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Can Senate Finance Bill Bend the Cost Curve?

Janice Simmons, for HealthLeaders Media, October 12, 2009

In the past few months, the term "bending the curve" has taken on a new urgency in determining if healthcare reform legislation can be passed that slows—and readjusts downward—healthcare costs.

In late summer a group of 10 national health policy experts convened by the Engelberg Center for Health Care Reform at Brookings, with support from the Robert Wood Johnson Foundation, developed a report on "Bending the Curve." It looked at ways to hold spending while "transitioning to a system of greater accountability" provides greater flexibility for private and public stakeholders.

Using this as a support, they have reviewed the legislation introduced by Senate Finance Committee Chairman Max Baucus (D-MT), which will be voted on by full committee on Tuesday. The experts looked at a side by side summary of key provisions of the report to see if the Baucus proposal does bend the curve.

They found that the Senate Finance proposal does offer provisions found in the report that could offer opportunities for slowing long term spending growth by:

  • Creating an independent entity (a patient centered outcomes research institute) to allocate comparative effectiveness research funding.
  • Increasing payment rates for primary care physicians.
  • Establishing several steps to increasingly link provider reimbursement to quality and efficiency, including by establishing accountable care organizations (ACOs).
  • Expanding and streamlining Centers for Medicare and Medicaid Services (CMS) piloting authority and resources to support the testing, evaluation, and expansion or modification of new payment models in Medicare and Medicaid, such as patient centered medical homes.
  • Moving to a Medicare Advantage competitive bidding system.
  • Establishing an individual insurance requirement, insurance exchanges, rating regulations, and sliding scale subsidies to ensure that insurers compete on price and quality, and help consumers make better health plan decisions.
  • Reducing tax expenditures on high cost health plans by imposing an excise tax on insurers if the value of health coverage exceeds a certain capped amount.

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