Friday, October 9, 2009

"Bending the cost curve of health care"

"Bending the cost curve of health care" the ultimate goal of this reform

While universal coverage is the goal, President Obama and all experts agree that this will only be possible if costs are lowered from the current rate of twice the general inflation rate. Here's what the report has to say on this vital point (pg 10):

Comparative Effectiveness Research

We reviewed literature and consulted experts to determine the potential cost savings that could be derived from comparative effectiveness research (CER), We found that the magnitude of potential savings varies widely depending upon the scope and influence of comparative effectiveness efforts. Small savings could be achieved through the wide availability of non-binding research, while substantial savings could be generated by a comparative effectiveness board with authority over payment and coverage policies.

Such a board with authority over policy, even as a possibility, has been explicitly excluded by President Obama, as this is exactly what he meant by promising that "nothing will come between you and your doctor"

The report continues giving the estimate based on two important measures, one is the important aggregate of all Medical expenses, both individual and all levels of government called "National Health Expenditures or NHE, the other is the savings in Federal Outlay, which is represented by the national deficit:

Our interpretation of the CER provisions in H.R. 3962 is consistent with the least stringent of these levels of influence (AR note, as promised by the President and in the law that was passed) translating into an estimated total reduction in national health expenditures of $8 billion for calendar years 2010 through 2019......

Thus, according to this report, the centerpiece of this Health Reform Effort, "bending the cost curve" for the first decade will amount to $8 billion dollars. While that may sound like a considerable amount, the total of NHE for this period will be approximately $20,000 billion. To put it in everyday terms that's like someone offering a rebate on a purchase, saying that it will be sizable and make a difference in its affordability; and after you paid a thousand dollars, the rebate, the savings, came to 40 cents. This is the same ratio of "bending the cost curve of medical expense" that is reasonable to expect from all of the cost savings in the Health Care Reform bill as represented by the version passed by the House of Representatives.

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