In the past few weeks, two bipartisan groups have made deficit reduction proposals that address national health care spending. The nation faces a trillion dollar-plus budget deficit, and health care spending is a large proportion of ongoing spending.
Several commission members have praised the proposal, but will seek changes before endorsing a final version. The chairmen, Erskine Bowles, former chief-of-staff to then President Clinton, and Alan Simpson, a former GOP senator held a closed-door meeting this past week to discuss modifications before the panel presents its final recommendations on December 1.
Although the drafted proposal addresses a broad array of fiscal problems and objectives, it makes dramatic changes to health care spending. In the medium term, the chairmen propose the following:
Pay doctors and other providers less, improve efficiency, and reward quality by speeding up payment reforms and increasing drug rebates. Specifically:
Pay lawyers less and reduce the cost of defensive medicine by adopting comprehensive tort reform.
Expand cost-sharing in Medicare to promote informed consumer health choices and spending. Specifically:
Expand successful cost containment demonstration.
Strengthen the Independent Payment Advisory Board (IPAB).
Identify an additional $200 billion savings in federal health spending, for instance:
In the long term, the chairmen propose to set a global target federal health spending after 2020 and limit growth to the gross domestic product (GDP) plus one-percent.