Leaving Medicare Out of Republican Plan Makes Cost Control More Difficult


Reducing costs is crucial to repairing the U.S. health-care system, but that task will be more difficult since President Donald Trump took Medicare changes off the table as Republicans attempt to repeal and replace Obamacare.

Two conservative health-care experts made that assessment at a health insurers’ conference I covered in Washington this past week.

When the Affordable Care Act was enacted by Democrats in 2010, the assumption was that focus would shift over time from the law’s coverage expansion to delivery system reforms through the large Medicare and Medicaid government programs, former Congressional Budget Office Director Douglas Holtz-Eakin said on a panel about the impact of health-care reform on the cost of care.

“That’s not exactly how it’s played out,” Holtz-Eakin said. Once again, “The focus has shifted back to coverage in ways that I fear are not to the advantage of having a real good discussion of the cost of health care,” he said.

Not tackling Medicare costs limits opportunities to reduce health-care costs, Holtz-Eakin said. But many of the policy levers that affect competition and costs are at the state level, such as creating barriers to opening hospitals and nursing homes based on regulatory assessments of need as well as licensing requirements, he said.

If changes to the Medicaid program in the American Health Care Act are enacted, “There will be clear pressures on states to generate lower costs of care given the budget situation they’re going to find themselves in, and they drive state-level policy,” Holtz-Eakin said.

Gail Wilensky, who ran the agency that is responsible for Medicare and Medicaid under President George H.W. Bush, said bundled payments—under which set payments are made to treat episodes of care such as heart failure—appear to be the most successful Medicare payment reform programs, and the Trump administration needs to move ahead with implementing it.

“We have learned enough to make the decisions” and move ahead with reforming Medicare payment and delivery systems, Wilensky said. The traditional fee-for-service payment system, which Medicare has used, has been cited as contributing to health-care cost increases because it provides incentives for payers to increase the volume of treatments to get paid more.

Read my full article here.

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