Skeptics question health overhaul savings, cost-controls

Jan 12 2010

USA Today reports that independent analysts are increasingly questioning whether the long-term savings promised in the health care bills being considered by Congress are realistic. "From proposed Medicare cuts to a program for seniors that would accumulate money only in its first years, the bill contains provisions that add up to billions in savings and revenue. But analysts such as Joseph Antos of the conservative American Enterprise Institute question whether they can be achieved."

Among the biggest source of proposed savings are Medicare hospital and physician fees, which lawmakers say could provide 42 percent of the planned $438 billion in cuts to the program over 10 years. Some of those cuts, however, "may be unrealistic," a Health and Human Services Department report found (Fritze, 1/12).

In addition to the cuts, the bills would pull "nearly every available cost-control lever" in an effort to slow the growth of medical spending, the Associated Press/ABC News reports. "The four big ideas for slowing costs are: discouraging high-priced health insurance by taxing it; paying hospitals and doctors for quality care and coordination instead of sheer volume of procedures; aggressively seeking savings from Medicare; and restructuring the health insurance marketplace to make it more competitive."

Other core initiatives are "an ongoing push on prevention and an unprecedented research effort to identify effective treatments." Taken together, supporters hope these strategies can slow health care inflation, resulting in savings. According to the AP, even savings of 1 or 2 percent growth could add up over a decade. But, "That's a rosy scenario, skeptics say. Even some supporters of the legislation say cost controls could have been fine-tuned to make them more effective" (Alonso-Zaldivar, 1/11).