Achieving Medicare and Medicaid Savings Through Health System Improvement

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<p>As President Obama and Congress consider options for achieving budget savings in the Medicare and Medicaid programs, a <a href="/blog/2011/achieving-medicare-and-medicaid-savings-cutting-eligibility-and-benefits-trimming">new blog post</a> by The Commonwealth Fund’s Karen Davis and Stuart Guterman poses the question: Should those savings come from cutting eligibility and benefits, trimming payments, or ensuring that beneficiaries get the right care? </p>
<p>"When patients receive the right care for their condition, and in the right amount, we can not only reduce the total cost of treatment but also improve access, quality, and outcomes," write Davis and Guterman. They note that one way to encourage more appropriate utilization of services and reduce the need for costly hospitalizations is to give physicians and hospitals incentives to coordinate care better, improve patient outcomes, and limit the amount of resources needed to provide good care. </p>
<p>The authors also note the potentially crucial role to be played by the newly created Independent Payment Advisory Board (IPAB), currently charged with identifying areas of overpayment in Medicare. By broadening the board’s scope of authority, they say, it could also issue recommendations for Medicaid and private insurer payment policies—thus combining the leverage of multiple payers to yield prices that would more closely reflect a competitive market. </p>
<p>In his <a href="/publications/publication/2011/jul/testimony-independent-payment-advisory-board-vehicle-savings">invited testimony</a> today before the House Committee on Energy and Commerce, Subcommittee on Health, Guterman noted that Medicare and other federal health spending is largely driven by factors that apply across the health system. With wider authority, the IPAB could work with private-sector payers on fostering collaboration between public and private initiatives to improve the organization and delivery of health care and slow cost growth, he said. <br /></p>