COST: Can Health Reform Heal the Federal Budget
Can health reform heal our federal budget? Yes, but whatever passes now is just the beginning, and there will always be room for improvement.
That's our takeaway from an excellent event we tweeted this morning hosted by the US Budget Watch, a joint project between the Committee for a Responsible Federal Budget and The Pew Charitable Trusts.
There was a lot of ground covered by a panel of experts moderated by the Washington Post's Ceci Connolly and featuring New America's director of health policy Len Nichols. They tackled everything from raising Medicaid eligibility rates to fixing the Sustainable Growth Rate formula in a fiscally responsible way. But for now, we'll just give you the highlights of the discussion.
What impressed us the most was how little question there was about whether health reform will be paid for. Sure, James Capretta of the Ethics and Public Policy Center questioned the accounting of the bills and Donald Marron from the Georgetown School of Public Policy wondered if we're using some pay-fors for health reform that should be used elsewhere. For example, the savings from Medicare Advantage could be used to permanently fix the SGR. But all of the panelists agreed that if passed, health reform one way or another will be paid for and that, as Paul Van de Water of the Center for Budget Policies and Priorities says, is a big accomplishment.
The real discussion focused on whether health reform will actually bend the cost curve. Van de Water was quick to list many provisions such as the excise tax, accountable care organizations, medical homes, and bundled payments that have the potential to revolutionize care. Still, Marron and Capretta were skeptical of the real impact of these provisions -- whether cuts would be made and savings realized. During the Q&A, one questioner asked a similar question about how scalable these reforms were and whether best practices could really be universalized using Medicare as a leader. Len replied that past changes in Medicare such as prospective payment and DRGs had dramatic effects -- for example, reducing inpatient stays by two days without lowering the quality of care. The challenge, of course, was taking these principles (which are sort of a form of bundled payments within hospitals) and applying them across the system to promote better and more coordinated care.
Finally, on the question of predictions, AARP's John Rother believes that there will be a signing ceremony in the Rose Garden -- he just doesn't know when and what they'll be signing. He noted that in talking about a federal budget, it is important not to lose sight of costs in the context of households and the system as a whole. The key, Len said, is that the legislation must make a credible commitment to changing business as usual and moving us toward a system that rewards high-value care. He noted that when President Obama pledged to be the last president to take on health care, what he really meant was that he would be the last to discuss "whether." There will still be plenty left to do after reform passes, which Ceci Connolly noted, enhances the prospects for full employment for wonks like us.