Slower Growth of Health Costs Eases Budget Deficit

A sharp and surprisingly persistent slowdown in the growth of health care costs is helping to narrow the federal deficit, leaving budget experts trying to figure out whether the trend will last and how much the slower growth could help alleviate the country’s long-term fiscal problems.

In figures released last week, the Congressional Budget Office said it had erased hundreds of billions of dollars in projected spending on Medicare and Medicaid. The budget office now projects that spending on those two programs in 2020 will be about $200 billion, or 15 percent, less than it projected three years ago. New data also show overall health care spending growth continuing at the lowest rate in decades for a fourth consecutive year.
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Part of the slowdown stems from “the recession and the loss of income and wealth” causing people to cut back on health care, Douglas W. Elmendorf, the director of the Congressional Budget Office, said last week. But he added that a “significant part” of the slowdown “probably arises from structural changes in the health care system.”

Some insurers have moved away from simply paying per procedure by giving health care providers financial incentives to reduce complications and rehospitalizations, for instance. Doctors, nurses and hospitals have also taken steps to reduce wasteful treatments. Many of the changes predate the 2010 health care overhaul, but the law has also contributed to the changes by offering some financial incentives, health care experts say.

The director of the CBO says probably.... Well gee wiz that settles it!

And that last line, "healthcare expects say"
Who are these experts?

Can you at least tell me what exactly in Obamacare, will help cut healthcare costs, nic?

He certainly has far more credibility than you.

IIRC, there are a number of cost cutting incentives. Do your own research.

That's always your go to line on here.
"We'll he's certainly more knowledgeable than you..."

That's fine and all, but that certainly doesn't speak to his credibility.

Why is it that you unconditionally accept anything and everything that you believe makes this president look good, no matter how irrational or unbelievable something is?

Give me one good reason that I should accept these claims?

If you recall correctly.... I have, and I couldn't find any.
So school me here nic.
You're a big fan of Obamacare, tell me where the cost savings come in to play?
If there are a number of them, giving me one example should be easy.

Health care cost savings measures within PPACA.

1.Create a Center for Medicare and Medicaid Innovation (CMI) to test payment and delivery models while preserving or enhancing quality of care under Medicare, Medicaid and the Children’s Health Insurance Program (CHIP). The initial emphasis will be on populations with poor clinical outcomes and high spending, and on improving coordination, quality and efficiency. The secretary of Health and Human Services (HHS) can expand these demonstration projects nationwide if the Centers for Medicare and Medicaid Services (CMS) actuary determines they can reduce spending.

2.Have Medicare recognize groups of providers and suppliers who meet certain quality criteria as accountable care organizations (ACOs). ACOs can share in cost savings they achieve for Medicare, even receiving bonuses if the savings are large enough. This program will also be available to pediatric medical groups under Medicaid.

3.Test an alternative payment methodology for Medicare nationwide in a voluntary pilot program to incent providers to coordinate patient care across the continuum and to manage all care associated with a hospitalization.

4.Similarly, create demonstration projects under Medicaid to pay bundled payments for episodes of care that include hospitalizations.

5.Establish other programs to encourage providers and plans to provide more efficient care for certain chronically ill and high-risk Medicare and Medicaid populations.

6.Establish an Independent Payment Advisory Board to submit proposals to reduce Medicare spending if projected growth rates in Medicare spending per beneficiary exceed target growth rates specified in the law. The board’s proposals take effect automatically unless Congress passes an alternative that achieves the same level of savings. But proposals cannot ration care, raise taxes or Part B premiums, or change benefits, eligibility or cost-sharing standards; and generally they cannot affect inpatient hospital and hospice care or diagnostic lab tests.

7.Reduce Medicare payments to home health providers. More significantly, Medicare payments to all providers (except physicians, who are governed by different payment rules) will be adjusted by the percentage change in the 10-year moving average of annual private nonfarm business multifactor productivity. The Medicare trustees expect a 1.1% annual reduction. The phased-in adjustment varies by type of provider from 2010 through 2019, and will apply fully and equally thereafter.

