Simpson-Bowles and Daschle-Frist-Domenici: Unveil Plans for Reducing Healthcare Spending

In addition to the President’s FY 2014 we previously reported on, former Fiscal Commission heads, Alan Simpson and Erskine Bowles, unveiled an updated deficit reduction plan – building on a framework released in February 2013 – including $2.5 trillion in savings from spending cuts and revenue increases, of which $585 billion comes from healthcare reductions and reforms over the next 10 years.  Highlights from this plan, courtesy of Thorn Run Partners include: 

Delivery System and Payment Reforms (-$60B/10): Among other recommendations, includes the cost of replacing the SGR with a payment freeze coupled with a short-term “modest” reduction below the freeze and medium-term development of a formula that promotes participation in new care models. Also expands penalties for avoidable complications and readmissions, as well as:  

o   Broadens competitive bidding to medical devices, laboratory tests, radiologic diagnostic services and other commodities;
o   Fosters “alternative benefit packages” (e.g., that combine Parts A, B and D and offer care coordination); and

Ensures IPAB is not restricted by “special interest carve-outs.”  The report also recommends considering giving IPAB the prerogative to recommend benefit design and cost-sharing changes. 
Reform Medicare Cost-Sharing Rules (-$90B/10): Proposes restricting Medigap first-dollar coverage and replacing current Medicare cost-sharing rules with a unified deductible, uniform co-insurance a...

Source: Policy and Medicine - April 29, 2013 Category: Health Medicine and Bioethics Commentators Authors: Thomas Sullivan Source Type: blogs