Our guest blogger is Topher Spiro, the Managing Director for Health Policy at the Center for American Progress.
News reports out today suggest that Democrats on the Super Committee are proposing $400 billion in cuts to Medicare—$200 billion in cuts to benefits, and $200 billion in cuts to providers. It’s unclear what this means, and whether it’s true, but one thing is certain: there is a better way.
Today the Center for American Progress is releasing a package of reforms to modernize the payment and delivery system. These reforms are a win-win: they will reduce costs and at the same time improve the quality of care and the efficiency of the health care system. Here’s what we propose:
– Immediately expand a Medicare program that bundles payments together for certain procedures nationwide. Then, completely replace fee-for-service with bundled payments for all procedures and primary care by 2016.
– Immediately implement competitive bidding for durable medical equipment, prosthetics, orthotics, and supplies nationwide, and expand the program to include laboratory tests.
– Require electronic eligibility, claims processing, and payment, as well as centralized physician credentialing.
– Do not pay extra for technologies that are more expensive but no more effective than other available technologies.
More detail on these reforms is available here. Together, they have the potential to reduce the federal deficit by $100 billion or more in a decade, as scored by CBO. Many experts believe that the actual savings to the federal government would be orders of magnitude greater. And of course, the total savings to the health care system would be even greater.
Such reforms are vastly superior to misguided policies that do not actually reduce health care costs, but merely shift them. Unnecessary cuts to benefits and indiscriminate, across-the-board cuts to providers—as the Super Committee is reportedly considering—are blunt methods of reducing the federal deficit. Instead, the Super Committee should seize the opportunity to modernize the health care system—and reduce total health care costs while improving the quality of care.