8.Reduce Medicare Advantage (MA) plan benchmarks for payment to roughly the cost of fee-for-service Medicare services — more for low-cost counties and less for high-cost counties. High-quality MA plans get a bonus in their benchmark, while rebates to plans bidding less than the benchmark are generally lowered and are further modified for plan quality and certain coding practices. Plans with low medical loss ratios must remit partial payments to Medicare, and plans with consistently low ratios will be barred entirely.

9.Shorten the period for submitting Medicare claims.

10.Physicians ordering durable medical equipment (DME) or home health services must be enrolled in Medicare, and face-to-face encounters with patients are required for such orders.

11.Adjust Medicare hospital payments based on performance under a value-based purchasing program. These incentives will be funded from the base operating diagnostic-related group payments. The law also reduces payments to acute care hospitals whose rates of hospital-acquired conditions are in the top quartile and those with high readmission rates.

12.Disproportionate share hospital payments will be reduced significantly, although hospitals dispensing significant amounts of uncompensated care will receive bonuses.

13.Pay Medicare bonuses to physicians who report quality measures and impose penalties on those who do not.

14.Reduce Medicare payments for magnetic resonance imaging and bone density tests and expand competitive bidding for DME.

15.Create an annual wellness visit benefit for Medicare beneficiaries, and eliminate cost-sharing for certain preventive services recommended by the U.S. Preventive Services Task Force (USPSTF). The law blocks payments for preventive services discouraged by the USPSTF, however, and restricts Medicare reimbursement for certain mental health services.

16.Increase the Medicaid drug rebate (to governments from drug manufacturers) percentage for brand-name drugs.

17.Require the disclosure of financial relationships between health entities, such as physicians, hospitals, pharmacists, and manufacturers of drugs and devices.

18.Support comparative effectiveness research by establishing a nonprofit Patient-Centered Outcomes Research Institute to compare the clinical effectiveness of medical treatments. Findings from this research, however, cannot be used to deny coverage or be construed as a guideline.

19.Award demonstration grants to states to develop alternatives to current medical tort litigation.

20.Simplify health insurance administration by adopting a single set of operating rules for eligibility verification and claims status, electronic fund transfers and health care payments, health claims and similar processes.

21.Increase the threshold for itemized deductions for unreimbursed medical expenses from 7.5% to 10% of adjusted gross income.

22.Limit annual contributions to a flexible spending account for medical expenses to $2,500

23.Structure the new health insurance exchanges established by the states for the individual and small group markets to encourage competition among health plans based on price rather than on risk selection and benefit design. This will presumably occur through standardized plans negotiating lower prices from providers, new approaches to eliminate unnecessary utilization and reductions in administrative costs. The framework here, sometimes called managed competition, assumes participants will choose low-cost plans because their government subsidy (discussed below) is fixed. It also assumes competing insurers will cut costs and therefore lower prices.

24.Impose a 40% excise tax on employer-sponsored health plans to the extent the value exceeds $10,200 for individuals and $27,500 for family coverage, as indexed, effective in 2018. The threshold amounts are somewhat higher for 55- to 64-year-old retirees, and for “high-risk” professions and firms with older workforces. The tax penalty is intended to motivate employers to encourage their employees to choose high-deductible-and-co-pay health plans, such as account-based health plans (ABHPs), perhaps with limited provider choice. These plans, in turn, will encourage participants to make more cost-effective choices of health care goods and services. Alternatively, health maintenance organizations might make a comeback.

how farking silly dude...
I guess you just believe everything NY times prints huh?
And you believe the CBO as long as they're conclusions agree with yours.

I always find it funny that people claim reduced budget deficits, simple because someone changes estimated spending levels 20 yrs out.

Pure nonsense man...

He certainly has far more credibility than you.

As long as medical procedures are tied to financial incentives, there will never be a slowdown in health care costs. So basically if doctors can keep raking in money for doing elective procedures, they will continue to fleece the system. Just like patients who can get free ibuprofen, instead of paying $10 for it like normal people, will do so.

You mean elective procedures that are not covered by health insurance nor medicare/aid?

That's really a separate market.

Nope, talking about procedures that the doctor recommends and are covered under health insurance and/or medicare. Basically they bill insurance for unnecessary procedures. Very common practice.