Budget and policy experts are braced for Washington to soon face the painful task of finding even more savings — and they anticipate that health spending, which makes up more than a fifth of the federal budget, will be a main target.
Some health-care leaders are already laying the groundwork to redirect a debate they’re expecting in 2013, after the 2012 elections. They hope to prevent spending from simply being shifted from one part of the system to another.
Jack Lewin, chief executive of the American College of Cardiology, argues that proposals to address the root causes of high health-care costs have been largely ignored in Washington.
“We talk about them all the time, but there’s nothing that we’re doing in any of these proposals to get that done,” he said. “What we would like to get on the table that’s not there is a paradigm shift in thinking about how you control costs.”
“There’s going to be a round two [of cuts], but after the election, because of the economic pressures exerted by the national debt,” said Thomas Scully, a Medicare administrator under President George W. Bush who is now a senior counsel at Alston & Bird, an Atlanta-based law firm that represents many hospitals, drug manufacturers and other health-care companies.
Congress’ “supercommittee” has examined a variety of ideas to save money in Medicare, the federal program that provides coverage to about 48 million elderly and disabled people and eats 15 percent of the federal budget.
The proposals include cutting payments to medical providers, asking beneficiaries to pay more for their coverage and increasing the eligibility age.
The health-care interests that stand to take another hit in 2013 want to begin planning now. Current efforts are informal and low-key. But several pivotal health-care leaders, most of whom have been through previous national debates and cost-cutting campaigns together, say efforts to reduce spending too often transfer costs off the federal budget and onto individuals, insurers, doctors or hospitals.
These concerns have caused “people from dramatically different quarters to start thinking about what to do to get their hands around this” and redirect the conversation, said Karen Ignagni, president of America’s Health Insurance Plans, the industry trade group. “I’ve been talking to a range of stakeholders about how to work together . . . to urge policymakers to look at what’s already out there now and build on it.”
Some ideas advance existing concepts, such as pushing broad changes in the way that Medicare and Medicaid pay doctors and hospitals, or stepping up efforts to better coordinate care for people who get both Medicare and Medicaid, known as dual eligibles.
America’s Health Insurance Plans is advocating to rapidly expand coordinated care.
Some experts are promoting plans to protect doctors and hospitals from medical malpractice lawsuits as long as they follow best practices and the establishment of specialized health-care courts to hear malpractice cases.
Although there is consensus that changes are needed to the existing liability system, Republicans and Democrats have been unable to agree about what to do. Republicans have long sought caps on court awards for non-economic damages (pain and suffering); Democrats, supported by trial lawyers, have adamantly opposed that.
Others want to crack down on fraud and avoid unnecessary care at the end of life.
The 2010 health-care law is part of this debate. Administration officials and other proponents of the law say it will help drive down costs through a variety of initiatives designed to increase reliance on primary care, place emphasis on preventive medicine, study treatments to evaluate their effectiveness and rate hospitals and other providers on quality.
But experts across the political spectrum argue that the law will not have a strong impact on costs because the reforms it sets in motion are small and will take years to mature.
The law found savings by cutting Medicare payments to hospitals and other medical providers and placing what some insurers argue are damaging restrictions on health insurance plans. Under the law, insurers cannot reject people with preexisting conditions, must justify rate increases of 10 percent or more and must send rebates to consumers if the companies don’t spend at least 80 percent of premiums on medical care.
One of the biggest challenges for those pushing structural changes in the health-care system is trying to estimate the savings such transitions would generate. Currently, the Congressional Budget Office does not count savings from new alternatives unless hard proof exists. Various parts of the health-care industry already are testing new approaches, and Ignagni wants the CBO to use those results so that it can attach savings to proposals. “We are seeing results,” she said.
“I don’t think this should be framed as round two of deficit reduction but as round one of cost containment,” she said. “We haven’t as a country addressed that in terms of sustainability of the health-care system and the ability of employers and consumers to pay for it.”
Ron Pollack, executive director of the consumer group Families USA, said, “It’s up to us to get really serious with the agenda so that, when the time comes after the election, we are prepared to offer serious proposals that deal with costs and that do not impair the quality of care.”
Looking to 2013, early discussion is essential, said John Rother, who recently left the seniors group AARP to head up the National Coalition on Health Care, a broad, nonprofit coalition seeking comprehensive change in the health system. “Unless there’s a positive program to offer, we could be looking at some very negative actions after the next election.”
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization that is not affiliated with Kaiser Permanente.