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The New Bipartisan Super Committee And The Future Of Health Care Spending

By Igor Volsky on August 2, 2011 at 1:44 pm

"The New Bipartisan Super Committee And The Future Of Health Care Spending"

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Janet Adamy has an article in the Wall Street Journal arguing that the health care cuts in the debt ceiling deal — either from the bipartisan committee or the triggers that kick in should that committee fail to agree on a package of reductions — has the health industry and some seniors worried about the future of Medicare and Medicaid:

To hit the $1.5 trillion in spending cuts, the congressional committee is likely to reconsider major changes to Medicare that the White House and congressional leaders put on the table during this summer’s debt-ceiling negotiations. President Barack Obama in earlier negotiations floated the idea of raising the Medicare-eligibility age to 67 from 65 in an effort to win Republican concessions. He also said he was open to a means test.

“All those type of issues will certainly be looked at by the committee,” said Tom Nickels, a senior vice president at the American Hospital Association.

Should the committee’s recommendations not make it into law, the backup spending-cut mechanism would include cuts to Medicare. The agreement says these cuts would affect health-care providers, not beneficiaries, and would be capped at 2%.

Some health-care-provider groups contend they couldn’t absorb such payment cuts without affecting patients. The hospital industry says the cuts could overload emergency rooms, shut down trauma units and reduce patient access to the latest treatments.

The committee’s recommendations — and Suzy Khimm previews what those may be — will be fairly troubling as far as beneficiaries are concerned. President Obama has previously tentatively agreed to raise the Medicare eligibility age and so (with that door open) one could imagine the proliferation of other similar ideas that would take more people out of the program.

But the committee could also offer proposals to hasten the kind of delivery and payment reforms that are already part of the Affordable Care Act. These changes would not be so much about slashing reimbursement rates as they would be about paying providers differently to encourage them to provide more efficient care. It’s a tricky thing to figure out — particularly since nobody is quite sure how to reform and modernize the health care reimbursement system — but one policy makers should at least consider if they’re truly interested in lowering health care costs over the long haul. What’s a good place to start? All-payer rate setting.

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