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A Way to Hit the Brakes on Health Care Spending?

As Congress and the White House head into the next round of budget-deficit talks, a nonpartisan think tank says it has a better idea for controlling federal spending than cutting Medicare: rein in all health care spending, with the government leading the way.

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In a new study, the Commonwealth Fund proposes that health care spending not be allowed to grow faster than the overall economy. The approach would have Medicare, Medicaid, other government programs and private insurers encourage providers to accelerate adoption of more cost-effective care.

In 1960, health care spending was 5 percent of the nation's economy. Now it's 18 percent. And, by current estimates, in 2023 it will reach 21 percent.

The study's idea for controlling costs is similar to approaches used in other industrialized nations, where health care costs are half as much per person as here and health outcomes are better on many measures. See this Wonkblog post.

In additional to a national target for health care spending, the Commonwealth Fund proposes:

  • Speeding up proposals to reward health plans that use coordinated care, such as teams of doctors and nurses who work together to treat patients with diseases like diabetes.
  • Offering health providers a lump sum for each hospital stay - paying, for example a fixed amount for a kidney transplant instead of letting hospitals and doctors bill for dozens and dozens of procedures, tests and other care items.
  • Creating a new "Medicare Essential" plan that would provide "more comprehensive benefits and better protection against catastrophic costs."
  • Giving consumers more information about which health systems and providers do the best job.
  • Making public and private health plans use the same simplified paperwork.

"The overarching goal should be moving the U.S. health system toward a higher level of performance, one marked by access to affordable care for all, improved quality and patient-centeredness, greater accountability for both health outcomes and treatment costs and enhanced population health," the report says.

Republicans in Congress, of course, might not go for more government regulation, as this Reuters story points out. But then again, when it comes to finding trillions in deficit relief, the ideas might play a lot better than massive cuts in programs like Medicare and Social Security.

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