Healthcare Reform Will Save Billions for Medicare

Healthcare reform will save Medicare $418 billion over the next 10 years.

The healthcare reform bill is expected to save Medicare $7.8 billion through 2011 and $418 billion over the next decade, according to a report released by the Centers for Medicare and Medicaid Services (CMS).  Kathleen Sebelius, Health and Human Services Secretary, said “Because we began making changes right away, the savings from Medicare add up fast.”

The CMS report focuses largely on the measures that will change how healthcare is delivered and paid, which are at the heart of the historic legislation passed by Congress in spring.  Some of the programs are designed to cut the number of hospital re-admissions, find new ways to reimburse hospitals and physicians, and target fraud and abuse.  The last is expected to save Medicare billions.

Sebelius believes that Medicare will lead the private sector in reforming how healthcare is delivered.  Jonathan Blum, deputy administrator of CMS, said “I think when you look at the history of hospital and provider payments, when large payers like the Medicare program place continued financial pressure, hospitals become more productive.”

According to CMS estimates, changed to the Medicare Advantage programs and the ways in which the agency will reimburse providers will save $145 billion and $205 billion over the next decade respectively.  The report also highlighted several changes that affect care delivery.  As an example, actions to improve quality and simplify care are expected to save more than $15 billion.

Tags: , , , , , , , ,

Leave a Reply