Following Doctor’s Orders
If you look at the policy options CBO assessed as having the biggest potential for reducing long-term health care cost-growth, you will see that a vast majority of these proposals are, in some form, part of the historic health care reform legislation the President signed into law last week, including:
- Create Accountable Care Organizations – The legislation includes a Medicare Shared Savings Program that will encourage physicians and hospitals to work together to increase accountability for patients and better coordinate their care both improving the quality of medical care while lowering costs.
- Bundle Payments to Hospitals and Other Providers – The legislation creates a National Pilot Program on Payment Bundling that will test methods to better integrate hospital, post-acute care, and other services so that Medicare beneficiaries receive better coordinated, higher quality, and more efficient care.
- Provide Additional Information About Treatments’ Effectiveness – The legislation creates a private, non-profit organization for Patient Centered Health Research to examine the comparative clinical effectiveness, risks, and benefits of different treatments and services.
- Modify the Tax Treatment of Employment-Based Health Insurance – Starting in 2018, the legislation implements an excise tax on insurance companies offering high-cost health insurance plans. This provision will create a strong incentive for more efficient plans that will help reduce the growth of premiums over time.
- Reduce Annual Updates in Medicare’s Payments to Reflect Expected Productivity Gains – The legislation will adjust annual payment updates to better align payments with costs and encourage providers to achieve greater efficiencies which can result in savings to Medicare and its beneficiaries.
- Combine Increased Discretion to Change Medicare with a Fallback if Savings Were Not Obtained – The legislation creates an Independent Payment Advisory Board that, beginning in 2014, will annually recommend proposals to Congress and the President that will slow the growth in Medicare spending and improve the quality of services for Medicare beneficiaries.
To be sure, just including these proposals in the legislation is no guarantee of success. There is much work to be done to implement these ideas and adjust them over time (a task made easier by the presence of the IPAB). Yet, it’s worth noting that we have given ourselves a quite auspicious start. Now, it’s up to us all to work together toward their success.
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