Commonwealth Fund Report on Health Care Cost Control

The Commonwealth Fund has just come out with a new report outlining a strategy for containing health care costs in the US. It seems rather optimistic to me. Here is the opening two paragraphs and link.

Confronting Costs: Stabilizing U.S. Health Spending While Moving Toward a High Performance Health Care System, Authored by The Commonwealth Fund Commission on a High Performance Health System
January 10, 2013

Michael Chernew (Harvard) is the only economist on the Commission, which is mostly MDs and MBAs.

“Overview

The Commonwealth Fund Commission on a High Performance Health System, to hold increases in national health expenditures to no more than long-term economic growth, recommends a set of synergistic provider payment reforms, consumer incentives, and systemwide reforms to confront costs while improving health system performance. This approach could slow spending by a cumulative $2 trillion by 2023—if begun now with public and private payers acting in concert. Payment reforms would: provide incentives to innovate and participate in accountable care systems; strengthen primary care and patient-centered teams; and spread reforms across Medicare, Medicaid, and private insurers. With better consumer information and incentives to choose wisely and lower provider administrative costs, incentives would be further aligned to improve population health at more affordable cost. Savings could be substantial for families, businesses, and government at all levels and would more than offset the costs of repealing scheduled Medicare cuts in physician fees.” from The Commonwealth Fund Report

The heart of their analysis is in the technical report by Actuarial Research Corp.

Jim Mays, Dan Waldo, Rebecca Socarras, and Monica Brenner “Technical Report: Modeling the Impact of Health Care Payment, Financing, and System Reforms” Actuarial Research Corporation, January 10, 2013

The areas they simulate are revealed in the table of content headings. Nice recent references.

Introduction ……………………………………………………………………………………………………………………………….. 1
I. Improved Provider Payment ………………………………………………………………………………………………….. 4
II. Primary Care: Medical Homes ………………………………………………………………………………………………… 7
III. High-Cost Care Management Teams …………………………………………………………………………………….. 13
IV. Bundled Payments ……………………………………………………………………………………………………………… 16
V. Modified Payment Policy for Medicare Advantage …………………………………………………………………. 22
VI. Medicare Essential Benefits Plan ………………………………………………………………………………………….. 26
VII. Private Insurance: Tightened Medical Loss Ratio Rules ……………………………………………………………. 30
VIII. Reduced Administrative Costs and Regulatory Burden ……………………………………………………………. 32
IX. Combined Estimates …………………………………………………………………………………………………………… 35
X. Setting Spending Targets …………………………………………………………………………………………………….. 37
Appendix A. Creating the “Current Policy” Baseline ……………………………………………………………………….. 40

 

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