Does Consulting Contract Explain Gruber’s False Claims About Senate Health Bill?

MIT economist Jonathan Gruber has, for a long time, been the go-to guy for people who want to defend the Senate bill. (Today Sen. John Kerry has an article on the Huffington Post defending the excise tax in which he quotes only one economist, Jonathan Gruber.) Gruber does not just support the Senate bill, he defends the bill by making completely ridiculous, over-the-top claims about the bill, which border dangerously close to outright lies. For months, I have wondered why Gruber was committing what I considered economic malpractice with his untruthful statements. I previously thought that he was just a guy who enjoyed the spotlight and was prone to exaggeration. Having recently found out that he received close to $400,000 from single source contracts with the Department of Health and Human Services to study the effect of the “President's health care proposal,” I'm no longer as curious about his behavior.

For an example of Gruber's nonsense, look at his statement in Ron Brownstein's much published article on cost control, which Rahm Emanuel was telling everyone to read:

"I'm sort of a known skeptic on this stuff," Gruber told me. "My summary is it's really hard to figure out how to bend the cost curve, but I can't think of a thing to try that they didn't try. They really make the best effort anyone has ever made. Everything is in here....I can't think of anything I'd do that they are not doing in the bill. You couldn't have done better than they are doing."

Like many over-the-top claims Gruber has made in interviews, this one is simply not true. There is single payer, drug re-importation, direct Medicare pharmaceutical price negotiation, a robust public option, a centralized reimbursement negotiator, single standardized insurance packages, turning all insurance companies into non-profits, eliminating direct-to-consumer drug advertising, creating a faster pathways for biosimilars—it is a long list of options. To put it simply, there are a lot of common proposals that could have saved the nation hundreds of billions on our health care costs that are not in the Senate bill.

The Senate bill does not contain every cost control idea out there, it does not even contain most of the cost control ideas that were part of Obama's health care proposal during the campaign. Any health economist should know that. In fact, when the administration cut its secret deal with PhRMA that promised reform would not cost the drug industry more than $80 billion, Obama jettisoned a proven cost control idea that he advocated during his presidential campaign: drug re-importation.

In the many articles which quote Jonathan Gruber, I have never seen it disclosed that he was a paid consultant to the Obama Administration. For months I have been angry with Gruber because I thought he was simply an exaggerator whose dangerous love of the spotlight was hurting the efforts of progressives to make sure the Senate bill adopted more progressive cost control solutions. I could not understand how any health care expert could issue such blatant falsehoods about health care reform. Now it is clear something much more sinister was at play.