By Representative Bill Cassidy, Representative Allyson Schwartz, Dr. Kenneth Thorpe, and Robert W. Woodruff
American health care spending continues to rise, and by 2019, health care costs will approach $4.5 trillion -- nearly 20 percent of our projected GDP. With this spending trajectory and our significant debt in mind, serious deficit reform must tackle rising health care costs, particularly in Medicare and Medicaid, and do so by sustainably removing costs from the system.
Traditionally, cost-cutting efforts in health care have involved tweaking eligibility, increasing out-of-pocket costs, and squeezing reimbursement to providers of health care goods and services. Though these actions may achieve a small favorable score from the Congressional Budget Office, they fail to contain costs over the long term. They also often create other problems, primarily because they address symptoms of the problem in our system and shift them to someone else instead of addressing the source of the problems directly.
It's like rearranging the deck chairs on the Titanic to make it harder to reach the lifeboats while doing little to alleviate the need to abandon ship.
Given the lessons of history, there is no reason to believe that shifting costs will yield a different result. To truly bend the cost curve, we must address the drivers -- the growing burden of chronic diseases and the perpetuation of a health care delivery system ill-equipped to prevent and manage chronic disease efficiently and effectively. Indeed, since 1987 over 62 percent of the growth in health care spending is traced to the rising prevalence of treatable disease.
Despite failure to reach bipartisan agreement on many issues that have real consensus, there are still opportunities to make important reforms a reality through the regular committee process as a part of ongoing discussions about payment reform. One of these opportunities presents itself right now as Congress once again debates another temporary fix to Medicare physician fee schedules as a result of the unwieldy Sustainable Growth Rate. We can start by providing evidence-based care coordination in Medicare and for dually eligible Medicare and Medicaid beneficiaries.
Consider the facts: In addition to affecting one in two Americans, chronic diseases account for more than 75 cents of every dollar we spend on healthcare in the U.S. In Medicaid and Medicare, chronic diseases consume more than 90 cents of every dollar spent. Fee-for-service payment models utilized by many federal government programs just perpetuate the cost problem by paying only for medical care in a crisis, and not encouraging the care management and coordination needed to avoid the crisis.
Big cuts do not necessarily translate into big savings, since cost shifting does not actually eliminate costs from the system. Continuing to pursue that logic will hinder our ability to effectively curb the soaring costs of chronic diseases and, by default, overall health care costs. By contrast, implementing targeted solutions that promote prevention, enhance care coordination and management, and support better adherence and self-management, can achieve and sustain meaningful savings, slowing the rate of growth in Medicaid and Medicare without harming the quality of care or the overall health and wellness of those served. We can achieve better care by realigning fee-for-service Medicare and care delivery for those dually eligible for Medicare and Medicaid and by bringing care coordination to those enrolled in the traditional Medicare program. Promoting the move to team-based, patient-centered care in Medicare through accountable care organizations, medical homes, and other models promoting care coordination will move the entire health care system toward one geared to preventing disease and its progression, which, in the long and short run, promotes quality and provides greater value while addressing the key drivers of higher cost.
We also could lower costs significantly by working to improve the health of people entering Medicare. Obese adults entering Medicare spend nearly 20 percent more on healthcare over their lifetime compared to lower weight seniors. The Centers for Medicare and Medicaid Services' (CMS) recent announcement of coverage of preventive services for obesity is strong step in the right direction. Improving the health status of those entering Medicare and reducing the number of those experiencing a lower health status by just 10 percent would save Medicare $65 billion a year, as estimated by researchers at Healthways.
Scaling the community-based version of the diabetes prevention program to provide access to pre-diabetics ages 60-64 would reduce the prevalence of diabetes in Medicare and generate net savings of $4 billion over 10 years, and lifetime savings of $12 billion to $15 billion. Including this benefit in Medicare would increase the savings at $7 billion over 10 years and nearly $27 billion in lifetime savings.
Achieving spending reductions is imperative given the current collision course of rising costs and needs as the baby boomers age into the Medicare system and Medicaid rolls expand. Significant spending reductions, however, do not have to come at the expense of health or the quality of care upon which our most vulnerable populations depend. Instead, the spending crisis presents an opportunity to capitalize on what we know works. It's time to stop shifting the deck chairs and to right the ship for today and the generations to come.