Is Medicare A Debt-Reduction Target?
Monday, September 27, 2010
Earlier this year, President Obama commissioned an 18-person panel -- made up of 10 Democrats and eight Republicans -- and charged it with finding ways to tamp down the nation's ever-rising debt. It is, no doubt, a task that is as worthy as it is difficult. Over the summer, the federal budget deficit reached $1.6 trillion while the national debt hit an astronomical $14.3 trillion. Fourteen of the 18 members have to agree on the recommendations before they are sent to the president and Congress on Dec. 1.
Do you think that the panel members will go into the Medicare program to help find ways to reduce debt and deficit?
October 4, 2010 4:36 PM
Great Potential
By John C. Goodman
President and CEO, National Center for Policy Analysis, and Kellye Wright Fellow
I agree with Ken Thorpe. The cost-saving potential in Medicare is great. But not if we adopt a command-and-control approach manipulated from Washington. We need two reforms:
1. For the short-run, providers should be free to repackage and re-price their services and Medicare should accept any offer so long as the cost to the taxpayer goes down and quality of care goes up. Done correctly, we could have a competitive environment in short order – with providers vying with each other to find ways of reducing taxpayer costs.
2. For the long-run, we must convert Medicare from chain letter finance to a funded system in which each generation pays its own way. This will require each generation to save 4% of payroll to prefund its post-retirement healthcare.
An explanation of both proposals along with simulated results may be found here.
October 4, 2010 12:02 PM
Cost Savings in Medicare
By Kenneth E. Thorpe
Robert W. Woodruff Professor and Chair, Department of Health Policy and Management, Rollins School of Public Health Emory University
The cost-saving potential in Medicare is great. While we’ve already begun to realize some of the cost-savings in Medicare via the implementation of several PPACA provisions—The Obama Administration released a report in August of this year showing a savings of $8 billion by the end of next year, and as much as $575 billion over the rest of the decade—we have only scratched the surface of cost savings in Medicare. There are three additional areas with significant cost-saving potential that would help to improve health outcomes and reduce federal spending:
1. Reduce Preventable Hospital Readmissions. Preventable hospital readmissions within a 30 day window total $250 billion in added Medicare spending over the next 10 years. That cost could be halved by implementing community health teams, transitional care programs like those developed at the University of Pennsylvania and Colorado as well as other care coordination practices.
2. Implement Care Coordination in Medicare. Increased care coordination in Medicare has the pote...
The cost-saving potential in Medicare is great. While we’ve already begun to realize some of the cost-savings in Medicare via the implementation of several PPACA provisions—The Obama Administration released a report in August of this year showing a savings of $8 billion by the end of next year, and as much as $575 billion over the rest of the decade—we have only scratched the surface of cost savings in Medicare. There are three additional areas with significant cost-saving potential that would help to improve health outcomes and reduce federal spending:
1. Reduce Preventable Hospital Readmissions. Preventable hospital readmissions within a 30 day window total $250 billion in added Medicare spending over the next 10 years. That cost could be halved by implementing community health teams, transitional care programs like those developed at the University of Pennsylvania and Colorado as well as other care coordination practices.
2. Implement Care Coordination in Medicare. Increased care coordination in Medicare has the potential to significantly reduce health spending. Using transitional care models, such as Community Health Teams, have the potential to save $125 billion over 10 years in Medicare alone.
3. Reduce Rising Rates of Chronic Disease and Obesity. Federal spending in 2008 in Medicare and Medicaid on patients with one or more chronic condition was $568.4 billion. Research has also shown that lifetime spending for older adults is $25,000- $37,000 lower among normal weight adults, compared to obese adults. Within Medicare alone, just three obesity-associated chronic conditions—diabetes, hypertension, and high cholesterol—accounted for more than 16 percent of the rise in spending between 1987 and 2006. Enrolling just one cohort of 60-64 year olds into proven diet, exercise and nutrition programs would save the federal government nearly $40 Billion over a 10-15 year period.
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