Cutting Healthcare Costs Could Take Decades, Says CBO Director - Make Your Revenue Smarter

Health care costs will continue to grow and most ideas to cut them may not result in savings for the federal government withing a decade, according to Senate Testimony given by Congressional Budget Office (CBO) Director Douglas Elmendorf on Wednesday, February 25. Find his testimony here.   Click title to read more…

Mr. Elmendorf provided a few examples in his testimony, including:

Disease management programs, in which nurses or other coordinators work with patients to better manage and treat their chronic illnesses, “can improve health and may well be cost-effective,” Elmendorf said. But the programs still might not result in overall spending reductions within 10 years because number of the patients who participate is far larger than those who avoid expensive care as a result.

Requiring hospitals to adopt electronic medical records would reduce their own costs for treating Medicare patients. But for the government to capture the savings, it would in turn have to reduce what it pays the hospitals.

Cutting payments to hospitals who readmit patients because of avoidable complications could mean savings for Medicare. But programs like that can be slow to show tangible savings: Readmission information would have to be gathered and hospitals would have to be notified before cuts took place.

While Mr. Elmendorf thinks the savings could be slow to materialize, Congress does have some important tools (or weapons, if you like) available, such as the CMS Recovery Audit Contractors (RACs), who are effectively CMS Bounty Hunters, who are directly paid a substantial percentage for all “overpayments” they find in Medicare claims. Given the tools and methods available RACs, one wonders if the readmission information mentioned by Mr. Elmendorf is really that difficult to gather.

Sources: Wall Street Journal, Health Leaders Media.

 

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