Panels Recommend Cuts to Health Care Spending to Address National Debt

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Tue Nov 30 20:28:58 PST 2010



November 11, 2010
Panel Recommends Cuts to Health Care Spending To Address National Debt

California Healthline

On Wednesday, the National Commission on Fiscal Responsibility and  
Reform issued a draft report on how to reduce nearly $4 trillion from  
projected deficits over the next decade, including proposals to reduce  
health care spending, The Hill's "Healthwatch" reports.

The 18-member bipartisan panel was established by President Obama in  
February to develop recommendations on how to reduce the national debt  
(Pecquet, "Healthwatch," The Hill, 11/10).

Although the document's proposals are preliminary and have not been  
approved by the panel, they are expected to be similar to the final  
recommendations that Obama has requested by Dec. 1 (Ethridge, CQ  
HealthBeat, 11/10).

The report calls for substantial cuts to health care and other  
domestic and military spending, none of which are slated to take  
effect before 2012, "to avoid undermining the tepid economic  
recovery," according to the New York Times (Calmes, New York Times,  
11/10).

The blueprint sets a long-term goal to restrain the growth rate of  
health care spending after 2020 to no more than the gross domestic  
product plus 1%, with a recommendation to review the cost growth every  
two years (CQ HealthBeat, 11/10).

Details of Health Spending Cuts, Other Recommendations

The draft report suggests "asking doctors and other health providers,  
lawyers and individuals to take responsibility for slowing health care  
cost growth." To do that, the report recommends:
        • Eliminating scheduled cuts to Medicare physician  
reimbursement rates and resolving the issue of the sustainable growth  
rate formula and offsetting the costs "not through deficit spending  
but through savings from payment reforms, cost-sharing and malpractice  
reform, and long-term measures to control health care cost  
growth" ("Healthwatch," The Hill, 11/10);

        • Earlier cuts to Medicare Advantage and charity care payments  
to hospitals outlined in the federal health reform law;

        • Stronger authorizations for the Independent Payment Advisory  
Board, which was created under the health reform law to slow the  
growth in Medicare spending (Pickert, "Swampland," Time, 11/10);

        • Introducing new taxes on health benefits;

        • Potentially reinstating the public option plan to the state- 
based health insurance exchanges to be created under the overhaul in  
2014 (CQ HealthBeat, 11/10);

        • Lowering the cost of defensive medicine by adopting  
comprehensive tort reform ("Healthwatch," The Hill, 11/10); and

        • Increasing cost-sharing among Medicare beneficiaries and  
requiring plans to provide rebates for brand-name drugs (CQ  
HealthBeat, 11/10).
Democrats, Labor Official Criticize Report; White House Calls for  
Restraint

House Speaker Nancy Pelosi (D-Calif.) called the report "simply  
unacceptable," while AFL-CIO President Richard Trumka described the  
proposed program cuts as "unconscionable."

According to the Washington Times, Republicans were "more cautious"  
but said the draft had its strong points. However, they said that many  
of the proposals were unlikely to survive strong lobbying efforts  
(Sands, Washington Times, 11/10).

Obama also addressed the commission's report, noting that "before  
anybody starts shooting down proposals, I think we need to listen, we  
need to gather up all the facts."

Co-Chairs Call Report 'Starting Point'

The panel's co-chairs -- former Clinton White House Chief of Staff  
Erskine Bowles, a Democrat, and former Sen. Alan Simpson (R-Wyo.) --  
acknowledged that the draft report is not likely to draw full support,  
but Bowles described it as a "starting point" for the discussions on  
resolving the national debt (Montgomery, Washington Post, 11/10).





November 17, 2010
Bipartisan panel issues debt reduction recommendations

AHA News Now

The Bipartisan Policy Center today issued a proposal for reducing the  
federal deficit, including recommendations to control health care  
spending. Among other health care proposals, the plan would phase out  
the tax exclusion for employer-sponsored health insurance; raise  
Medicare Part B premiums from 25% to 35% of program costs; revise  
Medicare's benefit package and co-payment structure; bundle Medicare  
payments for post-acute care into the payment for inpatient care;  
require Medicare fee-for-service beneficiaries to pay an additional  
premium if federal spending per enrollee rises more than 1% faster  
than gross domestic product; create a Medicare exchange for enrollees  
who choose a private health plan; remove barriers to managed care  
options for beneficiaries dually eligible for Medicare and Medicaid;  
slow Medicaid cost growth by one percentage point per year; and  
provide federal financial incentives for states to cap medical  
liability damages. The recommendations were developed by a task force  
co-chaired by former Senate Budget Committee Chairman Pete Domenici (R- 
NM) and former White House budget director Alice Rivlin, who served  
during the Clinton administration. In a statement, the AHA said the  
proposal "rightly rejects the inclusion of further payment reductions  
to hospitals," and that liability reform "would greatly add to the  
nation's efforts to control health care spending." The association  
expressed concern about the proposal to make the bundling pilots for  
acute and post-acute services permanent with the requirement of  
producing savings, and serious reservations about an artificial cap on  
the Medicaid program.




Anna Parks &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine


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