That is the topic of a JAMA Health Forum article by my USC colleagues Dana Goldman and Erin Trish. In it, the note that the Congressional Budget Office (CBO) does good work, but the scope of their analysis is limited. CBO only estimates the impact on policies on government budgets; CBO’s remit does not evaluate whether a policy is socially optimal. Thus, the authors have two primary critiques:
CBO time frame is too short. CBO has a 10-year window but this is often too short for health issues. The benefits of childhood vaccines last decades. Evaluation of new drug cost ignore future genericization. Drug development takes 10-15 years from discovery to approval…and that does not count the cost and benefits of patients actually receiving the treatment. CBO scope is too narrow. CBO only focuses on cost to the government. Costs to other stakeholders are not consider. For instance, policies that improve health may be people back to work and increase their income. New surgeries may improve quality of life. However, none of these outcomes are considered as they do not directly impact the federal budget.
What Goldman and Trish propose as a solution is not to overhaul CBO, but to complement CBO’s fiscal evaluation with broader social welfare analyses from academic institutions.
Academic institutions with relevant expertise in nonpartisan policy research are a promising option. They can provide a framework that makes explicit what society gains from policy changes, at what price, and with what certainty. Such analysis complements official budget estimates by illuminating dimensions that matter enormously for patients and taxpayers but fall outside federal budget scoring by design…
Two dimensions would distinguish this complementary work from traditional budget scoring. First, a broader set of outcomes must be included: health metrics such as longevity, disability, and quality of life; economic consequences for employer costs, labor force participation, insurance premiums, and program enrollment; and biomedical innovations such as research and development investments and technology adoptions. Second, the models must be transparent to build confidence and credibility: clear documentation of analytic methods, explicit explanations of key assumptions, and rigorous sensitivity analyses showing how conclusions change under alternative scenarios.
This approach is sensible in that it complements CBO rather than overhauls it. You can read the full argument from Goldman and Trish here.
