Slowing the Growth in Health Care Costs

    • October 23, 2013

The Brookings Institution developed the report Person-Centered Health Care Reform: A Framework for Improving Care and Slowing Health Care Cost Growth, which recommends a person-level quality of care as the key strategy for slowing cost growth.

Dates of Project: June to December 2012

Description: Health care costs in the United States have been growing faster than the economy as a whole. While health spending growth is expected to slow somewhat in future years, it is expected to strain both government budgets and the broader economy in coming decades. The group of 18 leading health care experts met once early in the project to outline the main ideas to be included in the report, and continued to work together through conference calls and emails until the report’s completion.

Key Recommendations

The report includes the following recommendations:

  • Instead of paying for each service performed, Medicare should adopt a capitated system that pays for each patient treated, with incentives to ensure quality care. The new model, called Medicare Comprehensive Care, would align Medicare’s financing more closely with the explicit goal of better, higher-value care for each beneficiary, measured at the person level.
  • Instead of negotiating individual waivers from Medicaid rules with states, transition Medicaid to a person-centered approach that will promote state Medicaid reforms.
  • Limit the exclusion of employer-provided health insurance benefits from taxable income by imposing a cap that would grow at the same per-capita rate as federal subsidies in Medicare and/or the insurance marketplaces.

The authors estimate that their proposed reforms would achieve $300 billion or more in net federal savings in the next decade.

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Brookings estimates its recommendations for lowering health care costs would save $300 billion in 10 yrs.