Working Group on Health Policy.

The purpose of the article was to examine a key justification articulated by advocates of ObamaCare, i.e., that people with private insurance pay for care for the uninsured through “cost shifting,” or higher prices charged by doctors and hospitals to recover losses from uncompensated care. President Obama and Democratic leaders in Congress decided that the way to reduce cost shifting was to require everyone to buy health insurance. If more people buy insurance, health care premiums would be dramatically reduced because there would be more people to share in the additional costs caused by the perceived cost shift.

There was one major flaw in the premise of President Obama and his supporters—they relied on a non-peer reviewed study commissioned by Families USA, a Washington D.C. advocacy group that supported passage of ObamaCare and continue to aggressively support its implementation. That study concluded doctors and hospitals were charging private insurers an additional $43 billion per year to recover losses incurred by caring for the uninsured. Furthermore, the study found that these higher charges raised annual private insurance premiums for families and individuals by $1017 and $368 respectively.

The problem is this conclusion simply doesn’t add up when compared to other scholarly examinations of the cost shifting phenomenon. For instance, the article points to a Health Affairs piece that found uncompensated care could raise premiums by no more than 1.7 percent. The Congressional Budget Office (CBO) concluded in a 2008 report that “overall, the impact of cost shifting on payment rates and premiums for private insurance seems likely to be rela­tively small.” Politifact.com rated a statement using the Families USA statistic as mostly false because of “…significant questions about the Families USA study…” Why the stark contrast in findings? The authors of “Doctored Numbers” note charitable organizations and federal, state, and local governments provide doctors and hospitals $40 to $50 billion a year to reimburse them to provide health care for the uninsured. These payments, which amount to approximately three-fourths of the cost of such care, mitigate the extent of cost shifting. So the evidence suggests there is an absence of factual support for a key premise of ObamaCare, .i.e., that people with private insurance pay for care for the uninsured through cost shifting.

What’s more, many experts believe Obamacare will actually increase cost shifting, not reduce it. According to the CBO, about half of the people who are expected to become newly insured under ObamaCare will be enrolled in Medicaid – roughly 17 million people. But it’s well known that Medicaid payments to doctors and hospitals are oftentimes well below the cost of doing business, resulting in a cost shift of their own. The cost of health care for these new Medicaid recipients will not be paid for by private insurance companies, but by taxpayers! According to the CBO, once the law is fully operational, the volume of new health spending borne by taxpayers will be approximately $200 billion and the estimated total cost of the program from 2012 to 2021 is $1.1 trillion! Remember also, this is the most optimistic forecast because the sponsors of ObamaCare front loaded revenue and back loaded expenses to make the program appear to be less expensive in its early years.  CBO also estimated the program would increase the nation's debt by $1.36 trillion in its first seven years.

Perhaps everyone can now understand why the Republicans were so upset with Speaker Pelosi in the last Congress because she would not allow anyone to offer even one amendment to the legislation that created ObamaCare. As she said at the time, "we have to pass the bill, so that you can find out what is in it!”