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HEALTH REFORM: How to Control Rising Health Care Costs

November 11, 2009 - 10:14am

In its Room for Debate section, The New York Times asks a group of health experts what one or two provisions could be added to health reform legislation to help contain health care costs going forward. Below is my contribution to the discussion. For more on the issue, you can read my colleague's post on the real versus the ideal options for slowing the growth of health care costs.

The Medicare payment reforms in both the House and the Senate bills will help to slow the growth of costs by rewarding value over volume, as will the proposed Medicare commission and the tax on insurers who offer high-cost health plans, which are in the Senate Finance Committee bill. And both House and Senate legislation also includes “innovation centers” which will allow us to test different payment models and health care processes.

Even with these steps, the reform bills could be strengthened. Specifically:

  1. The Medicare commission in the Senate Finance Committee legislation should be allowed to recommend changes that will reduce system-wide cost growth, not just in Medicare. The scope of the commission should be broadened to include both the private and public sectors.
  2. Administrative costs are the fastest growing expense for most providers. Administrative simplification provisions should require private insurers to use common claims forms and adjudication approaches or adopt Medicare’s processes.
  3. The current duplicative regulation system costs providers time and money. Evidence-based medicine should be rewarded with a regulation structure that streamlines existing oversight to form three regulatory bodies focused on quality, financial integrity, and workforce.
  4. The current legal environment presents barriers to high-quality coordinated care. A task force chaired by the Health and Human Services Secretary and the Attorney General should lower these barriers by addressing current antitrust, self-referral, profit-sharing and medical malpractice laws.