Report: U.S. Could Save $2T by Setting National Health Spending Target
The U.S. could generate as much as $2 trillion in health care savings over the next 10 years if the government commits to improving health system performance and limiting health care spending growth to a rate no greater than the long-term growth rate of the economy, according to a report released Thursday by the Commonwealth Fund, Reuters reports (Morgan, Reuters, 1/10).
The report -- developed by the group's Commission on a High Performance Health System -- details 10 policy proposals that the panel said would provide "significant federal fiscal relief," Modern Healthcare reports.
The proposed spending target is modeled after Massachusetts' new cost-control law, which the state enacted last year as the second stage to its 2006 health insurance expansion law -- widely considered to be the blueprint for the Affordable Care Act (Evans, Modern Healthcare, 1/10).
If the policy recommendations are adopted, the federal government would save about $1 trillion on health care costs, state and local governments would save $242 billion, employers would save $189 billion and consumers would save $537 billion (Reuters, 1/10).
According to an analysis of the Commission's report by Actuarial Research Corp., two-thirds of the expected savings -- about $1.3 trillion -- would be generated from four of the 10 policy proposals. Two of those proposals -- medical malpractice reform and an overhaul of the Medicare physician reimbursement scheme -- would reduce spending by $90 billion.
The report also calls for eliminating the 26.5% reduction to Medicare physician reimbursement rates and freezing payment rates at 2013 levels. Financial incentives would be offered to physicians who use innovative payment models, such as accountable care contracts, bundled payments and a medical home model. In addition, the report recommends reducing physician administrative costs and using health information technology to promote public access to health data, such as price, quality and patient satisfaction information on health services.
The Commission also recommends offering rewards for team-based treatment strategies for chronically ill patients; expanding the use of bundled payments in Medicare, Medicaid and plans offered through the ACA's health insurance exchanges; and requiring health plans in the exchanges to adopt alternative payment models (Modern Healthcare, 1/10).
In addition, the report notes that Medicare beneficiaries should receive incentives for choosing providers that offer cost-effective care and should be offered coverage options with increased protection against catastrophic illness (Reuters, 1/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.