Sunday, August 14, 2011

ACA Bending the Medicare Cost Curve

From Health Beat:

While our elected representatives wrangle over slicing entitlements, virtually no one seems to be paying attention to an eye-popping fact: Medicare reimbursements are no longer accelerating at a break neck-pace. The new numbers should be factored into any discussion about healthcare spending: From 2000 through 2009, Medicare’s outlays climbed by an average of 9.7 percent a year. By contrast, since the beginning of 2010, Medicare spending has been rising by less than 4 percent a year. On this, both Standard Poor’s Index Committee and the Congressional Budget Office (CBO) agree...

What explains the 18-month slow-down? No one is entirely certain. But at the end of July David Blitzer, the chairman of Standard &Poor’s Index Committee, told me: “I’m hesitant to say that this is a clear long-term trend. But it’s more than a blip on the screen."...

Zeke Emanuel, an oncologist and former special adviser for health policy to White House Office of Management and Budget director Peter Orszag, is certain that this is what is happening. When I spoke to him last week, Emanuel, said: “This is not mere chance: this is directly related to the initiation of health care reform.” It is not the result of reform, Emmanuel emphasized. The reform measures that will rein in Medicare inflation have not yet been implemented. But, he explained, providers are “anticipating the Affordable Care Act kicking in.” They can’t wait until the end of 2013: “They have to act today. Everywhere I go,” Emanuel, added, “medical schools and hospitals are asking me, ‘How can we cut our costs by 10 to 15 percent?’
(Emphasis mine)

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