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Much has been lamented about regarding the health care bill now set for debate in the Senate over the next month. The Public Option is obviously a large sticking point, but even more important are the cost-cutting aspects of this bill. Are they real? The Republicans seem to have magically fabricated a cost of $2.5 trillion over the next 10-15 years (pulling that number out of thin air), and yet we keep hearing that the bill will actually cut the deficit. Can this be possible? Ron Brownstein at The Atlantic has the skinny on the true cost-cutting elements of this bill, and they look to be real and robust [note: Obama's White House was all over this blog post this week]:

When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won't succeed unless it "bends the curve" in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.

Gruber -- along with Mark McClellan, the former director of the Center for Medicare and Medicaid Services under George W. Bush -- go on to detail the cost-cutting efficiencies of this bill (in addition to the areas that need improving):

In their November 17 letter to Obama, the group of economists led by Dr. Alan Garber of Stanford University, identified four pillars of fiscally-responsible health care reform. They maintained that the bill needed to include a tax on high-end "Cadillac" insurance plans; to pursue "aggressive" tests of payment reforms that will "provide incentives for physicians and hospitals to focus on quality" and provide "care that is better coordinated"; and establish an independent Medicare commission that can continuously develop and implement "new efforts to improve quality and contain costs." Finally, they said the Congressional Budget Office "must project the bill to be at least deficit neutral over the 10-year budget window and deficit reducing thereafter."

As OMB Director Peter Orszag noted in an interview, the Reid bill met all those tests. The CBO projected that the bill would reduce the federal deficit by $130 billion over its first decade and by as much as $650 billion in its second. (Conservatives, of course, consider those projections unrealistic, but CBO is the only umpire in the game, and Republicans have been happy to trumpet its analyses critical of the Democratic plans.)

Orzag remarks:

"Let's use the metric of that letter," said Orszag, who helped shape the health reform debate for years from his earlier posts at CBO and the Brookings Institution. "Deficit neutral; got that. Deficit-reducing second decade, got that. Excise tax: That was retained. Third is the Medicare commission: has that. Fourth is delivery system reforms, bundling payments, hospital acquired infections, readmission rates. It has that. If you go down the checklist of what they said was necessary for a fiscally responsible bill that will move us towards the health care system of the future, this passes the bar."

So, it would appear that there are real cost-cutting measures in this bill that would be a good first step in reforming our badly-broken system. And yet, it seems as if all Americans will be forced to buy crappy insurance policies from the greedy insurance industry for the foreseeable future. Without a proper Public Option to compete with the private insurance industry, can we truly achieve the cost-cutting needed to get this beast under control, where health care premiums are skyrocketing at annual rate of 20%?

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