Health Reform Hub Issues

Issues :: Health Costs

How We Would Cut America's Debt
The Washington Post, 05/20/11

With U.S. debt projected to grow more than 275 percent by 2035, the nonpartisan Peter G. Peterson Foundation asked six think tanks to find ways to address the nation’s long-term budget challenges. Below are details from plans that will be unveiled at a fiscal summit the foundation is hosting Wednesday in Washington.   Read more...

Clarifying the Research on Medical Bankruptcy
Aparna Mathur and Thomas P. Miller

American Enterprise Institute, 04/27/11


At the March 10 hearing of the House Education and the Workforce subcommittee on Health, Employment, Labor, and Pensions regarding the overall topic of "Employer Health Costs," Rep. Dale Kildee (D-MI) asked me a question following my oral testimony.  It related partly to cost sharing by employees in employer-sponsored health insurance plans and also to a recent study claiming that 60 percent of bankruptcies were caused by medical bills, and that seventy-five percent of these bankruptcies were filed by workers who actually had health insurance. I referenced some of the related research on that topic by my AEI colleague, Resident Scholar Aparna Mathur, which challenges the methodologies and findings in that study and other related ones.  Read more...

Obama Panel to Curb Medicare Finds Foes in Both Parties
Robert Pear

The New York Times, 4/19/11


emocrats and Republicans are joining to oppose one of the most important features of President Obama’s new deficit reduction plan, a powerful independent board that could make sweeping cuts in the growth of Medicare spending. Mr. Obama wants to expand the power of the 15-member panel, which was created by the new health care law, to rein in Medicare costs. But not only do Republicans and some Democrats oppose increasing the power of the board, they also want to eliminate it altogether. Opponents fear that the panel, known as the Independent Payment Advisory Board, would usurp Congressional spending power over one of the government’s most important and expensive social programs. Read more...

Premium Support Can Save Medicare, But Only If Congress Can Just Say No
Joseph Antos

The American Square, 4/19/11


Barack Obama and Paul Ryan agree that Medicare spending is rising too quickly to be sustainable, but their proposals to rein in Medicare are at opposite ends of the policy spectrum. The president argues for toughening government price-setting arrangements through the yet-to-be formed Independent Payment Advisory Board (IPAB). The congressman espouses premium support, which gives seniors a capped subsidy that they can use to purchase a Medicare-approved health plan. One is a top-down approach, relying on the regulatory power and financial leverage of the federal government. The other is a bottom-up approach, relying on health plans to tailor their offerings and trim their costs to attract market share. Read more...

Obamacare Rules Belie Compassion, Care
Donald P. Condit

The Detroit News, 4/19/11


Remember Mary Poppins singing, "A spoonful of sugar helps the medicine go down in the most delightful way?" If so, be concerned, because you or your parents are probably on Medicare and the Department of Health and Human Services recently proposed regulations for Accountable Care Organizations (ACOs) that will affect them. The sugar-coated rhetoric from HHS cannot disguise the bad medicine in this part of the Affordable Care Act, which intends to bureaucratically cut as much as $960 million in Medicare spending over three years. This Obamacare prescription threatens patients, the physicians who care for them, and the common good. The only clear winners are the consultants and lawyers busy trying to decipher this 429-page tome. Read more...

ACO Fairy Tale Faces a Rumpelstiltskin Moment 
Michael L. Millenson

Kaiser Health News, 4/19/11


The ACO fairy tale is drawing perilously close to an unhappy ending. The government's long-awaited draft regulations on Accountable Care Organizations have brought a dose of ugly reality to a concept that's always seemed coated with a patina of pixie dust. Unless those regs are substantially changed before the clock strikes Jan. 1, 2012 -- the statutory date for ACO implementation -- Cinderella's going to turn back into a scullery maid and the horse-drawn carriage transporting her to the Health System Transformation Ball will be revealed as nothing more than four mice and a pumpkin. Read more...

Why Accountable Care Organizations Won’t Deliver Better Health Care—and Market Innovation Will
Rita Numerof, Ph.D.

The Heritage Foundation, 4/18/11


The Patient Protection and Affordable Care Act (PPACA) creates federal “accountable care organizations” (ACOs). In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will not only fail; they will most likely exacerbate the very problems they set out to fix. ACOs will concentrate more and more power in fewer and fewer organizations, allowing them to become “too large to fail.” Such a system undermines competition and entrepreneurship—the bedrock of innovation and job growth in this country. There is no evidence that supports the use of untested, complex organizational structures to improve quality of care and reduce costs. Creating incentives that focus on achieving higher quality of care, not quantity of medical procedures; providing choices to patients; and allowing real competition among health insurance providers is what will truly transform the health care system. Read more...

The New Health Law: Bad for Doctors, Awful for Patients
Jason Fodeman

Townhall, 4/17/11


While much has been said about the recently passed health care overhaul law and a multitude of cogent arguments have been made as to why the legislation must be repealed, lengthy debates have failed to adequately address how the 2,800 pages will prevent patients from receiving the medical care that they need and want. In fact, in some ways the federal government already hinders the ability of doctors to provide their patients with good care. These trends will no doubt worsen under PPACA. In addition, new regulations and mandates will place unaccountable regulators in between physicians and their patients. Read more...

New Efficiencies in Health Care? Not Likely
Theodore Dalrymple

The Wall Street Journal, 4/16/11


All attempts to reduce bureaucracy increase it, and the same goes for cost. Such, at any rate, has been my experience of the British health care system—its famed, or infamous, National Health Service. Thus, I could not but smile a little wanly when President Barack Obama said this week that he hoped an increase in the use of generic drugs, together with an expert commission to examine the cost-effectiveness of medical treatments, would make a significant impact on the vast budget deficit of the United States. We in Britain have been there and we have done that, and our health-care costs doubled, perhaps not as a result, but certainly at the same time. The best that might be said for these measures is that the increase in health-care costs was lower than it might otherwise have been. That is certainly not enough to save a country from a financial apocalypse, or even enough to be a major contribution to its salvation. Read more...

Transforming Medicare into a Modern Premium Support System: What Americans Should Know
Robert Moffit, PhD, and Kathryn Nix

The Heritage Foundation, 4/15/11


House Budget Committee Chairman Paul Ryan’s (R–WI) budget proposal for fiscal year 2012 would transform the Medicare program into a “premium support” system. Under the Ryan approach, the federal government would make a direct financial contribution to Medicare enrollees’ health care coverage, just as it does today for federal workers and retirees in the popular Federal Employees Health Benefits Program (FEHBP), the nation’s largest and most successful example of a premium support system. Read more...