Healthcare Financial News

The Congressional Budget Office and the Joint Committee on Taxation have analyzed the draft healthcare reform legislation released last week by the Senate Committee on Health, Education, Labor and Pensions (HELP). They conclude that enacting major provisions of the draft Affordable Health Choices Act would result in net increases of federal budget deficits by $1 trillion over the next decade, while decreasing the number of uninsured by only about 16 million.

In a letter to Sen. Edward Kennedy (D-Mass.), who chairs the HELP Committee, CBO director Douglas Elmendorf also estimates that once the legislation was fully implemented, there would still be up to 37 million uninsured people. “When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges,” states Elmendorf. “At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million.”

The CBO’s cost analysis covers only provisions related to health insurance coverage, not the entire bill.

Read the CBO's analysis.

The Medicare Payment Advisory Committee (MedPAC) has released its June 2009 report to Congress. The report focuses on how incentives in the Medicare payment system should be amended to reward value instead of volume.

The report explores how voluntary and mandatory versions of accountable care organizations (ACOs) could promote care coordination, increase quality, and lower cost growth. Bonuses would be awarded to ACOs that meet quality and cost targets, while poor-performing ACOs would receive lower Medicare payments. The report also discusses traditional Medicare benefit design and whether cost sharing can be used as a tool for increasing the value of care while ensuring beneficiary access to services.

Other issues addressed by the MedPAC report include graduate medical education; the relationship between physicians’ financial interest in imaging equipment and spending on imaging tests; options for reforming the Medicare Advantage program; results of CMS’s chronic care demonstration programs; and CMS’s preliminary estimate of the physician update for 2010.

Read the report.