In February 2009, President Obama sent his first budget to Congress. The budget outlined the new Administration’s priorities for health reform:
protecting families’ financial health;
ensuring that health coverage is affordable;
aiming for universality in coverage;
providing portability of coverage;
guaranteeing consumer choice;
investing in prevention and wellness;
improving patient safety and the quality of care; and
maintaining long-term fiscal sustainability.
Consistent with the president’s belief that health reform should be financially sustainable, he included a $634 billion reserve fund to advance reform over the next decade, 2010–19. The budget proposal builds on the $150 billion investment included in the American Recovery and Reinvestment Act (ARRA, or economic stimulus package) enacted in February 2009.
In a departure from the past, the Administration has left the details of the health reform legislation to Congress, looking largely to the committees of jurisdiction to develop legislation consistent with its goals. The Administration has set an ambitious timeline—calling for action on legislation during its first year.
This report examines several policy options that could improve the value of the nation’s investment in the health care delivery system and help finance federal support of coverage expansions. To illustrate the importance of the structure and details of the policy options, it presents a range of estimates from three different sources: 1) estimates prepared for The Commonwealth Fund by the Lewin Group and published in a recent report, The Path to a High Performance Health U.S. Health System (the Path report); 2) estimates by the Office of Management and Budget (OMB) for the president’s budget proposal, the economic stimulus bill, and additional savings proposed in June 2009; and 3) estimates by the Congressional Budget Office (CBO). The discussion and comparisons focus on policy options that were examined by the three sources. All estimates consider the potential impact over 10 years, 2010–19.
The estimates of the potential impacts different policies would have indicate that there is potential for significant gains. As shown in this report, the available estimates differ primarily in terms of the scope of the policies and particular elements of the proposals.
As the health care reform debate unfolds, it will be important to keep in mind that there are various options for financing the necessary federal investment and stimulating change throughout the care system. The challenge will be building consensus to move forward and implement policies that have the potential to simultaneously address health care access, quality, and costs.
Comparing the Budget Impact of Select Policy Options
Changes to Medicare Advantage
Achieving Lower Drug Costs in Public Programs
Bundle Payments for Hospitals to Include Post–Acute Care and Productivity Adjustments in Medicare Updates
Changes to Home Health Reimbursement
Modify Updates for Non-Acute Care Facilities
Patient-Centered Medical Homes
Primary Care Payment and Physician Payment Reform
Health Information Technology
Comparative Effectiveness Research
High-Cost Area Update
Reduce Subsidies to Hospitals for Treating Uninsured as Coverage Increases
Manage Physician Imaging
Reduce Waste, Fraud, and Abuse
Select Population Health Options