Last month, I blogged about the important role the Congressional Budget Office (CBO) will likely play in determining the fate of health care reform.
I am reprising this topic because the CBO just released a 200 plus page report, on options to fund health care reform. But as Robert Pear writes in The New York Times, "many of the health care proposals championed by President-elect Barack Obama and other Democrats would carry a high price tag and would generate only modest savings."
By and large, the CBO projects savings from proposals to cut payments to physicians and other "providers" or impose new mandates on them. Approaches that rely more on carrots than sticks to create positive incentives for change are assumed to increase spending.
For instance, CBO says that paying for a medical home for chronically ill beneficiaries will increase Medicare expenditures by $2.1 billion over five years. It acknowledges that "the medical home concept has the potential to improve the health and health care of chronically ill Medicare beneficiaries" but "cannot estimate whether the net result ... would be to increase or decrease spending."
Giving primary care physicians a 5% Medicare payment bonus for adopting health information technology will increase Medicare spending by $370 million, says CBO. But imposing a 5% pay cut (penalty) on all physicians who do not adopt health information technology (HIT) would save $65 million. Mandating that "providers" use HIT as a condition of participation in Medicare would save over $2 billion.
When it comes to price cuts, CBO has no trouble projecting savings. Reduce fees to physicians in areas with unusually high spending? $4.9 billion saved. Cut Medicare pay rates for primary care physicians who do not meet benchmarks for vaccination? $530 million saved. These are just a few of the dozens of pay cuts CBO says will save money.
The CBO does not make policy, and its new report is just a set of options, not recommendations. Still, my fear is that CBO report may make it easier for Congress to pay for health care reform through payment cuts and mandates on physicians and hospitals because the agency will "score" them as saving money.
At the same time, the Patient-Centered Medical Home and other innovative delivery system reforms may not get the funding needed because CBO "cannot estimate whether the net result would be to increase or decrease spending."
Today's question: How do you think ACP should respond to the CBO report?