April 24, 2014

Bipartisan Health Care Plans Point Towards Consensus

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

Several high-profile, bipartisan health care reform plans have demonstrated in recent months that there is a developing consensus among fiscal and health care policy experts on the steps needed to move the country towards a less expensive, more effective and more patient-centered system.

The plans are the Bipartisan Policy Center’s Health Care Cost Initiative, the health care portion of the latest Simpson-Bowles recommendations, a plan from the Engleberg Center for Health Care Reform at Brookings, and a plan from the National Coalition on Health Care.

In the first of three blog posts on the subject, Concord Coalition Policy Director Joshua Gordon points out that all of these groups “took pains to both find scorable savings within the 10-year budget window while also choosing to proffer reforms that would spur a longer-term transformation in the health care system -- making it better while having savings grow beyond the budget window.”

In addition, Gordon writes, these plans “all anticipate that by using the federal government’s market power through Medicare and the tax code, changes would filter through to the private sector, transforming the health care system as a whole.”

It is encouraging that key parts of these proposals have some similarities to proposals in President Obama’s latest budget and, to some degree, the House Republican and Senate Democratic budgets. Gordon’s blog post includes a chart summarizing these similarities.

Looking first at the health care system’s supply side, he says that a key policy shift would be to move “away from fee-for-service medicine – which encourages maximal resource use – towards a value-based system, which rewards effectiveness and efficiency.” This would be done through a series of Medicare provider payment reforms and reductions that would build, in part, on experiments and pilot projects under the Affordable Care Act.

The hope for significant savings from such measures is based on the fact that people with multiple chronic diseases account for so much of the country’s health care spending. Targeting reforms on that spending, Gordon writes, “seems to hold the greatest promise for moving the needle on health care spending over the long term.”

His next two blog posts will look at proposed changes on the demand side of the health care system, including patient sensitivity to costs, and at the effect that reforms could have on government savings and the federal deficit.