Former Obama Budget Head Challenges Paul Ryan To Demonstrate How His Budget Would Lower Health Costs

Rep. Paul Ryan’s (R-WI) proposals to control health care spending by slashing the federal government’s contribution to Medicare and Medicaid and shifting that spending on to future retirees or the states, has dominated Washington’s conversation about entitlement reform.

But on Thursday morning, a group of health care economists and former Obama administration officials laid out an alternative approach that could achieve health savings by encouraging providers to deliver care more efficiently.

“Mr. Ryan has had too much running room to go out with proposals that neither will reduce overall health care costs nor will help individual beneficiaries simply because there has not been enough of an alternative put forward by those who believe that we really need to focus on the incentives and information for providers,” Peter Orszag, former director of the Office of Management and Budget under President Obama, told ThinkProgress in an interview at the Center for American Progress.

Republicans have offered a plan that would “shift risk on to consumers” rather than examining whether doctors are prescribing the most effective and efficient treatments. “I would challenge Mr. Ryan and others who support a premium support approach to show an analysis done by an objective entity, like the Congressional Budget Office, in which that type of approach reduced overall health care costs.”

The alternative — which Orszag described as a “centrist proposal” that would “keep the basic structure of the current system” while dramatically improving it — would among other changes, promote privately negotiated payment rates between insurers and providers, increase transparency in prices, and reduce the risk of malpractice claims for physicians. Read the full plan here.

The proposals compliment the delivery system reforms and administrative simplifications included in the Affordable Care Act and have attracted bipartisan support in the past. These changes seek to reimburse providers for delivering care more efficiently rather than paying a separate fee for individual services. They “are all very doable,” Orszag said, adding, “If I had to pick out two or three things to do immediately, I would pick the accelerated towards bundled payments and non fee-for-service payment. We already have the structure in place, the challenge is to kind of ramp it up and accelerate it,” he said. “The second thing, which might be a little more controversial, both substantively and politically is to put forward a more agressive medical malpractice reform.”

“When I go out and talk to heath care groups, if you start out with the fact that you acknowledge that whatever the academic literature says, that it would be beneficial if we could provide more clarity to doctors, the conversation changes. And I think it would be beneficial for supporters of the Affordable Care Act to change the conversation in that way,” Orszag claimed.